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2011 (7) TMI 1017 - AT - Income TaxTonnage tax scheme under Chapter XII-G - "Qualifying Ship" u/s 115VD- The main activity of this ship was to transport thermal coal from one location to another location within the country. Revenue stated, such ship would not come within the ambit of a "qualifying ship" for availing of the tonnage tax scheme - HELD THAT:- Order of Accountant Member - Just because a seagoing ship was used to transport coal between the ports which were connected by rail/road, would not be sufficient enough a reason to say that it was not qualified under section 115VD. Clause (i) of section 115VD was not intended for that purpose but only to ensure that profits, from services and sale of goods which could be effected on land did not get any unintended benefits by shifting the business to a seagoing ship, just to get the benefit of tonnage tax scheme. We are therefore of the opinion that the Commissioner of Income-tax (Appeals) was very well justified in directing the Assessing Officer to give the benefit of tonnage tax scheme under section 115VD of the Act to the assessee - Decided against revenue. Order of Judicial Member - Since the language employed in the relevant provision here is plain and simple, without any ambiguity or flaw, natural grammatical meaning has to be given, therefore, in my considered view, if a ship, the main purpose for which it is used is the provision of goods or services of a kind normally provided in land it would disqualify that ship for the purpose of tonnage tax scheme as specifically mentioned in clause (i) of section 115VD. Action of the Assessing Officer is proper and justified to hold that the ship is not a qualified ship for the benefit of tonnage tax scheme as envisaged under the relevant provisions of law - Decided in favour of revenue. Order of Third Member - Theoretically speaking, even transport planes can carry coal from one destination to another destination. These kinds of extreme views are not at all called for in interpreting a beneficial provision couched in simple language. The AO is trying to bring in additional conditions which have never been contemplated in drafting the law. On the facts and circumstances of the case agree with the view of the learned Accountant Member to hold that the ship operated by the assessee Ship in question is transporting thermal coal from one location to another location within the country, is a qualifying ship under section 115VD of the Income-tax Act, 1961 and the assessee is entitled for the benefit of tonnage tax scheme provided under Chapter XII-G. I agree with the view of the learned Accountant Member that the appeal of the Revenue is liable to be dismissed. Matter will be placed before the regular Bench for the passing orders, to finally dispose of the appeal on the majority view.
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