CENTRAL TRADING AGENCY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference at the instance of an assessee under section 66(1) of the Indian Income-tax Act.

(2.) IN the assessment proceedings for the assessment years 1945-46 and 1946-47, the assessee claimed a deduction of the aforesaid sums of Rs. 13,517 and Rs. 3,723 respectively under section 10(2)(xv) of the Act. This claim was disallowed by the INcome-tax Officer, and an appeal filed by the assessee before the Appellate Assistant Commissioner was also unsuccessful. Thereafter, the case was carried to the INcome-tax Appellate Tribunal, but the Tribunal took the view that, as the payment was made as a penalty for breach of contract, it did not fall for the consideration under section 10(2)(xv).

(3.) QUESTION answered in the affirmative.