TMI Blog2014 (6) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... ds excess depreciation claimed by the assessee company in respect of Tippers & Dumpers - Held that:- This issue has been decided by the appellate authorities in assessee’s own case in the earlier years in favour of the assessee wherein , came to the conclusion that in view of Circular No.652 dated 14th June, 1993 of C.B.D.T., the assessee was entitled to the benefit because of the fact that the assessee was using the vehicles in both the capacities, that is to say, business for transportation of goods on hire as well as transportation of goods. It was also pointed out that in the past for the assessment years 2005-2006 and 2004-2005, the learned C.I.T.(A) held that the assessee had the business of transportation of goods on hire as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Apropos Ground No.1 : Demurrage charges and penalty charges : 3.1. On this issue the AO noted that during the year the assessee claimed a sum of ₹ 3,24,148 and ₹ 74,90,837 as demurrage charges and penalty charges (imposed by Central Coalfields Limited), which has been included in Handling Stevedoring expenses. AO observed that since the demurrage charges and penalty imposed is not an allowable expenditure, being penal in nature, the said amounts of ₹ 3,24,148 and ₹ 74,90,837 was disallowed and added back to the total income of the assessee company. 4. Before the ld. CIT(A) it was submitted that the assessee company during the year derived income from execution of jobs of handling contractors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see s own case on identical issue there is no reason to differ from the same. Moreover, the case law of the Hon ble Calcutta High Court in the case of CIT vs Jiyajeerao Cotton Mills Ltd. (supra) also supports the assessee s case. In this case the Hon ble Jurisdictional High Court has expounded as under :-. The goods were not delivered in time and thereby a penalty under the default clause had to be paid. It is not a penalty for breach of any law. The payment was made on account of the contractual obligation under the agreement. When the goods were not delivered within the stipulated period, an extra amount, designated penalty had to be paid. This was done in course of carrying on the business by the assessee. Usually, time is not o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue the AO noted that the asessee has claimed deprecation of 30% on the block of assets namely tippers and dumpers etc. @30% instead of 15%. The assessee claimed that it is using the vehicles for its own business of transportation of goods on hire and accordingly higher rate of depreciation should be allowed. However, the AO was not in agreement with this. The AO observed that assessee s nature of business is primarily stevedoring (which means loading and unloading of goods), clearing and forwarding. The AO opined that the assessee s business of loading and unloading of goods, clearing and forwarding cannot be said to be a business of transportation of goods on hire. The AO further noted that in terms of provision of Circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier years in favour of the assessee. The Hon ble Jurisdictional High Court has also considered the issue and has decided in favour of the assessee holding as under :- The learned Tribunal below, on consideration of the materials on record, came to the conclusion that in view of Circular No.652 dated 14th June, 1993 of C.B.D.T., the assessee was entitled to the benefit because of the fact that the assessee was using the vehicles in both the capacities, that is to say, business for transportation of goods on hire as well as transportation of goods. It was also pointed out that in the past for the assessment years 2005-2006 and 2004-2005, the learned C.I.T.(A) held that the assessee had the business of transportation of goods on hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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