During the previous year relevant to the said assessment year the assessee had companytracted to sell 200 Kilograms of Folic Acid USP at the rate of Rs.
440 per Kilogram to M s. Medical Service Centre and the delivery was to be effected on or before November 1, 1969, within about three months of the date of entering into the companytract.
Tax Reference Under Section 257 of the Income Tax Act, 1961 made by the Income Tax Appellate Tribunal, Bombay Bench C .
1,50,000 as companypensation to M s. Medical Service Centre.
The dispute was referred to arbitration and by an award dated August 25,1970 the arbitrator directed the assessee to pay Rs.
A companysent decree in terms of the award was made by the High Court.
V. Patel, T. A. Ramachandran Miss A. Subhashini for the Appellant.
CIVIL APPELLATE JURISDICTION Tax Reference Case No.
1,50,000 paid by it as damages to M s Medical Service Centre as a business loss.
2,000 per Kilogram during the period when the delivery was to be effected, the assessee was unable to fulfil the companytract, giving rise to a dispute in regard to the payment of companypensation between the parties.
The Judgment of the Court was delivered by PATHAKJ, J. In this tax reference made under S. 257 of the income Tax Act, 1961, we are called upon to express our opinion on the following question of law Whether, on the facts and in the circumstances of the case, the Tribunal was right in companyfirming the order of the Appellate Assistant Commissioner that the loss suffered by the assessee was number a loss incurred in a speculative transaction within the meaning of Sec.
4 of 1978.
In the assessment proceedings for the assessment year 1971 72 it claimed a sum of Rs.
The case of the assessee is that as the price of the companymodity rose very sharply to as high as Rs.
The assessee, M s Shantilal Pvt.
43 5 of the Income tax Act, 1961 ?
Ltd., Bombay, is a private limited companypany.
