2015 (5) TMI 1183

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....of acting as clearing and forwarding agents mainly in the Mangalore Port Trust (MPT). The assessee claimed as a deduction a sum of Rs. 4,67,64,763 on account of payment made to labourers at MPT. In the business of forwarding, clearing and stevedoring, the assessee has to engage workers of MPT alone. The wages are paid to the workers by the Port Trust authorities. The assessee has to pay the charges to MPT only towards wages payable to workers, who in turn pay the same to the workers. Apart from the payment made to Port authorities, the assessee also pays wages directly to workers. According to the revenue, such payment which is referred to as "speed money" was illegal and hit by Explanation to section 37(1) of the Act. According to the asse....

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.... ITA No.1209/Bang/2009 dt.30.6.2010, at para 5 on pages 4 & 5 thereof this Tribunal has upheld the CIT(Appeals)'s order deleting the disallowance on account of payment of speed money which is extracted and reads as under : "5. We have heard the rival submissions and minutely perused the records furnished before us. The following facts of the case have merits and cannot be brushed aside. 1) The payments are made to the laborers employed under pooling arrangements canalized by the New Mangalore Port Trust. 2) The assessee occupation is 'Clearing & Forwarding Agent' which requires high integrity and goodwill. 3) The assessee has to entirely depend on the labour force to execute its work and thus keep up the ....