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2011 (7) TMI 584 - AT - Income TaxTonnage tax scheme denied - Interest income from house building + advances given + miscellaneous income - these types of income cannot be considered as income generated from the core activity of operating qualifying ships - reopening of assessment - Held that:- With regard to the income categorized as "other income", the CIT(A) has taken adverse inference in the absence of any details with regard to the nature of items of income included therein. However, during the course of hearing, assessee pointed out that the explanations given before CIT(A) in respect of "other income" for the assessment year 2006-07, it is stated that the other income mainly includes "Exchange variation accounted in connection with a foreign dredging contract to Bahrain" and for other two years it was stated that the "Other income" mainly includes "Commission received from the chartering of dredgers for the SSCP Project…". Thus as the assessee has not furnished the details of actual receipts, nature of receipt, from whom it was received, the date, the amount etc., except making a general statement all the receipts categorized under the head "Other income" in these three years need to be examined by the Assessing Officer - set aside the order of CIT(A) on this issue and restore the same back to AO - in favour of assessee by way of remand. Deduction towards expenditure incurred towards earning receipts if item of receipts is not considered as receipts relating to the core activity of dredging - Held that:- All the expenses incurred by the assessee shall be deemed to have been allowed while computing the income of the assessee under the special provisions of the Act, hence there cannot be any further deduction of the same expenditure. If the claim of the assessee is allowed, then it would amount to double deduction of the same expenditure, which is not permitted under the Act - against assessee. Interest awarded under arbitration - selection of year of assessment - Held that:- Though the assessee claims that the interest awarded by the arbitrator was disputed by both the parties, no material was placed on record to suggest that both the parties have resorted to any legal process in support of their respective claims. The details of interest income so accounted for in that year are not available on record. However, the very fact that the assessee has received interest income in the subsequent year very much suggests that the right to receive the impugned interest has accrued to the assessee during the year under consideration. Accordingly, the view of CIT(A) upheld that the impugned interest has to be assessed during the year under consideration as per the mercantile system of accounting followed by the assessee.
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