1974 (7) TMI 37

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....k Buchau R. Wolf A.G. The plant was delivered under the contract. The case of the assessee was that the machinery was not only delivered late but was also defective. The assessee instituted a suit against the German firms in the year 1935 for damages claiming a sum of Rs. 2,05,000 which consisted of the following items : --------------------------------------------------------------------------------------------------------------------------------------------------- Narration of the claim Quantum of Quantum of claim made claim allowed Rs. P. Rs. P. -------------------------------------------------------------------------------------------------------------------------------------------------- 1. Cost of replacing, altering....

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....esented revenue receipt. The assessee appealed. The Appellate Assistant Commissioner reversed the finding of the Income-tax Officer. He held that the compensation of Rs. 1,11,466 being compensation for delay in the erection of the plant and for defects in the plant was capital receipt. Aggrieved, the department went up in appeal to the Tribunal. Some items had, however, been held by the Commissioner to be revenue receipt. In regard to them the assessee went up in appeal to the Tribunal. The appeal filed by the assessee came up for hearing on 27th November, 1968. The Tribunal mentioned the dispute with regard to the compensation of Rs. 1,11,466 but observed that it was pertinent to note that the department had come in appeal against the afor....

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....tion for rectification under section 254(2) of the Income-tax Act, 1961. This application was disposed of by the Tribunal by its order dated 14th July, 1970, whereby the following paragraph was added to the original order of the Tribunal dated 7th April, 1969 : " In the view we have taken in the assessee's appeal, namely, that the amount fell due in the year 1952, it is not necessary for us to consider in this appeal whether or not the amount as received was on revenue account." It is thus evident that the department's appeal in so far as it related to the amount of Rs. 1,14,212 which represented the compensation paid for delayed and defective machinery was not decided on the merits of the question whether it was capital or revenue in....