TMI Blog2011 (3) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... order is confirmed - Appeal of the Revenue is dismissed. - ITA No. 4270/Mum/2009 - - - Dated:- 30-3-2011 - B. Ramakotaiah, J. ORDER B. Ramakotaiah, Accountant Member:- 1. This appeal by the Revenue is against the order of the CIT(A) XIII, Mumbai dated 24-5-2009. 2. Revenue has raised three grounds on the issue of relevance of allowing 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. 3. Assessee is an individual and proprietor of M/s. Darshan Roadlines which specialises in transporting cargo of over -Dimensional Consignments where the front side ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer did not agree with assessee's contentions and disallowed the same. The CIT(A), however, noticed that the expenditure is not in violation of the Motor Vehicle Act and cannot be termed as penalty and relying on the clarifications given by the Central Government vide letter dated 3-8-2008 and after relying on the decision of the ITAT "C" Bench in its order dated 29-1-2001 allowed the expenditure as an allowable deduction under section 37(1). The Revenue is aggrieved. 4. The learned counsel at the outset submitted that this issue is covered in favour of the assessee by the order of the ITAT in the case of M/s. Chadha and Chadha Co. in ITA No. 3524/Mum./2007 and the facts are similar. He further submitted that the Central Government itse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a penalty for violating the law and, therefore, cannot be allowed. 7. The learned counsel in reply submitted that the issue before the Assessing Officer is not that of the trailer capacity but the compounding fees paid and it was submitted that assessee made about 230 trips during the year from the same Check Post and knowing very well that assessee is carrying always over dimensional consignments the RTO was invariably levying fees while allowing the trucks to be transported on road and it is not in violation or contravention of any law but simple compounding fees paid for transporting over dimensional consignments which is assessee's business itself. 8. We have considered the issue. As rightly considered by the CIT(A) fees pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the business expenses. These are not in contravention of law and the RTO authorities neither seized the vehicle nor booked any offence but are generally collecting as a routine amount at the check post itself while allowing the goods to be transported. In view of the nature of collection and payment which are necessary for transporting the goods in the business of the assessee, we are of the opinion that it does not contravene the M V Act as stated by the Assessing Officer and the CIT(A). 10. Similar issue also arose with reference to fine and penalty paid on account of violation of National Stock Exchange Regulations in the case of Master Capital Services Ltd. v. DCIT and the Hon'ble ITAT Chandigarh "A" Bench in ITA No. 346/Chd/2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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