TaxTMI 
TaxTMI 
2011 (3) TMI 278
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....Darshan Roadlines which specialises in transporting cargo of over -Dimensional Consignments where the front side and rear dimension of the consignment as well as the weight of the consignment exceed the same allowed under the permit granted by the RTO and the limits laid down under the Motor Vehicle Act, 1988 and the rules made thereunder. During the course of assessment proceedings the Assessing Officer noticed that the assessee paid compounding fees aggregating to Rs. 73,45,953 to the RTO at the Check Post at Bhachau, Gujarat on various trips during the year for transportation of over dimensional consignments in its trailers of M/s. Suzlon Energy Ltd. The Assessing Officer asked why the same should not be disallowed as it is in the nature....
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....d Chadha Co. in ITA No. 3524/Mum./2007 and the facts are similar. He further submitted that the Central Government itself has clarified vide circular dated 3rd September, 2008 that such consignments meant for infrastructural purpose should be exempt from levy of compounding fees by RTO and relied on the Hon'ble Gujarat High Court decision in the case of Nabros Transport (P.) Ltd. to submit that this levy was held arbitrary and illegal when it was collected only at Check Posts in Gujarat. He further referred to section 86(5) of the Motor Vehicle Act and relied on the precedence on the issue in the following cases:- (i) CIT v. Ahmedabad Cotton MFG Co. Ltd. 205 ITR 163 (SC) (ii) CIT v. H.M. Parthasarathy 212 ITR 105 (Mad) &....
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....es paid for transporting over dimensional consignments which is assessee's business itself. 8. We have considered the issue. As rightly considered by the CIT(A) fees paid is not in violation of law but an option given to the assessee to pay compounding fees for transporting over dimensional consignments generally termed as over loading charges. This issue was elaborately discussed by the ITAT in the case of M/s. Chadha and Chadha Co. in ITA No. 6140/Mum./2009 dated 17-9-2010 relied upon by the assessee wherein the ITAT in its order has considered as under:- "9. The liability for additional freight charges was considered in the case of ITO v. Ramesh Stone Wares by the ITAT Amritsar Bench in 62 TTJ (Asr) 93 wherein the add....
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....alty paid on account of violation of National Stock Exchange Regulations in the case of Master Capital Services Ltd. v. DCIT and the Hon'ble ITAT Chandigarh "A" Bench in ITA No. 346/Chd/2006 dated 26th February 2007 (108 TTJ (Chd) 389 has considered that fines and penalties paid by the assessee to NSE for trading beyond exposer limit, late submission of margin certificate due to software problem and delay in making deliveries of shares due to deficiencies are payments made in regular course of business and not infraction of law, hence allowable. In the assessee's case also these fines are paid regularly in the course of assessee's business for transportation of goods beyond the permissible limit and these payments are being made in the regu....