2015 (8) TMI 1568 - AT - Income Tax

Applicability of Tonnage Tax Provisions to Sundry credit balance written back u/s. 41(1) - CIT(A) has deleted the impugned addition/disallowances following the earlier years order of the Tribunal - HELD THAT:- As decided in assessee own case [2011 (7) TMI 588 - ITAT, MUMBAI] legislature in its wisdom provided the manner of computation of income under the tonnage tax scheme. In section 115VA, it is clearly provided that sections 28 to 43C would not over ride the computation of profits and gains under section 115VA. As section 41(1) falls within sections 28 to 43C, no separate addition under that section can be made. As section 41(1) seeks to bring to tax certain specified items of receipts under the head “profits and gains of business” the scheme should not be invoked while computing profits and gains of business under Chapter-XII-G. Hence, we are of the opinion that the argument of the assessee should succeed.

As no distinguishing decision has been brought to our notice by the Revenue, respectfully following the orders of the Co-ordinate Bench, we uphold the findings of the Ld. CIT(A). Ground No. 1 to 4 of the Revenue is accordingly dismissed.

Sundry receipts from core shipping and reimbursement of managed vessels - As decided in own case [2015 (3) TMI 751 - ITAT MUMBAI] submitted that neither the A.O. nor the ld. CIT(A) has examined the relevant details placed at 157 of the paper book and urged that the matter may be sent back to the A.O. for deciding the same afresh after verifying the said detail. As the ld. D.R. has no objection in this regard, the issue relating to inclusion or exclusion of item No. 3 & 6 is restored to the file of the A.O. for deciding the same afresh.

Receipts relateable to core activity of operation of qualified ship and part of incidental activity - applicability of provisions of Chapter XII-G relating to tonnage income are applicable - HELD THAT:- We find that commission on disbursements (receipts) and Sundries have not been properly explained by supporting demonstrative evidences. We, therefore, restore these issues to the file of the AO. The assessee is directed to demonstrate its claim of receipts being directly related to the core activity/incidental activity by bringing cogent material evidences on record in respect of these 2 receipts and the AO is directed to examine the same and decide afresh whether these receipts can be clubbed under core activity/incidental activity of the assessee.

In so far as rent on furniture and Application money-right to info Act are concerned, these receipts can be treated as taxable as business income under normal provisions of the Income –tax. The assessee gets part relief in respect of impugned receipts.

Adjustment of the calculation of turnover - Since we have restored the issues relating to 2 receipts to the file of the AO to be decided afresh, the second grievance of the assessee also goes back to the file of the AO which can be decided only after deciding the taxability of receipts or otherwise qua ground No. 1 of this appeal. The AO is directed to decide this issue after deciding the taxability of receipts. Ground No. 2 is allowed for statistical purpose.

Disallowance of administrative expenses and in alternative allowance of proportionate expenditure incurred by the assessee - HELD THAT:- As decided in own case [2011 (7) TMI 588 - ITAT, MUMBAI] Assessing Officer has rightly held that the assessee would not have incurred the expenditure claimed for earning income.

We restore this issue to the file of the AO. The AO is directed to decide this issue as per the directions of the Tribunal given in earlier years and as per the decision taken by him pursuant to the directions given by the Tribunal in earlier years. Ground No. 3 is allowed for statistical purpose.