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Income Tax Appellate Tribunal, DELHI BENCH “E”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI
Date of Hearing : Date of Hearing : 23 Date of Hearing : Date of Hearing : 23 23-11111111-201 23 201 2015 201 Date of Order : Date of Order : 24-11111111-201 Date of Order : Date of Order : 201 2015 201
ORDER ORDER ORDER ORDER PER PER H.S. SIDHU PER PER H.S. SIDHU H.S. SIDHU : : : : JM H.S. SIDHU The Revenue has filed this appeal against the Order dated 11.2.2013 passed by the Ld. CIT(A)-XVI, New Delhi relevant to assessment year 2004-05 on the following grounds:-
The Ld. CIT(A) has erred in law and on facts in allowing Rs. 50,60,000/- on account of Demurrage & wharfage expenses by not consdiering these expenses of penal nature.
2. The Ld. CIT(A) has erred in law and on facts in not appreciating the provision laid down in explanation to section 37(1) wherein it has been laid that any amount paid fo rht epurpose which is an offence or which is prohibited by law shall not be allowed as expenditure incurred for business purposes. 3. The Ld. CIT(A) has erred in law and facts in ignoring the fact that the Railway Act has defined the demurage and wharfage as the charge levied, charge means the blame of or accusation, hence is of penalty nature. 4. The appellant craves to be allowed to add any fresh grounds of appeal and / or delete or amend any of the ground of appeal.
The brief facts of the case are that assessment was completed u/s. 143(3) of the I.T., Act, 1961 vide order dated 27.11.2006 was passed and assessed at income of Rs. 358,33,62,530/-. Subsequently, order u/s. 250/143(3) was passed on 31.12.2008 and income was determined at Rs. 216,99,51,530/-.
Aggrieved by the assessment order, Assessee appealed before the Ld. CIT(A), who vide impugned order dated 11.2.2013 has allowed the appeal of the Assessee and deleted the addition in disptue.
Against the order dated 11.2.2013 passed by the Ld. First Appellate Authority, Revenue is in appeal before the Tribunal.
Ld. DR relied upon the order passed by the AO and reiterated the contentions raised in the grounds of appeal.
6. On the contrary, Ld. Counsel of the Assessee relied upon the order of the Ld. CIT(A). In support of his contention he has stated that the issue in dipsute is squarely covered in favour of the assessee in assessee’s own case in dated 20.5.2015 (AY 2009-10) passed by the Tribunal. He has filed the copy of the aforesaid decision of the Tribunal dated 20.5.2015.
We have heard both the parties and perused the records, especially the orders passed by the Revenue Authorities and the decision dated 20.5.2015 passed by the Tribunal in assessee’s own case in dated 20.5.2015 (AY 2009-10). The relevant para no. 7 at page 4 of the aforesaid Tribunal’s decision is reproduced as under for the sake of conveinence.
“7. Ground no. 2 is against the deletion of addition of Rs. 2,36,00,000/- being demurrage and wharfage charges. These charges are paid to the railways towards delay in loading and unloading operations beyond the time frame fixed by the Indian railways. The AO was of the view that the amount paid as demurrage and wharfage to the railways is a fine or penalty and hence disallowed the expenditure. The Ld. CIT(A) has delat with the issue at page 44 para 5. That payment in question is not the penalty or fine for violation of any statute. It is compensatory in nature. The issue stands covered by the following decisions. i) Nanhoomal Jyoti Prasad vs. CIT (1980) 123 ITR 269 (All.) ii) Mahalaxmi Sugar Mills Co. Ltd. vs. CIT (1986) 157 ITR 683 (Del.) iii) Imcola Exports Ltd. ITA 974/Mum/2009.
Respectfuly following the same we uphold the finding of the First Appellate Authority and dismiss the ground of revneue.”
7.1 We find that the issue in dispute is squarely covered by the decision of the Tribunal in assessee’s own case in dated 20.5.2015 (AY 2009-10). We further find that Ld. CIT(A) has deleted the addition in dispute by following the decision of the Hon’ble Allahabad High Court in the case of Nanhoomal Jyoti Prasad vs. CIT (1980) 123 ITR 269 (All.), which was also referred in the Tribunal’s decision dated 25.5.2015 in assessee’s own case, as aforesaid. Respectfully following the above precedent in assessee’s own case, we do not find any infirmity in the order of the Ld. CIT(A), hence, we uphold the impugend order on the issue in dispute and dismiss the Apppeal filed by the Revenue.
In the result, the Appeal filed by the Revenue stands dismissed.
Order pronounced in the Open Court on 24/11/2015.