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2011 (3) TMI 278 - AT - Income TaxDisallowed - Settlement fees paid by the assessee under the Motor Vehicle Act - Disallowed by the Assessing Officer on the pretext that it was a penalty not allowable under section 37(1) but allowed by the CIT(A) as an expenditure - Held that: the assessee has made about 230 trips by paying compounding fees, as per the rules in the Motor Vehicle Act, it cannot be stated that assessee's payments of compounding fees is in violation of law - Since assessee is engaged in transporting of over dimensional capacities in its transport business, it is necessary business expense wholly for the purpose of business - Therefore, the same is allowable u/s 37(1) - Thus, the CIT(A)'s order is confirmed - Appeal of the Revenue is dismissed.
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