TaxTMI 
TaxTMI 
2018 (11) TMI 1798
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....e, a government transport company carrying on a business of running buses for the transport of travelling public. While making the assessment for assessment year 2003-04, the Assessing Officer, inter alia, disallowed damages for remittance of Pension Fund Trust paid by the assessee at Rs. 95,88,351/- holding that the damages paid by the assessee for the delayed payments of contribution is not compensatory but damages in the nature of penalty. Aggrieved, the assessee filed an appeal before the CIT(A). 3. Before the CIT(A), the assessee pleaded that "the nomenclature "Damage" used in account head represent interest @ 9.5% charged for the dues pending to be remitted to Pension Fund Trust, based on the interest rate on Provident Fund accumulat....
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....n 37(1) and allowed the appeal . 5. Aggrieved against the order of the Ld CIT(A), the Revenue filed this appeal with the following grounds of appeal: "(i) The Learned CIT(A) failed to appreciate the assessment order framed by the AO with regard to Damages on Pension Fund Trust. (ii) The learned CIT(A) erred in allowing the assessee's appeal with regard to payment of Damages to Pension Fund Trust as the assessee had not proved beyond doubt that the expenditure incurred was purely compensatory in nature during the assessment and remand report proceedings before the AO. (iii) The learned CIT(A) ought to have considered the assessment order and remand report while deciding the assessee's claim which he failed to do so - (iv) The learne....
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....e order of Commissioner of Income Tax (Appeals) be cancelled and the order of the Assessing officer be restored." The Ld. DR presented the case and argued on the lines of grounds of appeal. 6. Per contra, the Ld. AR submitted a copy of "order giving effect to CIT(A) order" passed by the ACIT, Circle -1, Salem for assessment year 2011-12 dated 15.11.2017, wherein, the AO held as under: "3. Accordingly, the case was posted for hearing and the assessee was asked cc furnish necessary documents and evidences in support of their claim. In response, the assessee appeared and represented that the damages paid for remittance to Pension fund trust is nothing but interest @ 9.5% on the delayed pay pent monthly contribution and the payments were co....
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....it arrived. However, the assessee had not added the provision made during the year in the income computation statement. (ii) The learned CIT(A) has failed to appreciate the finding depicted on Page 49-G of the 35th Annual Report referring to the provision of Rs. 135.40 lakhs for the payment towards MACT claims. (iii) The Learned CIT(A) has failed to appreciate as per page no.35 & 46 of the 35 Annual Report retied upon by the assessee. The Profit & Loss account was not found debited towards MLACT claims / provisions. (iv) The learned CIT(A) also failed to appreciate and give a finding on the various provisions made by the assessee aggregating to Rs. 22.39 crores as per the break up filed the Deputy General Manager. (v) Thus, the CIT(....