Tribunal held that when a party in breach accepts claim for damages, what actually happens is disposal of a dispute and not any settlement of kind that is envisaged by word ‘settled’ used in S. 43(5). Accordingly damages paid cannot be disallowed as speculative loss. Loss is allowable as business loss. (AY.2009 -10)
CIT v. Ambo Agro Products (P.) Ltd. (2018) 257 Taxman 156 (Cal)( HC) Editorial: Order in CIT v. Ambo Agro Products (P.) Ltd ( 2014) 165 TTJ 620 ( Kol.) (Trib ) is affirmed .
S. 43(5) : Speculative transaction -Damages – Not honouring the commitment to take delivery consequent upon price of palm oil declining- Damages paid cannot be disallowed as speculative loss -Allowable as business loss .[ S.28(i) ]