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TMI Blog2018 (12) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... t of punitive charges paid to railway as over-loading charges. 2. That on the fact & in circumstances of the case & in law, the Ld.CIT(A) is erred in restricting the addition from Rs. 2,55,000/- to Rs. 1,27,500/- made by AO on account of water supply expenses. 3. That on facts & circumstance of the case & in law, the Ld. CIT (A) is erred in deleting the addition of Rs. 16,07,900/- made by AO on account of hiring charges and rack loading charges paid to parties covered u/s 40A(2)(b) of the Income Tax Act, 1961. 4. That the order of the Ld. CIT (A) is erroneous and is not tenable on facts and in law. 5. The grounds of appeal are without prejudice to each other. 6. That the appellant craves leave to add, alter amend or forego any gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and are also not incidental to business activities being carried on by assessee. He accordingly disallowed claim amounting to Rs. 1,38,54,151/-. 3.2. Ld.AO made addition in respect of water expenses incurred amounting to Rs. 2,55,000/-, and amount paid to certain parties on account of hiring charges and rack loading charges to be covered under section 40A(2)(b) amounting to Rs. 16,07,900/-. 4. Aggrieved by order of Ld.AO, assessee preferred appeal before Ld.CIT (A) who deleted entire addition. 5. Aggrieved by order of Ld.CIT (A) revenue is in appeal before us now. 6. We find that Rakesh Kumar Singh & Co. Chartered Accountant has entered their appearance on the previous date being 04th September,2018 and has filed their power of attorne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vied by Railway on account of wagon loading charges will be borne by assessee. Further assessee had also placed reliance upon following decisions: 1. Hon'ble Supreme Court in case of CIT vs. Ahmedabad Cotton Manufacturing Co.Ltd. (1993) 71 Taxman 56. 2. Western Coal Fields Ltd. vs. ACIT, 2009 (124 TTJ 659) ITAT Bench. 3. Tuarian Iron & Steel Co. Pvt. Ltd. vs. ACIT in ITA no.847/Mum/2010, ITAT, Mumbai. 11.1. It is observed that Ld.CIT(A) allowed claim of assessee by observing ratios laid down in afore stated decisions, wherein it has been held that punitive charges by Railways cannot be considered to be penal in nature, and it is actually in nature of compensation paid by assessee for carrying out extra load, which may cause wear and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third parties in violation of section 40 A (2) (b) of the Act. He placed reliance upon order passed by Ld.AO. 17. We have perused observations of authorities below. 17.1 It is observed that Ld.CIT(A) deleted addition by observing as under: "The appellant had paid Rs. 1,60,79,000/- to one of its relatives who had supplied 4 Hyava trucks or dumpers. The company incurred expenditure of Rs. 2,16,98,250/- as hiring charges and rake loading charges. The expenditure was incurred for hiring of machinery like excavators, dumpers and trucks. Although various machineries and transport vehicles are owned by the appellant company, but due to nature and urgency of work, it has to hire the machineries from third parties also. The assessee company dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties vis a vis the prevailing rates applicable for similar nature of work. It is worth mentioning here that all expenditure was subject to TDS and TDS was deducted by the appellant company. The appellant company had made TDS on the payment related to Faridabad Gurgaon Minerals, a proprietorship of Mr. Aman Sethi who is one of the Directors of the appellant company. The payment made of outside parties was Rs. 96 per ton whereas payments related to is Rs. 95 per ton. The appellant company took 4 trucks and one excavator on hire from the above said farm. Considering this competitive figures and date in the following table, I agree that the payments made are genuine, favourable and in accordance with law. COMPARISON CHART OF HIRING CHARGES ..... X X X X Extracts X X X X X X X X Extracts X X X X
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