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TMI Blog2013 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... choice of redeeming the goods by depositing redemption fine - Amount of redemption fine of Rs.4,00,000/- in the present case was compensatory and therefore, fell outside the mischief of explanation of Section 37(1) of the Income Tax Act – Decided in favor of Assessee. - ITA 101/2000 - - - Dated:- 5-8-2013 - S. Ravindra Bhat And Najmi Waziri,JJ. For the Appellant : Mr. Prakash Kumar, Advocate. For the Respondent : Mr. Sanjeev Sabharwal, Sr. Standing Counsel. JUDGMENT Mr. Justice S. Ravindra Bhat (Open Court) 1. The appeal under section 260A of the Income Tax Act, 1961 impugns the order of the Income Tax Appellate Tribunal (ITAT) dated 30.12.1999. 2. This Court had by order dated 09.1.2001 framed the following quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the CEGAT especially paragraph Nos. 18 and 19 to say that the Explanation to Section 37(1) of the Income Tax Act which can be the only rationale for refusal to permit the claim as a deduction was inapplicable. Learned counsel also relied upon the judgment of Madras High Court reported as Commissioner of Income Tax v. N.M. Parthasarathy, 1995 (212) ITR 105 as well as the ruling of the Supreme Court in M/s. Prakash Cotton Mills Pvt. Ltd. v. Commissioner of Income Tax (Central), Bombay, 1993 (201) ITR 684. 7. Learned counsel for respondent Mr. Sabharwal argued that the impugned order ought not to be interfered with since the Tribunal took the note of the relevant tests and considered the scheme of enactment while concluding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, the goods belonging to the assessee had been confiscated under section 111(d) of the Customs Act, 1962, read with section 3 of the Imports and Exports (Control) Act, 1947. However, under section 125 of the Customs Act, 1962, an option had been given to the owner assessee to pay, in lieu of such confiscation, a fine of Rs. 1,84,000 which had been reduced on appeal to Rs. 84,000 and the goods had been cleared exercising the option. If the seized goods, without the exercise of option, had been confiscated once and for all, it goes without saying that the property in the goods shall vest in the Government, in the sense of the Government becoming the absolute owner thereof. The fine amount, whatever be its quantification, that is to say, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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