Alfred Henry Lionel Leach, C.J.

1. The assessee in this case is a firm carrying on business in crackers. The assessee entered into a contract with other traders in the same line of business, under which the firms goods were to be sold at specified rates. In breach of this contract, the assessee sold crackers at lower rates, to the detriment of the other parties to the contract. Consequently, the other parties filed a suit in this Court to recover the damages which they had sustained by reason of the breach of contract on the part of the assessee. The Court found that the assessee was liable in damages and assessed the sum at Rs. 5,000. With costs, the total amount payable by the assessee came to Rs. 6,203. The assessee claimed to be entitled to deduct this as a business expenditure under Section 10(2)(xii) of the Indian Income Tax Act. This contention was rejected by the Income Tax Officer, but the Appellate Assistant Commissioner allowed it. The Income Tax Appellate Tribunal agreed with the Income Tax Officer. The assessee then asked the Tribunal to state a case for this Court, as it involved a question relating to the construction of the Act. This application was granted,