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2015 (8) TMI 318 - ITAT DELHI

2015 (8) TMI 318 - ITAT DELHI - TMI - Addition being accrued interest on advances given to M/s Karsan - CIT(A) deleted the addition - Held that:- The issue is squarely covered in favour of the assessee by an order passed by the ITAT on the very same issue for the AY 2004-05 and 2005-06 also affirmed by Honíble Jurisdictional High Court [2012 (9) TMI 922 - DELHI HIGH COURT] wherein held as having regard to the terms of the repeated Arbitration Act, 1940, an award could not be enforceable. The sam .....

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) deleted the addition - Held that:- These charges are paid to the railways towards delay in loading and unloading operations beyond the time frame fixed by the Indian railways.The payment in question is not the penalty or fine for violation of any statute. It is compensatory in nature. See Nanhoomal Jyoti Prasad vs. CIT (1979 (8) TMI 38 - ALLAHABAD High Court) - Decided against revenue.

Disallowance being provision for post retirement benefits - CIT(A) deleted the addition - Held tha .....

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- CIT(A) deleted the addition - Held that:- The issue is covered by the decision of the Honíble Delhi High Court in the case of CIT vs. BHEL (2012 (9) TMI 515 - DELHI HIGH COURT ) wherein it was held that provision for wage revision was based on past experience, previous Pay Commissionís reports and other relevant factors and the deduction claimed for period, between the expiry of one wage settlement or agreement, cannot be termed as contingent because the wage and the probable revision or rates .....

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A)-XVI, New Delhi dated 29.4.2013 pertaining to the Assessment Year (A.Y.) 2009-10. 2. Facts in brief:- The assessee is a company engaged in the business of manufacturing and trading of Nitrogenous Fertilisers and other related industrial products. It filed its return of income on 29.9.2009 declaring income of ₹ 253,15,13,265/-. It was revised on 30.3.2011 declaring the very same income. The AO passed an order u/s 143(3) of the Act on 14.11.2011 determining the total income at ₹ 350, .....

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the matter in appeal. The First Appellate Authority has granted part relief. The Revenue has filed appeal before us on the following grounds. 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition made by the assessing officer amounting to ₹ 6,48,20,000/- crores on account of interest accrued on advances given to M/s Karsan ; 2. The Ld. CIT(A) has erred in law and on facts in allowing ₹ 2,36,00,000/- on account of Demurrage & Wharfage expenses by not considering .....

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ame or accusation, hence is of penalty nature; 3. The Ld. CIT (A) has erred in law and facts in deleting the addition of ₹ 7,79,00,000/- on account of disallowance of provision for post retirement benefits ignoring the fact that these are unascertained liabilities and cannot be allowed as per provisions of AS -15; 4. The Ld. CIT (A) has erred in law and facts in deleting the addition of ₹ 74;01,67,000/- on account of disallowance of provision for wage arrears ignoring the fact that a .....

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case, on perusal of material on record, orders of the authorities below, case laws cited, we hold as follows. 6. The first ground that arises for our consideration is the deletion of an addition being accrued interest on advances given to M/s Karsan. This issue has been discussed at page 2 para 3 of the assessment order. The Ld.CIT(A) has dealt with the same at page 41 para 4.1 onwards. Both the parties submitted that the issue is squarely covered in favour of the assessee by an order passed by .....

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Exports Ltd. (AIR 2001 SC 2293). This Court also noticed that having regard to the terms of the repeated Arbitration Act, 1940, an award could not be enforceable. The same was the case with the foreign award, the Court had to first adjudicate as to the enforceability. In these circumstances, the assessee s right to interest was a mere claim, till the date of the judgement of the Court dt. 4th Dec.2006. In other words, the right to interest crystallised after the judgement of the Court. Till the .....

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as of the view that the amount paid as demurrage and wharfage to the railways is a fine or penalty and hence disallowed the expenditure. The Ld.CIT(A) has dealt with the issue at page 44 para 5. The payment in question is not the penalty or fine for violation of any statute. It is compensatory in nature. The issue stands covered by the following decisions. i. Nanhoomal Jyoti Prasad vs. CIT (1980) 123 ITR 269 (All.) ii. Mahalaxmi Sugar Mill Co.Ltd. vs. CIT (1986) 157 ITR 683 (Del.) Imcola (Export .....

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mined one, though to be discharged in future, did not make it a contingent liability and it is an allowable liability. The First Appellate Authority in this case has followed the judgement of Hon ble Supreme Court. Thus we find no reason to interfere with the same. Ground no.3 is dismissed. 9. Ground no.4 is against the deletion of disallowance of ₹ 74,01,67,000 being a provision made for wage arrears. The First Appellate Authority has dealt with this issue at paras 8.1 to 8.10. The provis .....

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