Section 37 of Income Tax Act, 1961— The only issue alleged by assessee is in respect of disallowance of liquidated damages claimed by assessee amounting to Rs. 1,08,11,537/-.

Held that— In our considered opinion, “liquidated damages” are compensation paid for breach of contract. We are therefore, unable to understand how the sum paid by assessee on behalf of M/s Century Golflinks being its proportionate share towards incurring of expenses would amount to liquidated damages. Assessee has also not brought on record to show that amount payable by M/s Century Golflinks is by way of compensation. Further, all decisions relied upon by Ld.AR in paper book filed before us emphasises circumstances and tests that has been laid down by various courts to consider any amount received, to be in the nature of compensation, and therefore an allowable deduction.[M/S G.V. PROPERTIES PVT. LTD. VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX CICLE-11 (3) , BANGALORE][2019] 19 ITCD Online (15) [ITAT BANGALORE]