SARDAR PRIT INDER SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) A consolidated statement of the case has been submitted by the Income-tax Appellate Tribunal, Patna Bench, Patna (hereinafter referred to as "the Tribunal"), under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), referring the following common question of law for the assessment years 1968-69, 1969-70 and 1970-71 :

(2.) FROM the facts as found from the statement of the case as well as the order of the Tribunal, it is evident that the assessee, as individual, is working as a contractor for supplying vegetables, fruits, dressed meat and meat on hoof, etc., to the army authorities in Assam.

(3.) MR. Shambhu Sharan for the Revenue has relied on the order of the Tribunal and has submitted that where there is an agreement existing between the parties, both the parties are supposed to conform to the conditions contained in the agreement and that in case one of the parties commits breach of the terms of the contract on the basis of which the other party recovers the damage, such damage could not been allowed as deduction. However, he has not been able to cite any authority to support his contention. I also find that the Tribunal has wrongly placed the onus on the assessee to prove that the delay effected in supplying the materials was for no fault of the assessee or to prove that the assessee supplied materials of standard quality which was erroneously held to be of sub-standard quality by the military authorities. Under the circumstances, the only fact which remains on record is that the military authorities made deductions from the bills of the assessee on account of delay in the supply of the materials or on account of supplying sub-standard quality of materials.