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TMI Blog2018 (10) TMI 1898X X X X Extracts X X X X X X X X Extracts X X X X ..... ls raised by the Revenue in its lead case in ITA No.1532/Kol/2017, for Assessment Year 2014-15 are as follows: "1. In the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition made by the A.O on account of disallowance of Railways Punitive charges of Rs. 69,77,664/- relying with the submissions of the assessee without appreciating the fact that the disallowances as the overloading charges is nothing but a penalty as per provision of section 73 of the Indian Railway Act, 1989. 2. In the facts and circumstances of the case, the Ld. CIT(A) erred in law as well as fact in deleting the addition made by the A.O on account of interest paid on belated deposit of T.D.S of interest on TDS of Rs. 1,67,074/- without considering the fact that such interest is penal in matter. 3. In the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition made by the A.O on account of disallowance u/s 14A r.w. Rule 8D(2)(iii) of Rs. 3,69,866/- relying with the submissions of the assessee without considering the direction of Circular 5/2014. 4. The appellant craves the leave to make any addition, alteration and modification etc. of ground or groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overloading charges paid by the appellant to the Railways are paid in the regular course of business in accordance with the notification issued by Ministry of Railways doted 23.12.2005. The notification of Ministry of Railways dated 23.12.2005 provides a Schedule in which 'Situation A' and Situation B provides that if the aggregated payload in a rake exceed the combined permissible carrying capacity of the rake, the punitive charges should be levied as per 'Part - I, 'Part-II, Part-Ill of Situations A & B" It provides that in case of overloading upto1/2 tonnes, 'punitive charges' eligible on the entire weight of loading beyond the permissible carrying capacity shall be nil (as per different tables of Situation A' and Situation B' and in case the weight of commodity exceeds the permissible carrying capacity of the wagon by more than 1/2 tonnes, the punitive charges eligible on the entire weight loading beyond the permissible carrying capacity would be 2 times the freight rates applicable to that commodity in case of Situation A' and 3 times the freight rates applicable to the highest class in case of Situation B'. Thus, it is obvious from the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that in the facts and circumstances of the present case the claim of the assessee for deduction was rightly allowed by CIT(A). We therefore uphold the order of CIT(A) and dismiss ground no.1 raised by the revenue." 8. As the issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench in assessee's own case(supra) and there is no change in the facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings of the Tribunal and the ld. CIT(A) has allowed the appeal of the assessee. We find no reason to interfere in the said order of the ld. CIT(A) and the same is hereby upheld. Therefore, ground no.1 raised by the Revenue in ITA no.1532/Kol/2017 and Ground No.1 raised by the Revenue in ITA No.1533/Kol/2017 are dismissed. 5. Ground No.2 raised by the Revenuein ITA No.1532/Kol/2017 and Ground No.2&3 raised by the Revenue in ITA No.1533/Kol/2017 relate to disallowance on account of interest paid on belated deposit of TDS. 6. At the outset itself, the ld. Counsel for the assessee stated that this issue is squarely covered by the decision of the Coordinate Bench on identical issues in the case of DCIT vs. M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory objection under the Act, which is calculated with reference to the tax on income, cannot be allowed as a deduction. Therefore, it was to be held that deduction of interest levied under sections 139 and 215 would not be allowable under section 37. In the above judgment, the claim of the assessee for interest expenses was denied as it defaulted to make the payment of advance tax as per the provisions of the Act. The advance tax is nothing but income tax only which the assessee has to pay on his income. In the instant case the default relates to the delay in the payment of advance tax and consequently interest was charged on the delayed payment of advance tax. In the above judgment the Hon'ble Apex Court held that as Income Tax paid by the assessee is not allowable deduction and therefore interest emanating from the delayed payment of income tax (advance tax) is also not allowable deduction. However the facts of the instant case before us are distinguishable as in the case before us the interest was paid for delayed payment of service tax & TDS. The interest for the delay in making the payment of service tax & TDS is compensatory in nature. As such the interest on delayed pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 733 cannot be applied to the case on hand. Thus, in our considered view, the principle laid down by the Hon'ble Supreme Court in the case of Bharat Commerce Industries Ltd. (supra) is not applicable in the instant facts of the case. Thus, we hold that the Assessing Officer in the instant case has wrongly applied the principle laid down by the Hon'ble Supreme Court in the case of Bharat Commerce Industries Ltd.(supra). We also find that the Hon'ble Supreme Court in the case of Lachmandas Mathura (Supra) has allowed the deduction on account of interest on late deposit of sales tax u/s 37(1) of the Act. In view of the above, we conclude that the interest expenses claimed by the assessee on account of delayed deposit of service tax as well as TDS liability are allowable expenses u/s 37(1) of the Act. In this view of the matter, we find no reason to interfere in the order of Ld. CIT(A) and we uphold the same. Hence, this ground of Revenue is dismissed. 7. As the issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench(Supra) on the identical facts and law, and there is no change in the facts of law and the Revenue is unable to produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merit in the argument that the investments were made by the own fund of the assessee and therefore no disallowance out of interest expenditure was justified. The contention of the assessee is also supported by the decision of the jurisdictional High Court in the case of Britannia Industries Ltd 280 ITR 525 (Cal). In view of the above, the addition of Rs. 205685/ -made under rule 8D(2)(ii) is deleted. The assessee has contended before me that all investments have not yielded dividend income during the year and therefore no disallowance could lawfully be made under rule 8D(2)(iii) for all investments in view of the decision of the jurisdictional ITAT in the case of REI Agro Ltd (ITA No.1331/Kol/2011). The AO may verify the contentions of the assessee in this regard. The AO shall then re-compute the disallowance under rule 8D(2)(iii) in view of the decision of the jurisdictional ITAT in the case of REI Agro Ltd (supra) by considering only those investments which yielded tax free dividend income during the year. Ground no 4 is thus, partly allowed." 22. Aggrieved by the order of CIT(A) the revenue has raised ground no.3 before the Tribunal. The ld. DR placed reliance on the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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