1980 (12) TMI 87

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....the first and second grounds relate to the disallowance of Rs. 2,500 relating to payment of liquidated damages. In so far as this issue is concerned, the facts are that the assessee made a proposal to enter into an agreement with the Executive Engineer, Tubewell Division No. II, Yamunanagar for supply of L&T spares quoted by the assessee's letter dt. 29th Aug., 1973 and by way of earnest money dep....

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....ssessee's request and the assessee in order to incur less loss than it would have incurred, did not supply the balance of the spares with the result that the earnest money of Rs. 2,500 was forfeited. 3. When this claim was made before the ITO, he "found that an amount of Rs. 2,500 has been paid a liquidated damages to certain Government Department". However, in the latter part dealing with this....

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....a difference of opinion between the members constituting the Bench and the matter had to be referred to the Hon'ble President of the Tribunal who appointed the Vice-President of Northern Zone as the third member for deciding the issue. The judgment of the third Member is dt. 26th Nov., 1980. In the judgment, the true ratio of the case of M/s. Cineramas (1977) CTR (P&H) 145 : (1977) 110 ITR 762 (P&....

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....he contracted amount of spares. For the same reasons which we consider are applicable in the case of the assessee as in ITA No. 123 of 1979 referred to supra, we allow the claim of the assessee. 7. The next ground is regarding the disallowance of Rs. 770 holding it as expenditure of the nature of entertainment. The ITO and the CIT (A) disallowed the amount in terms of the ratio of the Hon'ble P....