Compensatory Demurrage & Punitive Charges Allowable as Business Expense

DCIT Vs Ripley & Company Ltd. (ITAT Kolkata) The Income Tax Appellate Tribunal (ITAT), Kolkata Bench, has dismissed an appeal filed by the Deputy Commissioner of Income Tax (DCIT), Circle-7, Kolkata, against Ripley & Company Ltd. The tribunal upheld the decision of the Commissioner of Income Tax (Appeals) [CIT(A)], which had deleted the disallowance of demurrage and penalty charges totaling Rs. 1,80,08,417/- incurred by the assessee. The core dispute revolved around whether these charges, imposed by Steel Authority of India Ltd. (SAIL) and Central Coal Fields Ltd. (CCFL), were penal in...