Railway Punitive Charges for wagon overloading is allowable expense

DCIT Vs. M/s Fee grade & Company Ltd. (ITAT Kolkata) Punitive charges for overloading were actually in the nature of additional freight for transporting goods beyond the permissible carrying capacity which cannot be categorized as an expenditure incurred for any purpose which is an office or infringement of law. Following the aforesaid decision the CIT(A) took the view that payment in question was compensatory in nature and not penal and therefore the provision to Explanation to Section 37(1) of the Act will not be applicable. In the decision relied upon by CIT(A) there is also a discussio...