TaxTMI 
TaxTMI 
2014 (6) TMI 971
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....made by the A.O. of Rs. 3,24,148 and Rs. 74,90,837 towards demurrage charges and penalty charges (imposed by Central Coalfields Limited) respectively since these are penal in nature and under the Incometax Act, 1961 penalty of any sort is not an allowable expense. 2. That on the facts and circumstances of the case, the Ld. CIT(Appeals) has erred in deleting the disallowance made by the A.O. towards excess depreciation claimed by the assessee company in respect of Tippers & Dumpers which were used for assessee's own business and not let out on hire. 3. That the appellant craves leave to add, delete, alter, modify or take new grounds of appeal." 3. Apropos Ground No.1 : Demurrage charges and penalty charges : 3.1. On this issue the AO n....
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....er submitted that the Hon'ble Calcutta High Court's decision in the case of CIT vs Jiyajeerao Cotton Mills Ltd. 103 CTR 426 also supports the submission of the assessee. The ld. DR, on the other hand, relied on the order of AO. 6. We have heard both the counsel and perused the records. We find that the Tribunal in assessee's own case earlier has decided the issue in favour of the assessee. In this regard the Tribunal's decision in assessee's own case in ITA NO.334/Kol/2001 for A.Yr. 1997-98 and ITA No.687/Kol/2002 for A.Yr.1998-99 are relevant. Since it has been decided by the Tribunal in assessee's own case on identical issue there is no reason to differ from the same. Moreover, the case law of the Hon'ble Calcutta High Court in the case....
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.... of the contract." 6.1. Thus we find that when the amounts are paid on contractual obligation the same have to be allowed as business expenditure. The amount paid for non delivery of goods in time is allowable as deduction even though such amount is designated as 'penalty' in the supply contract, time being the essence of the contract. In view of the above discussions and precedent we do not find any infirmity in the order of the ld. CIT(A) and accordingly we uphold the same. 7. Apropos Ground No.2 :-depreciation claimed in respect of Tippers and Dumpers. 7.1. On this issue the AO noted that the asessee has claimed deprecation of 30% on the block of assets namely tippers and dumpers etc. @30% instead of 15%. The assessee claimed that it ....
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....Revenue is in appeal before us. 8. We have heard both the counsel and perused the records. The ld. Counsel of the assessee submitted that the issue is squarely covered in favour of the assessee on the decision of the Jurisdictional High Court in assessee's own case in ITAT No.231 of 2010 vide order dated 10th January, 2011 for A.Yr.2006-07. The ld. DR could not controvert the submission of the ld. Counsel of the assessee. Upon careful consideration we find that this issue has been decided by the appellate authorities in assessee's own case in the earlier years in favour of the assessee. The Hon'ble Jurisdictional High Court has also considered the issue and has decided in favour of the assessee holding as under :- "The learned Tribunal be....