2010 (1) TMI 223

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....egularisation fee for the deviations that had been indulged in by the assessee while constructing a structure and for having violated the sanctioned plan, in terms of the building bye-laws, which had been approved by the municipal authorities, in terms of the provisions of the Karnataka Municipal Corporations Act, 1976, and the Bangalore Mahanagara Palike Building bye-laws. 2. The claim of the assessee was disallowed by the Assessing Officer, the amount claimed by way of expenditure under the head "Project expenditure", which was nothing but compound fee paid to the Bangalore Mahanagara Palike towards regularisation of deviations in construction was about Rs.4,40,300, for the reason that the amount which was in the nature of penalty, bei....

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....after the levy of fee prescribed by the Corporation from time to time." Therefore, the learned counsel submits that the authorities below have committed an error in law in understanding that the payment was in the nature of a penalty. The further submission is that the ruling of this court rendered in the case of Mamta Enterprises [2004] 266 ITR 356 (Karn) is not attracted to the present case for the reason that in the case of Mamta Enterprises [2004] 266 ITR 356 (Karn), on facts it was found that the builder/assessee had put up the eight floor of the building without obtaining approved plant at all. Whereas in the present case the assessee had put up construction, on obtaining an approved plan from the municipal authorities and compound....

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....appellate jurisdiction under section 260A of the Act. We say so, for the reason that the so-called regularisation fee in terms of bye-laws 6.0 of the Bangalore Mahanagara Palike Bye-laws is a provision made for regularising the deviations/violations as enabled under section 483(b) of the Karnataka Municipal Corporation Act, 1976, which reads as under: "483. Provisions respecting institution, etc., of civil and criminal actions and obtaining legal advice - The Commissioner may - (a)........ (b) compound any offence against this Act, the rules, bye-laws or regulations which may by rules made by the Government be declared compoundable;" 10. Thelanguage of section 483(b) leaves us with no doubt as to the nature of the expenditure....