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2012 (4) TMI 262 - AT - Income TaxProfit on 'sale of ships' - CIT(A) stated profit from sale not attributable to the core activities defined for a tonnage tax company and as such is not to be include in the "Book Profit" of a tonnage tax company u/s 115 V-0 which is to be excluded in determining the Book Profits u/s 115JB of Income Tax Act - Assessee contented that it is carrying on only one activity of operation of ships and the entire income relating to ships as recorded in the profit & loss account was to be taken as profit derived from the activities of tonnage tax company and the same was to be reduced from the book profit for the purpose of sec.115JB – Held that:- As per the provisions section 115VI(i)(2), core activities of a tonnage tax company mean, inter alia, its activities from operating qualifying ships - the activity of sale of old ships cannot be regarded as an activity from operating qualifying ships – favour of revenue. Income from sale of ship - Held that:- this issue is squarely covered against the assessee by the decision of Special Bench of ITAT at Hyderabad in the case of Rain Commodities Ltd. (2010 - TMI - 203366 - ITAT HYDERABAD) - provisions of section 115JB have an overriding effect upon other provisions of the Act and, therefore, the method of computation of book profit provided in the Explanation to section 115JB should be followed while computing the book profit and the normal provisions of computation of profit under any head of the Act shall not be applicable – in favour of revenue.
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