IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN FRIDAY, THE 29TH JULY 2011 / 7TH SRAVANA 1933 ITA.No. 204 of 2002() --------------------- AGAINST ORDER DATED 31/01/2002 IN ITA.44/COCH/1998 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT / APPELLANT ------------------------------ THE COMMISSIONER OF INCOMETAX, THIRUVANANTHAPURAM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENT(S): / RESPONDENT ------------------------ M/S.HINDUSTAN NEWSPRINT LTD., NEWSPRINT NAGAR P.O., KOTTAYAM ADV. SRI.A.K.JAYASANKAR NAMBIAR FOR R THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 29/07/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA NO.204/2002 APPENDIX APPELLANT'S EXHIBITS ANNEXURE A : COPY OF ASSESSMENT ORDER DATED 31/01/1997. ANNEXURE-B : COPY OF CIT(A)'S ORDER DATED 30/07/1999. ANNEXURE-C : COPY OF ITAT'S ORDER DATED 31/01/2002. //TRUE COPY// PA TO JUDGE. jg C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... I.T.A.No.204 of 2002 .................................................................... Dated this the 29th day of July, 2011. J U D G M E N T Ramachandran Nair, J. Heard learned Standing Counsel for the appellant and learned counsel appearing for the respondent. 2. Two questions have been raised for our decision, one pertaining to disallowance of guest house expenditure and other pertaining to disallowance of business expenditure claimed towards penalty paid to the Forest Department. 3. After hearing both sides, we do not find any merit in the appellant's case because both the appellate authorities came to the conclusion that the penalty paid, which was at the rate of Rs.50/- per metric tonnes for belated collection of forest woods, which is the raw material for the respondent Company, is compensatory in nature. So far as the guest house expenditure is concerned, the issue is covered against the Department by our decision in ITA No.168/2001 relating I.T.A.No.204/2002 2 to the same assessee, wherein we have considered the peculiar features and location of the respondent Company, which is a Public Sector Company under the control of the Central Government. Therefore, we do not find any merit in the I.T.Appeal and the same is accordingly dismissed. (C.N.RAMACHANDRAN NAIR, JUDGE) (P.S.GOPINATHAN, JUDGE) jg