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2016 (1) TMI 1033 - BOMBAY HIGH COURTProvision for increment - Held that:- As the provision was made for known liability and therefore the approach by ITAT cannot be said to be unjust. Overloading charges - Held that:- The overloading charges or under loading charges are payable in terms of contract between the parties and it is not an offence. It is purely a commercial transaction. In this situation, we do not find any substantial question of law arising as the ITAT has allowed payment of overloading charges as expenditure which can be deducted under Section 37 of the Income Tax Act, 1961. Compensation expenditure - revenue v/s capital - Held that:- Since the acquisition of land results into displacement of land owners, as per the policy of resettlement and rehabilitation for land outstees, they are to be given employment in the assessee company and till such employment is given the assessee company is liable to pay subsistence allowance at the rate of ₹ 2,500/per month per person. It has no corelation with area or extent of land acquired. The company, as a prudent measure, has evolved the policy to pay a lump sum consideration to such land oustees in lieu of employment. If the company is not in a position to provide employment, then only the subsistence allowance at the rate of ₹ 2,500/was/ is being paid. Thus, this subsistence allowance is a liability which arises only after the land is acquired if employment cannot be offered. Therefore, the ITAT has rightly accepted it as the Revenue expenditure.
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