Compensation paid for Contractual Non-Fulfilment allowable

Sugam Park Vs DCIT (ITAT Kolkata)

Introduction: In a recent landmark judgment by ITAT Kolkata, the tribunal addressed the nature of compensation charges as they relate to the non-fulfilment of contractual obligations. The main point of contention was whether such compensations can be considered penal in nature, especially if they don’t involve a violation of any law.

Analysis: The case revolves around the assessee, Sugam Park, who entered an agreemen

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