TMI Blog2018 (11) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of assessee. - I.T.A. No.3870 And 3871/Mum/2016 - - - Dated:- 2-11-2018 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri. Vinay Deshmane For The Revenue : Shri. Manoj Kumar Singh, DR ORDER PER RAMIT KOCHAR, Accountant Member: These two appeals, filed by assessee, being ITA No. No.3870 3871/Mum/2016, are directed against two separate appellate orders dated 16.03.2016 and 07.03.2016 respectively passed by learned Commissioner of Income Tax (Appeals)-1, Mumbai (hereinafter called the CIT(A) ), for assessment year 2006-07 2005-06 respectively , the appellate proceedings had arisen before learned CIT(A) from the penalty orders dated 14.11.2014 and 13.11.2014 respectively passed by learned Assessing Officer (hereinafter called the AO ) u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter called the Act ) for AY 2006-07 2005-06 respectively. First we shall take up appeal of the assessee for AY 2006-07 and as similar issue s are involved in appeal for AY 2005-06, our decision for AY 2006-07 shall apply mutatis mutandis to the appeal filed by the assessee for AY 2005-06. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of proviso to sub-section 1 of section 115VI of the 1961 Act. The assessee also furnished necessary report from Chartered Accountant in Form no. 66 as well as the assessee furnished certificate from Director General of Shipping in respect to minimum training requirement for tonnage tax company u/s. 115 VU(2) of the 1961 Act. 3.2 The assessee had offered in addition to tonnage income , including income from incidental activities , income from interest and dividend under the head Income from other sources . The assessee allocated and claimed administrative expenses of ₹ 6,28,79,765/- against interest income of ₹ 172.11 crores and also the assessee claimed administrative expenses of ₹ 7,33,346/- against dividend income of ₹ 2.01 crores. The allocation of administrative expenses was claimed to be done in the ratio of turnover as per provision of Section 115VJ of the 1961 Act dealing with treatment of common costs. The assessee submitted that it is engaged fully in shipping business and it has no other activity. It was submitted that during the course of business, interest is earned on funds deployed out of surplus cash/unutilized amount standing to the cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de common order dated 21.03.2014. Similarly, the tribunal was pleased to dismiss contentions of the assessee by holding that profits on sale of ships of ₹ 12.10 crores and profits on sale of fixed assets to the tune of ₹ 29 lacs is to be reduced from the turnover of core shipping, vide aforesaid appellate order dated 21.03.2014. Thus, in nutshell assessee lost on all these grounds of appeals before the tribunal. 3.4 The penalty provisions were invoked by the AO u/s. 271(1)(c) of the Act and notice u/s. 274 r.w.s. 271(1)(c) of the Act, dated 25.09.2014 was issued show causing the assessee as to why penalty u/s. 271(1)(c) of the Act should not be levied against the assessee. 3.5 The assessee during the course of penalty proceedings u/s 271(1)(c) conducted by the AO submitted that earning interest by placement of deposits and earning dividend income from its operation in a joint venture company were integral part of the business of operation of qualified ships. Secondly, it was submitted that the assessee apportioned the expenses as per Section 115VJ of the Act. It was also submitted by the assessee that no information was held back nor it filed inaccurate particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ental activities for the purpose of relevant shipping income (a) Maritime Consultancy Charges - Maritime consultancy charges received by a shipping company in the course of business of operating ships in lieu of knowledge offered by it to other companies which do not possess such expertise and which may among other things include rendering advice on setting up of shipping business, ship designing and repair and business acquisition, etc. (b) Income Earned from Loading/Unloading of Cargoes - Charges received for services in connection with loading and unloading of cargo to and from the ship (such charges being separate from the transit charges). (c) Ship Management fees/remuneration for managed vessels - Fees or remuneration earned for providing services of operation and maintenance of vessels on behalf of other ship owners/agencies. (d) Maritime Education/Recruitment fees - Training fees charged/earned by a shipping company by extending its surplus training facility to other personnel in the shipping industry and fees earned from foreign ship owners for rendering services by way of screening, interviewing, short-listing and recruitment of floating staff an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e , the AO observed that assessee claimed non-tonnage items as tonnage items purely on the basis of its interpretation of tonnage tax provision in chapter XII-G of the 1961 Act which were rejected by the AO in view of clear provisions of Section 115VI(2) of the 1961 Act , which as per the AO clearly defined the scope and purview of core activity of shipping income of tonnage company. The provisions of Section 115VI(2) of the 1961 Act are reproduced here-under: 115V-I(2) the core activity of a tonnage tax company shall be- (i) its activities from operating qualifying ships; and (ii) other ship-related activities mentioned as under:- (A) shipping contracts in respect of- (i) earning from pooling arrangements; (ii) contracts of affreightment. Explanation :- For the purpose of this sub-clause,- (a) pooling arrangements means an agreement between two or more persons for providing services through a pool or operating one or more ships and sharing earnings or operating profits on the basis of mutually agreed terms; (b) contract of affreightment means a service contract under which a tonnage tax company agrees to transport a spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO u/s 271(1)(c) of the 1961 Act, the assessee filed first appeal before the Ld. CIT(A) who also rejected the contentions of the assessee , vide appellate order dated 16.03.2016 , by holding as under: 5.3 I have considered the facts and circumstances of the case, gone through the assessment order of the A.O and the submissions of the appellant and also discussed the case with the AR of the appellant. The contentions and submissions of the appellant are being discussed and decided here in under: i. Appellant stated that the assessing officer in the assessment order has nowhere recorded that appellant has intentionally suppressed taxable income. In this regard it is mentioned that as referred to by assessing officer in his penalty order, Hon'ble Supreme Court in the case of Union of India vs. Dharmendra Textile Processors and ors (306 ITR 277), have finally settled this issue and held that penalty u/s. 271(i)(c) is a civil liability and willful concealment is not an essential ingredient for attracting civil liability. Accordingly the assessing officer is under no obligation to prove mensrea before imposing penalty u/s, 271(i)(c). Contention of the appellant is therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus this action of the appellant cannot be said to be bonafide and hence its case is also covered by the provisions of explanation 1 to section 271(i)(c). Further, it may be noted that case of the appellant is not the case of mere disallowance/wrong claim. Hon'ble ITAT in paragraph 10 of their order dated 21st of March 2014, have observed; In the present case, the income was earned by the assessee company on account of interest on fixed deposits made out of surplus funds and dividend Income earned on investment made in the shares of the company and having regard to all the facts of the case, we are of the view that the same cannot be said to have earned by the assessee by carrying on any separate business activity other than the tonnage tax business as envisaged in section 115VJ of the Act The said income was chargeable to tax in the hands of the assesses under the head income from other sources as rightly held by the authorities below and even the assesses itself had originally offered the said income under the head income from other sources . From the above observations of Hon'ble ITAT it is quite clear that appellant has claimed deduction fully knowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assesses. Further it is noted that the so-called mistake , which is being claimed now, was never admitted as such before Assessing Officer or CIT(A) or before Hon'ble ITAT. In fact as mentioned in the submissions it is still in appeal before Hon'ble Bombay High Court, Thus, the appellant is not admitting it to be a mistake which is contrary to its claim in the submissions made. Even otherwise, in the case of Cement Marketing Company of India Ltd. Vs Assistant Commissioner of Sales Tax Ors, 124 ITR 15, Hon'ble Supreme Court have held that even where the incorrectness of the return is claimed due to want of care on the part of the assessee and there is no reasonable explanation for such want of care, infer deliberateness and treat it as a false return. Similar observations were made by Hon'bfe Gujarat High Court in the case of A.M. Shah Co. Vs CIT (Guj) 238 ITR 415. This contention of the appellant is therefore rejected. viii. During the course of appellate proceedings it was noted that in paragraph 6 of the penalty order, the AO has discussed the issue of reduction of an amount of ₹ 12.10 crores being profit on sale of ships and ₹ 29 lakhs be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered opinion, this section does not apply to the factual situation. The assessee has contended that it does not carry on any other business and the entire income relates to income from business of operating qualifying ships. We have also held that the assessee does not have any separate activity which could result in income. There is no dispute that the income is assessable under the head Income From Other Sources . Interest is earned on parking of surplus funds. Allocation of expenditure as that which is necessary to earn the interest income to the tune of ₹ 7,83,88,809 is, in our opinion, is highly excessive and incorrect. Reliance on Rule-8D is also misplaced. The issue is, whether or not the claim falls under the ken of section 57(iii), which reads as follows:- 57(iii) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income. As the expenditure being claim by the assessee cannot be said to have been laid down or expended wholly and exclusively for the purpose of making or earning such income, we uphold the finding of the Revenue authorities in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome earned by the assessee is not falling either under the core activity or even under incidental activity as per the said definition. 10. After considering the rival submission and perusing the relevant material on record, we find no infirmity in the impugned order of the ld. CIT(A) confirming the disallowance made by the A.O. on account of assessee s claim for deduction from interest and dividend income on account of common costs attributable to the tonnage tax business as per section 115 VJ of the Act. As per the said provision, where tonnage tax company also carries on any business or activity other than the tonnage tax business, then common costs attributable to the tonnage tax business is required to be determined on a reasonable basis. In the present case, the income was earned by the assessee company on account of interest on fixed deposits made out of surplus funds and dividend income earned on investment made in the shares of other company and having regard to all the facts of the case, we are of the view that the same cannot be said to have earned by the assessee by carrying on any separate business activity other than the tonnage tax business as envisaged in secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced by the A.O. as well as the ld. CIT(A) from the turnover of core shipping while computing the excess of incidental shipping income:- (Amount in crores) Profit on sale of ships 12.10 Excess provision written back 23.94 Sundry receipts (core shipping) 11.11 Sundry credit balances written back 0.47 Profit on sale of fixed ships (non ship) 0.29 Reimbursement from managed vessels 25.61 Amount reduced from Turnover of core shipping 73.52 21. At the time of hearing before us, the ld. Representatives of both the sides have agreed that a similar issue was involved in assessee s own case for A.Y. 2007-08 and the Tribunal vide its order dtd. 29th July, 2011 has decided the same in respect of item No. 2 (excess provision written back) and item No. 4 sundry credit balances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er a particular income has to be brought to tax or not, cannot be based on such a view of the matter. The 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. 30. Coming to ground no.10, as already stated, the assessee has no other activity which would result in income. It also does not have any other business. Thus, the income is from core activity only. Nevertheless, the income in question is taxable under the head Capital Gains and does not fall within the ambit of sections 28 to 43C. Thus, the receipt cannot be considered as turnover in view of the provisions of section 115VA and conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other related assets should qualify as total turnover from core activity for the purposes of proviso to Section 115VI(1) of the Income Tax Act, 1961? 3. Registry is directed to communicate copy of this order to the Tribunal. This would enable the Tribunal to keep papers and proceedings relating to the present appeal available, to be produced when sought for by the Court. 4. Mr. Malhotra waives service. 5. To be heard along with Income Tax Appeal No. 2653 of 2011 It was submitted that assessee has adopted tonnage tax scheme for the first time for computing income in the AY 2005-06, as the scheme was introduced by Finance Act, 2004 w.e.f. 01.04.2005 by insertion of Chapter XX-G consisting of Section 115V to 115VZC. The assessee claimed that it bonafidely allocated administrative expenses against interest income and dividend income . It was submitted that profit on sale of ships as well on fixed assets were considered as part of core shipping activities under a bonafide belief. It was stated that all the issues were decided against the assessee concurrently by all the authorities in quantum assessments including tribunal who have taken consistent stand agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15VJ. It was submitted that AO had observed that the assessee furnished inaccurate particulars of income which led to the levying of penalty u/s. 271(1)(c) of the Act. Our attention was also drawn to page no. 24 of the paper book wherein computation of income is placed in which administrative expenses were claimed to the tune of aggregate of ₹ 6,36,11,310/- to be deducted from dividend income of ₹ 2.01 crores and interest income to the tune of ₹ 172.12 crores respectively . The assessee referred to page no. 25/paper book to contend that administrative expenses were also allocated against income from incidental activities and also against interest and dividend income. The assessee also referred to page no. 44 of the paper book /para 6 to contend that complete disclosures were made in the return of income filed in computation of income(page 24-25/pb) as well before the AO during assessment proceedings conducted u/s 143(3) read with Section 143(2) of the 1961 Act , vide submissions dated 30.09.2008 (page no. 24 to 29/pb) . Thus, it was submitted that it could not be said that the assessee concealed particulars of income or furnished inaccurate particulars of income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced in paper book / page no. 59 wherein Hon ble Bombay High Court admitted substantial question of law in ITA no. 1013 of 2015 dated 26.02.2018 pertaining to AY 2006-07 against the aforesaid decision of the tribunal . The assessee also relied upon the decision of Hon ble Bombay High Court in the case of CIT v. Nayan Builders and Developers reported in (2015) 56 taxmann.com 335(Bombay) and submitted that once substantial question of law is admitted by Hon ble Bombay High Court then no penalty is exigible because admission of appeal by Hon ble Bombay High Court on substantial question of law evidences that the issue is debatable, but on being confronted by the Bench , the Ld. Counsel for the assessee fairly submitted that this decision of Hon ble Bombay High Court in the case of Nayan Builders and Developers(supra) does not lead to laying down rule for universal application as was held by Hon ble Bombay High Court in the case of Pr. CIT v. Shree Gopal Housing and Plantation Corporation in ITA no. 701 of 2015 vide judgment dated 06-02.2018 , wherein Hon ble Bombay High Court held as under:- 4....... Therefore, each appeal in respect of the order deleting / imposing a penalty by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Hon ble Bombay High Court was pleased to admit substantial question of law arising from dismissal of appeal of the assessee by tribunal against quantum assessment framed by the AO. The assessee also relied upon decision of Pune Bench in the case of Kanbay Software India P. Ltd v. DCIT (2009)31 SOT 153(Pune). 6. The Ld. DR on the other hand relied upon appellate order passed by Ld.CIT(A) and it was submitted that the tribunal has rightly held that no administrative expenses can be deducted from income from interest and dividend income as provisions of Section 57(iii) are applicable and these expenses were not incurred wholly and exclusively for earning of interest income from deposits and dividend income from JV company based in Iran . It was submitted by learned DR that income from other sources by way of interest on deposits and dividend income cannot be considered to be an activity incidental to the core activity of shipping. It was also submitted that profit on sale of ships and other fixed assets cannot be considered to be core shipping activities. 7. We have carefully considered rival contentions and perused the material on record including relevant orders of the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of operating qualifying ships in the interim period but the same cannot be used for distribution by way of dividends or profits or for remittance outside India as profits or for the creation of any asset outside India as is contemplated u/s 115VT(3)(b). It is also undisputed that acquisition of a new ship is an highly capital intensive activity and requires huge financial outlay. Prior to introduction of Chapter XII-G in 1961 Act , the provision of Section 33AC of the 1961 Act held the field dealing with shipping companies which also stipulated creation of special reserves to be used for acquiring a new ship for the purposes of the business of the assessee within eight years. The dispute has arisen between the rival parties as to the interpretation of provisions of Chapter XII-G of the 1961 Act, wherein the assessee claimed administrative expenses to the tune of ₹ 6,36,13,110/- to be deducted from dividend income of ₹ 2.01 crores and interest income to the tune of ₹ 172.12 crores respectively. The said common costs are required to be deducted from any business or other activities other than the tonnage tax business as provided u/s 115VJ of the 1961 Act. The inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king of surplus funds. Allocation of expenditure as that which is necessary to earn the interest income to the tune of ₹ 7,83,88,809 is, in our opinion, is highly excessive and incorrect. Reliance on Rule-8D is also misplaced. The issue is, whether or not the claim falls under the ken of section 57(iii), which reads as follows:- 57(iii) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income. As the expenditure being claim by the assessee cannot be said to have been laid down or expended wholly and exclusively for the purpose of making or earning such income, we uphold the finding of the Revenue authorities in this regard. In our opinion, the Assessing Officer has rightly held that the assessee would not have incurred the expenditure claimed for earning income. The estimation of ₹ 1,00,000 by the Assessing Officer, in our opinion, is reasonable. Coming to reliance placed by the learned Sr. Counsel, on the decision of Hon'ble Jurisdictional High Court Chinai And Co. Pvt. Ltd. (supra), we are of the opinion that these are factual matters and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to the tonnage tax business as per section 115 VJ of the Act. As per the said provision, where tonnage tax company also carries on any business or activity other than the tonnage tax business, then common costs attributable to the tonnage tax business is required to be determined on a reasonable basis. In the present case, the income was earned by the assessee company on account of interest on fixed deposits made out of surplus funds and dividend income earned on investment made in the shares of other company and having regard to all the facts of the case, we are of the view that the same cannot be said to have earned by the assessee by carrying on any separate business activity other than the tonnage tax business as envisaged in section 115 VJ of the Act. The said income was chargeable to tax in the hands of the assessee under the head income from other sources as rightly held by the authorities below and even the assessee itself had originally offered the said income under the head income from other sources . As regards the decision of Hon ble Bombay High Court in the case of Punit Commercial Ltd. (supra) cited by the ld. Counsel for the assessee, it is observed that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to the same and material to computation of income have been disclosed, then the assessee is out of clutches of penalty provisions as are contained u/s 271(1)(c) of the 1961 Act. The claim of the assessee is that these income from interest on deposits as well dividend income are business incomes incidental to the income from shipping although offered to tax under the head income from other sources and deduction u/s 57(iii) of the expenses towards administrative expenses being common costs is to be allowed which stood rejected by all the authorities concurrently including Mumbai-tribunal. The investments on which dividend income arose is in the Iranian JV company engaged in shipping business namely Irono Hind Shipping Company Limited based in Tehran, Iran. The claim of the assessee albeit rejected by all the authorities concurrently in quantum assessment proceedings keeping in view special scheme concerning shipping companies as is contained in Chapter XII-G of the 1961 Act , was not however without any basis and cannot be said to be malicious or non bonafide claim. This is also not the claim and the case of the Revenue that the said administrative expenses claimed to be set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of this new regime for taxation of shipping companies. The interpretation of various clauses of this new scheme relating to income of shipping companies did not stood the scrutiny of courts by the time the assessee filed its return of income for relevant AY i.e. 2006-07 as this scheme of taxation was new introduced by Finance Act, 2004 wef 01.04.2005 . The assessee presented its claim by interpreting the special provisions relating to shipping companies under Chapter XII-G in the manner that the interest income from deposits and dividend income from investments in shipping company were considered to be other/incidental activity to the core shipping activity as contemplated u/s 115VJ as the assessee was under a bonafide belief that deposits on which interest arose are being made have origin to special tonnage tax reserve created as is statutorily mandated u/s 115VT which needed to be compulsorily created u/s 115VT which can be used only for acquiring a new ship within 8 years as contemplated u/s 115VT(3)(a) and thus consequently have business nexus with shipping activities. The dividend income also arose from investment in an Iranian JV company engaged in shipping business nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in ITA no 1013 of 2015 vide orders dated 20.02.2018 for the impugned assessment year was pleased to admit substantial question of law arisen from the aforesaid appeal decided by Mumbai-tribunal against the assessee for the impugned assessment year. This is also a strong indicative of the fact that the issue s under consideration being debatable in nature. The decision of Hon ble Bombay High Court decision in the case of Nayan Builder and Developer(supra) stood explained in the later decision of Hon ble Bombay High Court in the case of Pr. CIT v. Shree Gopal Housing and Plantation Corporation in ITA no. 701 of 2015 vide judgment dated 06-02.2018 , wherein Hon ble Bombay High Court held as under:- 4....... Therefore, each appeal in respect of the order deleting / imposing a penalty by the Tribunal would have to be considered in relation to the facts arising therein and also in the quantum proceedings. It cannot be said as a matter of rule that in case where this Court admits an appeal relating to quantum proceedings ipso facto i.e. without anything more, the penalty order get vitiated. Thus, the question of entertaining an appeal from an order imposing / deleting penalty wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Act CIT (A) has erred in confirming the A.O. s action of re-adjusting the turnover by reducing ₹ 73.52 crores from core shipping . 20. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that the following items of income were reduced by the A.O. as well as the ld. CIT(A) from the turnover of core shipping while computing the excess of incidental shipping income:- (Amount in crores) Profit on sale of ships 12.10 Excess provision written back 23.94 Sundry receipts (core shipping) 11.11 Sundry credit balances written back 0.47 Profit on sale of fixed ships (non ship) 0.29 Reimbursement from managed vessels 25.61 Amount reduced from Turnover of core shipping 73.52 21. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as non-business income. The Assessing Officer as well as the Commissioner (Appeals) seem to have been influenced by the fact that the assessee has an income of ₹ 800 crores in its Profit Loss account and whereas he has offered only ₹ 18 crores to tax under the tonnage tax scheme. The decision whether a particular income has to be brought to tax or not, cannot be based on such a view of the matter. The 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. 30. Coming to ground no.10, as already stated, the assessee has no other activity which would result in income. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terpretation of various clauses of this new scheme relating to income of shipping companies did not stood the scrutiny of courts by the time the assessee filed its return of income for relevant AY i.e. 2006-07 as this scheme of taxation was new introduced by Finance Act, 2004 wef 01.04.2005 . The assessee presented its claim by interpreting the special provisions relating to shipping companies under Chapter XII-G in the manner that the income arising from sale of ships and fixed assets form part of core shipping business activities. The belief of the assessee that income from profit on sale of ships and other fixed asset was from core shipping business albeit rejected by all the authorities in context of special provisions as are contained in Chapter XII-G is not without basis as majorily activities of the assessee are solely from shipping business. The aforesaid claim of the assessee in treating the said income by way of profit from sale of ships and fixed assets to be from core shipping business cannot be called as an ex-facie illegal claim albeit the same was not accepted by all the authorities concurrently including the tribunal nor it is the case of the Revenue that bogus/sham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the explanation offered by the assessee was an ex-facie illegal or was completely a bogus/sham claim of deduction set up by the assessee with an intent to defraud Revenue. It is another matter that the claim as set up by the assessee was rejected by all the authorities including Mumbai-tribunal. The Hon ble Bombay High Court in assessee s own case for the impugned assessment year in ITA no 1013 of 2015 vide orders dated 20.02.2018 has admitted substantial question of law arisen from the appeal decided by the tribunal which was decided against the assessee. This is also a strong indicative of the fact that the issue s being debatable in nature. The decision of Hon ble Bombay High Court decision in the case of Nayan Builder and Developer(supra) stood explained in the later decision of Hon ble Bombay High Court in the case of Pr. CIT v. Shree Gopal Housing and Plantation Corporation in ITA no. 701 of 2015 vide judgment dated 06-02.2018 , wherein Hon ble Bombay High Court held as under:- 4 ....... Therefore, each appeal in respect of the order deleting / imposing a penalty by the Tribunal would have to be considered in relation to the facts arising therein and also in the quantum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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