Rajbala Agrawal, Satna V. Assistant Commissioner of Income Tax,Circle-Satna, Satna

ITSSA 37/JAB/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7804 (ITAT-JABALPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-07-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 12-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: I B KHANDEL
• Keywords: Business expenditure
• Section: 37

Judgement Text

I.T(SS)A NO.37/JAB/2018 1 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI NRS GANESAN, JUDICIAL MEMBER &SANJAY ARORA,ACCOUNTANT MEMBER I.T.(SS)A. NO. 37/JAB/2018 ASSESSMENT YEAR: 2012-13 (THROUGH VIRTUAL HEARING) SMT. RAJBALAAGRAWAL, HARYANA BHAWAN, PANNA NAKA, SATNA (MP) (PAN : ADSPA2704L) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, SATNA (MP) (APPELLANT ) (RESPONDENT) APPELLANT BY SHRI SAPAN USRETHE, ADVOCATE RESPONDENT BY SHRI I.B. KHANDEL, DR DATE OF HEARING 20/07/2020 DATE OF PRONOUNCEMENT 20/07/2020 ORDER PER N.R.S.GANESAN, JM: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF THE INCOME TAX (APPEAL) AND PERTAIN S TO A.Y. 2012-13. THE ONLY GRIEVANCE OF THE ASSESSEE APPEARS TO BE DISALL OWANCE OF RS.22,458/- AND RS.21,965/- SAID TO BE PAID TO RTO AND POLICE RESP ECTIVELY IN THE COURSE OF RUNNING OF TRUCKS. 2. SHRI SAPAN USRETHE, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE PAYMENTS WERE VERY COMMON IN THE COURSE OF RUNNING THE TRUCKS THEREFORE IT IS BUSINESS EXPENDITURE AND HENCE IT HAS TO BE ALLOWED U/S 37 OF THE INCOME TAX ACT. THE LD. COUNSEL PLACED RELIANCE ON THE DECISIO N OF THIS TRIBUNAL IN THE CASE OF CHADHA AND CHADHA COMPANY IN ITA NO. 6140/MUM/20 09 A COPY OF WHICH IS AVAILABLE AT PAGE 6 OF THE PAPER BOOK. THE LD. C OUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE ON ANOTHER DECISION OF THE MUM BAI BENCH OF THE TRIBUNAL IN I.T(SS)A NO.37/JAB/2018 2 SHRI BHARAT C. GANDHI VS. ADDL. CIT IN ITA NO. 3685 /MUM/2011 AND SUBMITTED THAT WHEN THE ASSESSEE PAID AMOUNT TO THE RTO FOR OVERLOADING AS COMPOUNDING FEE IT WAS ALLOWED BY THE TRIBUNAL. ACC ORDING TO LD. COUNSEL IN THIS CASE ALSO THE PAYMENT WAS MADE TO RTO AND POLI CE AND ON QUERY FROM THE BENCH. LD. COUNSEL FOR THE ASSESSEE COULD NOT CLARI FY WHETHER THE PAYMENT WAS FOR OVERLOADING OF THE TRUCKS OR NOT. THE ONLY SUBM ISSION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE PAYMENT WAS MADE IN THE CO URSE OF BUSINESS ACTIVITIES. THE LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE JUD GMENT OF THE MADHYA PRADESH HIGH COURT IN CIT VS. KHEMCHAND MOTILAL JAI N, (2012) 340 ITR 1999 AND SUBMITTED THAT THE MADHYA PRADESH HIGH COURT AL LOWED A SUM OF RS.5,50,000/- AS A BUSINESS EXPENDITURE, WHICH WAS ADMITTEDLY PAID TO KIDNAPER AS RANSOM THEREFORE, ACCORDING TO LD. COUNSEL THE P AYMENT MADE BY THE ASSESSEE TO THE RTO AND POLICE ALSO NEEDS TO BE ALLOWED AS B USINESS EXPENDITURE. 3. WE HAVE HEARD SHRI I.B. KHANDEL, LD. DEPARTMENTA L REPRESENTATIVE. ACCORDING TO THE LD. DEPARTMENTAL REPRESENTATIVE IT IS NOT THE CASE OF THE ASSESSEE THAT THE PAYMENT WAS MADE FOR COMPOUNDING FEE UNDER THE MOTOR VEHICLES ACT FOR OVERLOADING. ADMITTEDLY, IT IS A P AYMENT MADE IN VIOLATION OF THE STATUTORY PROVISIONS THEREFORE, THE DECISIONS R ELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE AND THE JUDGMENT OF M.P. HIGH COUR T ARE NOT APPLICABLE TO THE FACTS OF THIS CASE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITTEDLY, THE PAYMENTS WERE MADE TO THE RTO AND POLICE IN THE COURSE OF RUNNING OF THE TRUC KS. AS RIGHTLY SUBMITTED BY THE LD. DEPARTMENTAL REPRESENTATIVE THIS IS NOT A P AYMENT FOR COMPOUNDING OF OVERLOADING OF THE TRUCKS. WE HAVE ALSO CAREFULLY G ONE THROUGH THE ORDER OF THIS TRIBUNAL. AS RIGHTLY EXPLAINED BY THE LD. COUNSEL F OR THE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE THE PAYMENT WAS MADE TO WARDS COMPOUNDING FEES FOR EXCESS LOADING OF THE TRUCK. IT IS NOT THE CASE BEFORE US THAT THE PAYMENT WAS MADE TOWARDS COMPOUNDING FEE, THEREFORE, THE DECISI ON OF THIS TRIBUNAL IS NOT APPLICABLE TO THE FACTS OF THIS CASE. 5. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMENT OF MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. KHEMCHAND MOTILAL JAIN, (SUPRA). AS RIGHTLY SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, ONE OF THE DIRECTORS OF THE COMPANY WAS KIDNAPPED AND THE POLICE COULD NOT SECU RE THE RELEASE OF THE DIRECTOR, THEREFORE, THE ASSESSEE HAS PAID A SUM OF RS. 5,50,000/- AS RANSOM FOR I.T(SS)A NO.37/JAB/2018 3 GETTING RELEASE OF THE DIRECTOR WHO WAS KIDNAPPED. IN THOSE CIRCUMSTANCES, THE MADHYA PRADESH HIGH COURT FOUND THAT THERE IS NO VI OLATION OF ANY OF THE STATUTORY PROVISIONS IN PAYMENT OF RS.5,50,000/-. T HIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ARTICLE 21 OF THE INDIAN CO NSTITUTION GUARANTEES LIBERTY OF LIFE AND LIBERTY OF MOVEMENT. SECTION 96 OF THE INDIAN PENAL CODE PROVIDES FOR RIGHT OF SELF DEFENCE. SECTION 96 OF THE INDIAN PENAL CODE VERY CLEARLY SAYS THAT NOTHING IS AN OFFENCE WHICH WAS DONE BY AN IND IVIDUAL IN THE COURSE OF EXERCISING THE RIGHT OF PRIVATE DEFENCE. WHEN THE D IRECTOR OF THE COMPANY WAS KIDNAPPED AND THE STATE POLICE AUTHORITIES WERE UNS UCCESSFUL IN GETTING RELEASE OF THE DIRECTOR. THE ASSESSEE COMPANY BEFORE THE HI GH COURT HAD TWO OPTIONS; ONE IS TO USE MUSCLE POWER OVER THE KIDNAPPER AND A NOTHER IS TO PAY MONEY AS RANSOM TO THE KIDNAPPER. IN THAT CASE, THE ASSESSEE COMPANY PREFERRED TO PAY MONEY TOWARDS RANSOM TO THE EXTENT OF RS.5,50,000/- . THE PAYMENT OF RS.5,50,000/- TO THE KIDNAPPER IS NOT AN OFFENCE AS EXPRESSLY PROVIDED IN SECTION 96 OF THE INDIAN PENAL CODE. 6. IN THE CASE BEFORE US, THE PAYMENT WAS MADE TO R TO AND POLICE. IT IS NOT THE CASE OF THE ASSESSEE THAT THE AMOUNT PAID TO RT O AND POLICE ARE COMPOUNDING FEE OR ANY STATUTORY FEE. THIS KIND OF PAYMENT IS PROHIBITED UNDER THE PROVISIONS OF PREVENTION OF CORRUPTION ACT. THE REFORE, AS OBSERVED EARLIER THIS PAYMENT CANNOT BE ALLOWED AS BUSINESS EXPENDIT URE WHILE COMPUTING TAXABLE INCOME OF THE ASSESSEE. HENCE, WE DO NOT SE E ANY MERIT IN THE APPEAL OF THE ASSESSEE. ACCORDINGLY, THE SAME IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON JULY 20 TH , 2020.) SD/- SD/- (SANJAY ARORA) (N.R.S.GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:20/07/2020 AKS/- I.T(SS)A NO.37/JAB/2018 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT : SMT. RAJBALAAGRAWAL, HARYANA BHAWAN ,PANNA NAKA, SATNA (MP) 2. THE RESPONDENT : ASSISTANT COMMISSIONER OF INCOME T AX, CIRCLE, SATNA (MP) 3. THE CONCERNED PR.C.I.T 4. THE CIT (A) 1, JABALPUR 5. SR. DR, ITAT 6. GUARD FILE