TMI Blog2022 (8) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... o dock 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. - I.T(SS)A Nos.08 to 11/Kol/2021 And I.T(SS)A Nos.12 to 16/Kol/2021 And I.T(SS)A Nos.06 & 07/Kol/2022 - - - Dated:- 22-8-2022 - Shri Sanjay Garg, Judicial Member and Shri Rajesh Kumar, Accountant Member For the Appellant : Smt. Arati Agarwal, Advocate Rosy Banerjee, Advocate For the Respondent : Shri Sudipta Guha, CIT-DR ORDER PER SANJAY GARG, JUDICIAL MEMBER: The captioned bunch of appeals have been preferred by two separate assessees for different assessment years against separate 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... patnam 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 leaders as speed money to expedite the work and Rs.5,88,968/- were paid to various Government officials of Railways, Customs, Port Authorities etc. AO has disallowed Rs.5,88,968/-, being illegal payments. AO allowed only 25% of speed money and disallowed the balance amount of Rs.29,69,823/- by holding it to be illegal expenses and further held that these cannot be allowed u/s. 37 of the I.T. Act. Accordingly, Assessing Officer, thus, disallowed Rs.35,58,791/- (Rs.29,69,823/- + 5,88,968/-) and added the same to the total income of the assessee. 4. In appellate proceedings, appellant submitted before the CIT(A) that the issue relating to amount of Rs.5,88,968/- paid to police, Customs, Port Officials etc was not pressed. Hence, addition to the extent of Rs. 5,88,968/- was confirmed by the CIT(A). The assessee did not prefer any appeal against the said confirmation of disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cials etc. Under the same head the assessee had also booked expenses related to speed money. He observed that it could not be ascertained whether the assessee had booked only the speed money paid in cash through self-made vouchers or it had made payments which were illegal in nature, but still shown those as speed money. He further noted that apart from the possibility of certain illegal expenses to have been booked as speed money, there may be inflation of quantum 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 justificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even produced and further the books of accounts have not been rejected, such expenditure has been allowed by the Hon ble High Court and different Benches of the Tribunal. 7. The ld. DR, on the other hand, has relied upon the findings of the lower authorities. 8. We have considered the rival submissions and gone through the record. Though the ld. counsel has submitted that the entire expenditure in this respect is required to be allowed, however, she has been fair enough to submit that considering the fact that the payments were made in cash and that each of the expenditure was not verifiable, certain reasonable percentage of the total amount may be disallowed. The ld. DR has also agreed that certain reasonable disallowance of the total expenditure claimed may be disallowed. After consulting both the ld. representatives of the parties, we are of the view that taking into consideration the facts and circumstances of the case, 10% of the total expenditure claimed in each assessment year would make a reasonable disallowance. The ld. counsel for the assessee has agreed in the open court for disallowance of 10% of the total expenses on account of speed money paid to dock labour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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