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2022 (5) TMI 827 - AT - Income TaxEligibility for Tonnage Tax Scheme - AO denied tonnage tax benefit claimed by the assessee u/s.115VC of the Act, on the ground that the assessee is only a fractional owner in the qualifying ship M.V.Gem of Ennore and thus, ship operated by the assessee cannot be considered as qualifying ship as per provisions of section 115VC - also AO further observed that the assessee does not satisfy conditions prescribed u/s.115VD to be eligible for claiming benefit of tonnage tax - HELD THAT:- As in assessee’s own case right from assessment year 2005-06 onwards, where the Tribunal after considering relevant facts and also provisions of section 115VC, 115VD, 115VP of the Income Tax Act, 1961, had very clearly observed that the assessee had satisfied conditions prescribed under Chapter XII-G of the Income Tax Act, 1961, to be qualified for benefit of tonnage tax as per provisions of the section 115VC of the Income Tax Act, 1961. We further noted that the Tribunal [2017 (10) TMI 1604 - ITAT CHENNAI] relevant to assessment years 2012-13 & 2016-17 had considered an identical issue and by following decision of the Tribunal in assessee’s own case for earlier assessment years, had held that the assessee is entitled for benefit of tonnage tax. We further noted that the Tribunal had also considered case of other co-owners of qualifying ship M.V.Gem of Ennore and after considering relevant facts has rightly held that the assessee has rightly claimed benefit of tonnage tax as per provisions of section 115VC of the Income Tax Act, 1961. As regards observations of the Assessing Officer with regard to operation of the ship by M/s. West Asia Maritime Ltd., we find that as per provisions of section 115VH where a qualifying ship is operated by two or more companies by way of joint interest in the ship or by way of an agreement for the use of ship and their respective shares are definite and ascertainable, the tonnage income of each such company shall be an amount equal to a share of income proportionate to its share of that interest. In this case, the claim of the learned AR for the assessee was that the assessee had claimed benefit of tonnage tax, as per definite and ascertainable share of the assessee in terms of agreement with other co-owners. Therefore, we are of the considered view that there is no merit in the observations of the Assessing Officer that operation of the ship was done by M/s. West Asia Maritime Ltd. and thus, the assessee is not entitled for benefit of tonnage tax. Thus we are of the considered view that the assessee is entitled for benefit of tonnage tax as per provisions of section 115VC - Decided in favour of assessee.
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