TMI Blog2010 (12) TMI 1318X X X X Extracts X X X X X X X X Extracts X X X X ..... he case, in brief, are that the assessee, an individual, is in the business of transport contract. During the course of assessment proceedings, the Assessing Officer noted that the assessee has paid overload charges of ₹ 11,47,461/- to R.T.O. This expense being the fine paid to RTO for overloading, ITA No. 2081/Mum/2010 (Assessment Year 2005-06 ) the assessee was asked to show cause as to why the same should not be added to the income of the assessee. It was submitted by the assessee that overload charges paid to RTO is collected from the clients for whom they are carrying goods and paid to the RTO; therefore, if the same is treated as fine or penalty and disallowed then the same has to be reduced from the gross receipts of transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the RTO amounting to ₹ 11,47,461/-. 3 In appeal, it was submitted that provisions of Explanation to sec. 37(1) cannot be invoked since overload charges paid by the assessee are not for any purpose which is an offence or prohibited by law. They are not in the nature of fine or penalty because the overloaded truck, after it pays the overloading charges, is allowed to proceed to its destination. The decision of the Tribunal in the case of Western Coalfields Ltd vs ACIT was brought to the notice of the CIT(A). In the aforesaid decision, the assessee while transporting coal to the Electricity Board in Railway Wagon had paid the overloading charges to the Railway Authorities. Disallowance made by the Assessing Officer for such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. 5 Aggrieved with such order of the CIT(A), the assessee is in appeal here before us. 6 The ld counsel for the assessee reiterated the same submissions as made before the Assessing Officer and the CIT(A). He drew the attention of the Bench to the decision of the Ahmedabad Bench of the Tribunal in the case of Agarwal Road lines P Ltd vs DCIT reported in 129 TTJ 49. Referring to the said decision, he submitted that the assessee in that case has paid overload charges for transportation of goods under the Gold Card Scheme of the Govt of Gujarat to carry overload on payment of additional fees. Such compensation fee was paid to RTO that entitled the transporters to carry overload to the final destination without unloading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the parties, perused the orders of the authorities below and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. There is no dispute to the fact that the assessee has paid overload charges of ₹ 11,47,461/- to the RTO. We find the Assessing Officer disallowed the same on ITA No. 2081/Mum/2010 (Assessment Year 2005-06 ) the ground that such overload charge is in the nature of penalty for infringement of law and therefore, the Explanation to section. 37(1) are clearly applicable. We find the CIT(A) also upheld the action of the Assessing Officer on the ground that overload charges paid to the RTO is in the nature of penalty and is not a normal business expenditure but incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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