Income Tax Appeal Nos. 3, 4, 73, 85 of 2010 and 14 of 2015. Case: The Commissioner of Income Tax-I Vs Western Coalfields Ltd.. High Court of Bombay (India)

Case NumberIncome Tax Appeal Nos. 3, 4, 73, 85 of 2010 and 14 of 2015
CounselFor Appellant: Anand Parchure and Bhushan Mohata, Advocates and For Respondents: K.P. Dewani, Advocate
JudgesB. P. Dharmadhikari and V. M. Deshpande, JJ.
IssueIncome Tax Act, 1961 - Section 37
Judgement DateJanuary 13, 2016
CourtHigh Court of Bombay (India)

Judgment:

B. P. Dharmadhikari, J.

  1. The questions which arise for adjudication in these matters as formulated are common. It is not in dispute that the contribution by the assessee as the employer and the provisions made to honour the commitment in terms of the National Coal Wage Agreement [NCWA] has been already accepted by this Court and the challenge of Revenue thereto is rejected. We find that after expiry of the earlier NCWA when the negotiations were going on, the assessee made the provision for increments on estimate basis. It was certain that as per the NCWA under negotiations, the wage rise was inevitable. Hence, in corresponding previous year, the provision has been made for the incremental arrears. Thus, the liability was certain and to crystallize after the NCWA was finalized.

  2. In this situation, we find that the provision was made for known liability and therefore the approach by the Income Tax Appellate Tribunal, Nagpur Bench, Nagpur [ITAT] cannot be said to be unjust. Hence, no substantial question arises on that count.

  3. Insofar as the overloading charges are concerned, after hearing learned Advocate Shri Parchure for the Revenue and learned Advocate Shri Dewani for the assessee, we find that the percentage of overloading charges paid by the assessee to the railways as compared to the normal loading charges is minuscule. The overloading charges do not appear to have been paid deliberately. Learned Advocate Shri Dewani attempted to explain that on account of mechanical process of loading coal into railway wagons, some times the extra coal is overloaded. He submits that all these are the contingencies in the course of business and no malice can be contributed to anybody. He states that the ITAT in paragraph 7 of its order correctly appreciated the controversy.

  4. We have perused the said paragraph. In that paragraph the ITAT has relied upon its earlier judgment in paragraph nos. 25 and 26. It is not in dispute that those judgments are today impugned before us in connected matters. The overloading charges or under loading charges are payable in terms of contract between the parties and it is not an offence. It is purely a commercial transaction. In this situation, we do not find any substantial question of law arising as the ITAT has allowed...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT