COMMISSIONER OF INCOME TAX Vs. JAYDWAR TEXTILES

JUDGEMENT

(1.) BY this reference under section 256(1) of the Income -tax Act, 1961, made at the instance of the Revenue, the following question has been referred to us for opinion by the Income -tax Appellate Tribunal :

(2.) FROM the statement of the case, it is clear that the amount paid in this case by the assessee was on account of the compensation for breach of contract, and that being so, we find that it would not amount to a speculative transaction within the meaning of section 43(5) of the Income -tax Act, 1961.

(3.) IN view of the above judgment of the Supreme Court, we answer the question referred to us in the affirmative that is in favour of the assessee and against the Revenue.