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2012 (5) TMI 73 - AT - Income TaxDisallowance of common cost - assessee before us is a company engaged in the business of providing services to the shippers and charterers by operating and maintaining a fleet of dry bulk carriers in various sizes. The income from these ships was computed, under the tonnage scheme under section 115VG - Held that: the provisions of Section 115 VF, when an assessee options for taxation under the tonnage scheme, the tonnage income is computed under section 115 VG and the income so computed shall be deemed to be the profits chargeable under the head 'profits and gains from business and profession' and the "relevant shipping income referred to in sub section (1) of Section 115 V-I shall not be chargeable to tax" As evident from a plain reading of the above statutory provision, where a tonnage tax company also carries on any business or activity other than the tonnage tax business, common costs attributable to tonnage tax business are concerned are to be determined on a reasonable basis. However, with regard to the depreciation, the allocation of costs have to take into account use of such asset for tonnage tax business and the other business.Assessing Officer is said to have accepted the same formulae, as is rejected in this assessment year, for apportionment of expenditure in the immediately succeeding assessment year, in our humble understanding, cannot act as a estoppel against the specific provisions of law. The provisions of law under section 115 VJ have not been taken into account by the authorities below. Appeal is allowed by way of remand to AO
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