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TMI Blog2022 (8) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... eparate orders of the Commissioner of Income Tax (Appeals), Kolkata [hereinafter referred to as 'CIT(A)']. Since, the common issue is involved in all the appeals, hence they have been heard together and are being disposed of with this common order. IT(SS) No.11/Kol/2021 for assessment year 2009-10 in the case of Bothra Shipping Services is taken as lead case for the purpose of narration of facts and issues involved. 2. IT(SS) No.11/Kol/2021 - The assessee in this appeal has taken the following grounds of appeal: "1. That the assessments order u/s 143(3) r.w. section 153A is time barred as per the provisions of section 153B of the Income Tax Act, 1961 is thus void and bad in law. 2. a. On the facts and circumstances of the case, the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating documents were found and seized. In the course of search, evidences in the form of entries and accounts of illegal payments were found which were recorded in the books of accounts under the head 'Miscellaneous' and incidental Charges'. When confronted with these entries, Shri Ajit Chand Bothra admitted that these expenses pertained to Speed Money paid to various persons including the labourers and Union leaders of Vishakapatnam Port Trust, Government Agencies, Customs Officials, Police, Road Transport Officials etc. In the relevant year, the assessee had booked expenses of Rs.1,60,49,851/- under the head "Miscellaneous and Incidental Charges". Out of these expenses, Rs.39,59,765/- were allegedly paid to Dock Labourers and Union le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t further relied on judgment of Karnataka High Court in the case of CIT vs. Konkan Marine Agencies (2009) 313 TR 308(Karnataka) where it has been held that payments made at port to labourers should be considered for business consideration and cannot be considered as illegal in nature. Appellant had also placed reliance on another judgment of the Hon'ble Karnataka High Court in the case of CIT vs. Cliffort D'souza (11 ITA no. 22/2011), wherein it has been held that the extra payment made to port labourers as speed money for prompt and speedy carrying out the labour work of handling of cargo beyond working hours, was legal. Appellant has further submitted that the AO in assessee's own case in A.Y. 2010-11 and A.Y. 2011-12 has allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of speed money itself which may be on account of booking personal expenses or diversion of funds from the assessee company. The ld. CIT(A) further observed that there was variation in the quantum of speed money paid to dock workers in a proportion to total expenditure under the head 'miscellaneous and incidental charges' and that percentage of such total income declared differed from year to year. The ld. CIT(A) took the assessment year 2005-06 as the base year and noted that the speed money claimed by the assessee for the said year was at 0.50% of the total declared income for that year. He observed that since the assessee had paid speed money at a certain rate in assessment year 2005-06 then there was no justification to pay speed money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 The Assist. Commissioner of Income Tax vs. Sri Ganesh Shipping Agency [MANU/IL/0039/2010] 3 Principal Commissioner of Income Tax - 7 vs. R.G. Buildwell Engineers Ltd. [MANU/DE/7972/2017] 4 Principal Commissioner of Income Tax -7 vs. R.G. Buildwell Engineers Ltd. [MANU/SCOR/43017/2018] 5 Commissioner of Income Tax vs. South India Corporation (Agencies) Limited [2006 (8) TMI 153 - Madras High Court] 6 CIT & ANR Vs. Konkan Marine Agencies (2009) 313 ITR 308 (Kar) 7 ACIT Circle 1(1), Mangalore vs. Delta Infralogistics (Worldwide) [2015 (5) TMI 1183 ITAT Bangalore] To press the point the ld. counsel has submitted that under similar circumstances, the Hon'ble Karnataka High Court in the case of Sri Ganesh Shipping Agency (supra) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock labourers. However, it is made clear that out above order will not affect the disallowance made by the Assessing Officer in respect of illegal speed money paid to certain officers/authorities which has been agreed to by the assessee even before the CIT(A). However, it is also made clear that our above order will not be taken as precedent for any other assessment year. Before parting with the order, it is pertinent to mention here that the assessees, inter alia, has taken certain other grounds of appeal such as relating to the validity of the reopening of the assessment u/s 147 of the Act and other ground relating to the disallowance or of the validity of the assessment framed u/s 153A of the Act which have not been pressed by the ld. c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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