TaxTMI 
TaxTMI 
TaxTMI 
2012 (9) TMI 284
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....the case of the appellant in regard to a sum of Rs. 1,14,00,000 being the Wagon Facilitation Charges paid. 3. That the Learned A.O. and the CIT(A) wrongly assumed that the appellant paid rent/hire charges for the use of the wagons of the wagon investors viz. Feegrade & Co. Pvt. Ltd. and Rungta Sons Pvt. Ltd., when no such services were taken for wagon facilitation charges. 4. That the Learned A.O. and the CIT(A) erred while considering the availment of wagon facilities available from Railway to the wagon investors in lieu of wagons purchased by them as hiring of plant & machinery. 5. That the order of the learned A.O. and CIT(A) adding and confirming respectively of Rs. 1,14,00,000 for non-deduction of TDS under section....
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....able which entry tax was not claimed as an expenses but was identified as a payment when the same had been raised in the parties bills for want of submission of statutory forms. The same was disallowed u/s.43B by the Assessing Officer. 3. Both the issues were appealed against before the learned CIT(A). The learned CIT(A) negated the claim of the assessee for the allowance u/s. 40(a)(ia) in spite of the assessee bringing on record the case laws on the issue in the case of Vodafone Essar Ltd. v. Dy. CIT (TDS) [2011] 45 SOT 82 (Mum.). He held that the assessee had acquired the railway rakes and claimed depreciation, therefore, the payment to the two companies was on account of hiring their space being an arrangement as was in assessee's own c....
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....aranteed supply of two bonus rakes will be made without freight concession. (For customers opting for EOL Scheme 2 further additional bonus rakes will be supplied without freight concession). vi. No Lease charges shall be payable under WIS. vii. Ownership of wagons procured under Wagon Investment Scheme (WIS) shall get transferred to Indian Railways after 10th years for BOXN rakes, 15 years for BCN rakes, 9 year for BTPN rakes, 15 years for BRNA rakes, 7 years for BOST rakes and 7 years of BOBRN rakes. The above scheme clarifies that the wagons purchased and handed over to Railway shall be mixed with the common pool. After completion of 10th year, the assessee shall automatically loose the entitlement, since the said wagons sha....
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....erence on this issue is made in the case of M.S. Kandappa Mudaliar v. CIT [1957] 32 ITR 313 (Mad.), where it was held that payment made for users quota would qualify as business expenditure. (Ref: case decision contained in pages 35 to 38 of the Paper Book). In the context of the above submission, it is clear that investment made in the Wagon Investment Scheme, by way of providing wagons to railway to avail rakes on priority basis is different from payment made to outsiders to use their entitlement known as Wagon Facilitation Charges. The same payment of Wagon Facilitation Charges cannot be treated as hire charges for use of wagons of said outsider parties. The assessee has purchased wagon handed over the same to railway, which is mixed in ....
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....would require the assessee to pay the entry tax is on account of income already rendered to tax cannot be disallowed. He prayed that the Assessing Officer be directed to delete the said disallowance. 6. The learned CIT-DR pointed out that the arrangement has been considered by the Assessing Officer and the learned CIT(A) squarely fits into the definition for the purpose of disallowance u/s.40(a)(ia). The assessee cannot say that it was the reimbursement insofar as the learned CIT(A) has rightly held that the assessee could not step into the shoes of the Railways for allowing the assessee 10 years period during which period the amount paid by the assessee was to be liquidated against other use to the Railway wagons were required by the asse....
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....is clearly crystallized the issue in favour of the assessee for having obtained its own wagon investment, the assessee covered the risk from other parties who were similarly placed and who in turn gladly allowed the assessee to use the rakes when they did not require it. The Assessing Officer therefore misdirected to hold that the arrangement was an arrangement as considered under the provisions of Section 194-I insofar as at no point of time the license to use the wagons could be considered for the peaceful enjoyment of the landlord being the assessee. The parties namely M/s. Free Grade and Co. Pvt. Ltd., and Rungta Sons (P) Ltd., are obviously not Government parties who could be said to be owning the wagons which was the mutual arrangemen....