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TMI Blog2022 (1) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... ompensatory in nature and can be allowed under explanation to Section 37(1) of the Act. Furthermore, on facts the Tribunal noted that when the respondent/assessee loads the goods for dispatch through railway wagons actual measurement of weight cannot be done due to absence of weighing bridge at the originating station. Thus, we find that the Tribunal rightly decided the issue in favour of the respondent/assessee. - IA No.GA 2 OF 2018 (OLD NO: GA/399/2018) In ITAT 25 OF 2018 - - - Dated:- 4-1-2022 - THE HON'BLE JUSTICE T. S. SIVAGNANAM AND THE HON BLE JUSTICE HIRANMAY BHATTACHARYYA Mr. Smarajit Roychowdhury, Adv. for the appellant Mr. Subhas Agarwal, Adv. for the respondent ORDER The Court : This appeal by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re and cannot be deducted as revenue expenditure. e) Whether on the fact and circumstances of the case, the Learned Income Tax Appellate Tribunal erred in treating the Net Present Value (NPV) as revenue in nature and not capital in nature. We have heard Mr. Smarajit Roychowdhury, learned Counsel for the appellant/revenue and Mr. Subhas Agarwal, learned Counsel for the respondent/assessee. The substantial questions of law (a), (b) and (c) above deal with whether the punitive charges paid to the Railways for alleged violation of the provision of Indian Railway Act could be allowable as expenditure and whether deduction can be claimed by the assessee in respect of such expenditure. This issue has been decided in favour of the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal filed by the revenue was dismissed. The operative portion of the judgment reads as follows: Both the Commissioner (Appeals) and the Appellate Tribunal have referred to a judgment reported at 107 ITR 39 (Bikaner Gypsums Ltd. vs. CIT), where a similar question arose. A licence in respect of a certain area had been granted in favour of the assessee in that case for undertaking mining operations. The railways purported to set up railway tracks and even a station on the land without reference to the assessee and unmindful of the assessee s underground rights in respect thereof. The dispute between the assessee and the railways was resolved upon the relevant stakeholders including the assessee, the railways and the State Government a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure. However, as is evident from paragraph 11 of the report, the fee was paid for obtaining a prospecting licence and it was such fee that entitled the business to be conducted in the relevant area. The distinction between the judgment in R.B.Seth Moolchand Sugachand and the judgment in Bikaner Gypsums Ltd. is that in Bikaner Gypsums Ltd. there was a pre-existing right and the expenditure was incurred not to assert a new right but to exercise a pre-existing right. In the present case, it is the same as in Bikaner Gypsums Ltd. since the mining licence was previously issued in favour of the assessee and the payment of the NPV did not extend the area of the assessee s mining operations, it merely removed an impediment in the carrying on of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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