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Facts
The revenue filed an appeal against the order of the CIT(A) deleting the addition made for under-loading and demurrage charges. The Assessing Officer had treated these payments as penal in nature, but the CIT(A) held they were not penal. The assessee argued that the issue was covered by previous decisions of the Tribunal.
Held
The Tribunal noted that the issue was squarely covered by a coordinate bench's decision in the assessee's own case for earlier assessment years. The Tribunal followed the precedent, holding that the disallowance made by the Assessing Officer under the head 'Demurrage' was incorrect and deleted.
Key Issues
Whether under-loading and demurrage charges paid to railways are penal in nature and liable for disallowance.
Sections Cited
Section 10A, Section 12A, Section 12AA, Section 12AB, Section 80G, Section 194, Section 194A, Section 194C, Section 194H, Section 194I, Section 194J, Section 197, Section 234B, Section 234C, Section 234D, Section 263, Section 271(1)(c), Section 271A, Section 271B, Section 271D, Section 271E, Section 271F, Section 272A, Section 272AA, Section 272B, Section 275, Section 253
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI GEORGE MATHAN & SHRI RATNESH NANDAN SAHAY
Assessee represented by Shri M.K. Choudhary, Adv. & Shri Devesh Poddar, A.R. Department represented by Shri Rajib Jain, CIT-DR Date of hearing 05/01/2026 Date of pronouncement 05 /01/2026 O R D E R PER: BENCH 1. This is an appeal filed by the revenue against the order of the ld. CIT(A), NFAC, Delhi in Appeal No. NFAC/2017-18/10043815 dated 19/02/2024 for the A.Y. 2018-19.
Shri M.K. Choudhary with Shri Devesh Poddar, ld. A.Rs are represented on behalf of the assessee and Shri Rajib Jain, ld. CIT-DR represented on behalf of the revenue.
It was submitted by the ld. CIT-Departmental Representative that the issue in the revenue's appeal was against the action of the ld. CIT(A) in deleting the addition made in respect of the under-loading charges and the demurrage charges paid to the railways which had been disallowed by the Assessing Officer. It was a submission that the Assessing Officer had treated the said ACIT Vs BCCL payments as penal in nature. It was a submission that the ld. CIT(A) had deleted the addition by holding that the payments were not penal in nature.
In reply, the ld. AR submitted that the issue was now squarely covered by the decision of the Coordinate Bench of this Tribunal in assessee's own case for the A.Y. 2016-17 and 2017-18 in & 103/Ran/2023 order dated 07/04/2025, wherein the Coordinate Bench of this Tribunal has in para 16 to 18 held as follows: "16. During the course of hearing, the learned Authorised Representative of the assessee has reiterated the same argument as raised with regard to under-loading charges and submitted that both these issues of under loading charges and demurrage charges were subject matter of disputes in the judgment dated 10/08/2019 of Hon'ble ITAT, Nagpur Bench in for A.Y. 2004-05 in the case of Western Coalfields Limited Vs DCIT, Range-2, Nagpur, has decided all the identical issue of under loading charges and Demurrage charges which was decided in favour of assessee by the Hon'ble ITAT Nagpur Bench vide order dated in and 290/Nag/2006 dated 30/06/2009 for A.Y. 2002-03 and 2003-04.
The ld. CIT-DR for the revenue, on the other hand, has relied on the order of Assessing Officer.
We have considered the facts of the case, rival submissions and the decisions of the Hon'ble ITAT, Nagpur Bench and also the decision of Hon'ble High Courts on this issue. It is found that the Hon'ble ITAT, Nagpur Bench has already decided this issue of demurrage charges in the case of assessee's sister concerned i.e. M/s Western Coalfields Ltd. We find no reason to differ with that because the nature of expenses as the same in both the cases i.e. in the case of this assessee and its sister concern M/s Western Coalfields Ltd., Thus, the ratio applied by the Hon'ble ITAT, Nagpur Bench is also applicable in the case of the assessee. Thus, respectfully following the decision of the Hon’ble ITAT, Nagpur, we also hold that the disallowance made by the Assessing Officer under the ACIT Vs BCCL head "Demurrage” is not correct and same is deleted. The impugned order of ld. CIT(A) is, therefore, upheld qua this issue." It was a submission that the issue having been already held in favour of the assessee, the same is liable to be followed and the appeal filed by the revenue may be dismissed.
We have considered the rival submissions. As it is noticed that the issues in this appeal are squarely covered by the decision of the Coordinate Bench of this Tribunal in the assessee's own case for the A.Y. 2016-17 and 2017-18 and the impugned appeal is for the A.Y. 2018-19 and has no change in the facts have been brought out. Respectfully following the decision of the Coordinate Bench of this Tribunal in the assessee's own case for the A.Y. 2016-17 and 2017-18 referred to supra, the findings of the ld. CIT(A) stands confirmed. Consequently, the appeal filed by the revenue stands dismissed.
In the result, this appeal of the revenue is dismissed. Order announced in open court on 05/01/2026.