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2017 (4) TMI 1282 - AT - Income TaxDisallowance as the overloading charges - whether it is nothing but a penalty as per Provision of section 73 of the Indian Railway Act, 1989 - Held that:- This issue raised by the revenue in this appeal is squarely covered in favour of the assessee by the decision of ITAT Mumbai bench in the case of Taurian Iron & Steel Co.(P)Ltd (2011 (12) TMI 410 - ITAT, Mumbai) after considering the decision in the case of Prakash Cotton Mills P.Ltd. (1993 (4) TMI 3 - SUPREME Court) and also the nature of railway punitive charges held that the payments made to the railways for overloading of the wagons is compensatory in nature and cannot be disallowed under Explanation to Section 37(1) of the Act. Addition u/s 14A - Held that:- As rightly held by CIT(A) disallowance under Rule 8D(2)(ii) (indirect interest expenditure) cannot be sustained in the light of the uncontroverted finding of the CIT(A) that assessee had sufficient interest free funds which were more than the value of investments which are likely to yield tax free income. As far as disallowance under Rule 8D(2)(iii) is concerned it is only the investment which yield dividend income that should be considered for the purpose of applying the formula as held by this tribunal in the case of REI Agro Ltd. (2013 (9) TMI 156 - ITAT KOLKATA) which has since been affirmed by the Jurisdictional Calcutta High Court. In view of the above we find no merits in the ground raised by the revenue. Treatment to the NPV expenditure - revenue OR capital in nature - Held that:- As decided in assessee's own case the above expenditure paid by the assessee as NPV to enable the assessee to carry on its mining business is revenue in nature, which is allowable as business expenditure under section 37(1) of the Act. - Revenue appeal dismissed.
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