DCIT, New Delhi V. M/s National Fertilizers Ltd., New Delhi

ITA 3121/DEL/2013

• Counselvise Citation: 312120114 RSA 2013
• Duration Of Justice: 2 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 23-11-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 17-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Section: 143(3); 37(1)

Judgement Text

ITA NO. 3121/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO. 3121 /DEL/2013 A.Y. 200 4 - 0 5 DCIT, CIRCLE 13(1), ROOM NO. 406, CR BUILDING, I.P. ESTATE, NEW DELHI VS. M/S NATIONAL FERTILIZERS LIMITED, CORE-III, SCOPE COMPLEX, INDUSTRIAL AREA, LODHI ROAD, NEW DELHI 110 003 (PAN: AAACNO189N) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. P. DAM KANUNJNA, SR. DR ASSESSEE BY : SH. VED JAIN, ADV. DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 23 2323 23- -- -11 1111 11- -- -201 201 201 2015 55 5 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 2 22 24 44 4- -- -11 1111 11- -- -201 201 201 2015 55 5 ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU : : : : J JJ JM MM M THE REVENUE HAS FILED THIS APPEAL AGAINST THE ORDE R DATED 11.2.2013 PASSED BY THE LD. CIT(A)-XVI, NEW DELHI RELEVANT TO ASSESSMENT YEAR 2004-05 ON THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALL OWING RS. 50,60,000/- ON ACCOUNT OF DEMURRAGE & WHARFAGE EXPE NSES 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 ITA NO. 3121/DEL/2013 2 IS PROHIBITED BY LAW SHALL NOT BE ALLOWED AS EXPEN DITURE INCURRED FOR BUSINESS PURPOSES. 3. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN IGNORI NG THE FACT THAT THE RAILWAY ACT HAS DEFINED THE DEMURAGE AND WHARFAGE AS THE CHARGE LEVIED, CHARGE MEANS THE BLAME OF OR ACCUSATION, H ENCE 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 O F APPEAL. 2. 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, ORDE R U/S. 250/143(3) WAS PASSED ON 31.12.2008 AND INCOME WAS DETERMINED AT R S. 216,99,51,530/-. 3. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE APPE ALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 11.2.2013 HA S ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION IN DISPTUE. 4. AGAINST THE ORDER DATED 11.2.2013 PASSED BY THE LD. FIRST APPELLATE AUTHORITY, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL . 5. LD. DR RELIED UPON THE ORDER PASSED BY THE AO AN D REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 6. ON THE CONTRARY, LD. COUNSEL OF THE ASSESSEE REL IED UPON THE ORDER OF THE LD. CIT(A). IN SUPPORT OF HIS CONTENTION HE HAS STA TED THAT THE ISSUE IN DIPSUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE IN ASSES SEES OWN CASE IN ITA NO. 4076/DEL/2013 DATED 20.5.2015 (AY 2009-10) PASSED B Y THE TRIBUNAL. HE HAS FILED THE COPY OF THE AFORESAID DECISION OF TH E TRIBUNAL DATED 20.5.2015. ITA NO. 3121/DEL/2013 3 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND THE DE CISION DATED 20.5.2015 PASSED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN IT A NO. 4076/DEL/2013 DATED 20.5.2015 (AY 2009-10). THE RELEVANT PARA NO. 7 AT PAGE 4 OF THE AFORESAID TRIBUNALS DECISION IS REPRODUCED AS UNDER FOR THE SAKE OF CONVEINENCE. 7. GROUND NO. 2 IS AGAINST THE DELETION OF ADDITI ON OF RS. 2,36,00,000/- BEING DEMURRAGE AND WHARFAGE CHARGES. THESE CHARGES ARE PAID TO THE RAILWAYS TOWARDS DELA Y IN LOADING AND UNLOADING OPERATIONS BEYOND THE TIME FR AME FIXED BY THE INDIAN RAILWAYS. THE AO WAS OF THE VI EW THAT THE AMOUNT PAID AS DEMURRAGE AND WHARFAGE TO THE RAILW AYS IS A FINE OR PENALTY AND HENCE DISALLOWED THE EXPENDIT URE. 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 ISS UE 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 I TR 683 (DEL.) III) IMCOLA EXPORTS LTD. ITA 974/MUM/2009. RESPECTFULY FOLLOWING THE SAME WE UPHOLD THE FINDI NG 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 ASSESSEES OWN CASE IN ITA NO. 4076 /DEL/2013 DATED 20.5.2015 (AY 2009-10). WE FURTHER FIND THAT LD. C IT(A) HAS DELETED THE ITA NO. 3121/DEL/2013 4 ADDITION IN DISPUTE BY FOLLOWING THE DECISION OF TH E HONBLE ALLAHABAD HIGH COURT IN THE CASE OF NANHOOMAL JYOTI PRASAD VS. CI T (1980) 123 ITR 269 (ALL.), WHICH WAS ALSO REFERRED IN THE TRIBUNALS DECISION DATED 25.5.2015 IN ASSESSEES OWN CASE, AS AFORESAID. RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT IN ASSESSEES OWN CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE L D. CIT(A), HENCE, WE UPHOLD THE IMPUGEND ORDER ON THE ISSUE IN DISPUTE AND DISMISS THE APPPEAL FILED BY THE REVENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/11/2015. S SS SD DD D/ // /- -- - S SS SD DD D/ // /- -- - [ [[ [PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI] ]] ] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE: DATE: DATE: DATE: 2 22 24 44 4- -- -11 1111 11- -- -2015 2015 2015 2015 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR