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2018 (1) TMI 850 - 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:- In the light of the uncontroverted factual details with regard to availability of own funds the disallowance of interest expenses in terms of Rule 8D(2)(ii) of the Rules was rightly deleted by CIT(A). As far as disallowance under Rule 8D(2)(III) of the Rules is concerned the CIT(A) has followed the decision of the Tribunal in the case of REI Agro Ltd (2013 (9) TMI 156 - ITAT KOLKATA)and has directed the AO to exclude investments which did not yield tax free income while working out the average value of investment. We find no grounds to interfere with the order of CIT(A). No merits in the ground raised by the revenue.
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