TMI Blog2015 (12) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the conclusion of the CIT(A) in the impugned order that the order of assessment dated 26.12.2007 was set aside in entirety in the order u/s.263 of the Act is not correct and accordingly the order of the CIT(A) is set aside. The other issues with regard to the other objections raised by the assessee with regard to exercise of power u/s.154 of the Act in the facts and circumstances of the case, are remanded to the CIT(A) for fresh consideration, as the CIT(A) has not considered those aspects in the impugned order. - Decided in favour of revenue for statistical purposes. - ITA No. 631/Kol/2014 - - - Dated:- 2-12-2015 - N V Vasudevan, JM And Waseem Ahmed, AM For the Appellant : Shri Niraj Kumar, CIT (DR) For the Respondent : Shri Manish Tiwari, FCA ORDER Per N V Vasudevan This is an appeal by the Revenue against the order dated 02.01.2014 of CIT(A)- Central-I, Kolkata, relating to A.Y.2005-06. 2. The facts and circumstances under which the above appeal of the revenue arises for consideration are as follows: The Assessee is a company. During the previous year its source of income was from providing services to the shippers/receivers/charterers by op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Explanation to sub-section (2) of section 115JB so far as it relates to the income derived from the activities referred to in clauses (i) and (ii) of sub-section (1) of section 115V-I. 4. A show cause notice u/s.263 of the Act was issued by the CIT. The CIT passed an order dated 21.1.2010 setting aside the order passed u/s.143(3) of the Act with the following direction: I have considered the oral as well as written submission made by Shri Manish Tewari. It is fact that the issue of Tonnage Tax liability of the assessee has been considered by the Assessing Officer. However, no questions are seen to have been raised at the time of hearing regarding the issue under consideration i.e. the adequateness of the creation of the Tonnage Tax Reserve. It is also not the assessee's case that such a question has been raised. The adjustment to be made under S. 115JB, which also applies to the assessee in computing its book profit for working out the Tonnage Tax, has been the matter of substantial litigation but now bought to a conclusion by the Supreme Court's decision in Apollo Tyres case. It therefore appears that the adjustment by the assessee in reducing profit arising fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/ Shipping Companies introduced for the first time in the Act from this Assessment year. The Company is under the bonafide belie/ that Special provisions Relating To Certain Companies as per Chapter XII-B for payment of Minimum Alternative Tax on Book Profits are not applicable to the Company. The Ld. A/R further argued that the Ld. CIT, Central-I , Kolkata, et aside the order u/s. 143(3) with a specific direction to compute the tax liability of the assessee after considering the issue of creation of the correct amount of Tonnage Tax Reserve only. It was also contended that the calculation of Book Profit for charging of MAT u/s. 115J B did not emanate from the order passed u/s. 263 on 21.01.2010. Hence, it was concluded that the issue of levy of MAT u/s. 115.1B read with section 115VO could not be considered under the present proceeding of giving effect to the order u/s. 263 passed by the Ld. CIT. 6.2. The above submissions in respect of levy of MAT u/s.l ] 5JB read with section 115VO of the Act been carefully considered but the same was not found tenable in the eyes of law. The assessee carried on the business of operating of ships and it had opted for Tonnage Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 154 of the LT Act, 1961 is initiated separately. 7. The AO thereafter issued a notice dated 30.11.2010 u/s.154 of the Act to the Assessee for the purpose of determination of total income of the Assessee u/s.115JB of the Act. In response to the said notice the Assessee submitted a reply contending as follows: (i) That non application of section 115JB in the order u/.s 143(3) presupposes that tax payable on total income is higher and hence the detailed working was not spelt out. (ii) That Book profit u/s 115JB was not computed as the company opted for Tonnage Tax Scheme, that there is no reference to computation of Book Profit in the assessment order. (iii) Determination of fresh facts cannot be applied in course of proceedings u/s 154. (iv) The Notice u/s 154 has been issued without proper application of facts. (v) The assessment order u/s 14393) dated 26.12.2007 does not exist because it was set aside by order u/s 263. 8. The AO however held that the objections were without any merit. In particular the AO held that the issue raised in Sec.263 of the Act did not relate to determination of books profits u/s.115JB of the Act and it was in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular issue. On the contrary, the entire assessment order was set aside u/s 263 and the AO was directed to compute the tax liability of the assessee as per law; however, the order u/s 263 contained specific direction for the AO to consider the issue of creation of the correct amount of Tonnage Tax Reserve. The very language of the order u/s 263 clearly shows that the entire assessment order was set aside by the CIT. Under the circumstances, the assessment order dated 26-12-2007 was no longer in existence; and so, the same could not be rectified ix] s 154 by the AO. I am therefore of the considered view that the order u/s 154 passed by the AO is not sustainable in law. Ground no 1 is allowed. In ground no 2, the assessee has contended that the issue was beyond the scope of section 154. Ground no 3 relates to the merit of the issue. As the appeal has been allowed on technical ground, I am not inclined to adjudicate these grounds. Ground no 4 relates to the charging of interest u/s 234B which is consequential. Ground no 5 is general in nature. 10. Aggrieved by the order of the CIT(A) the revenue is in appeal before the Tribunal. We have heard the rival submissions. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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