TMI Blog2016 (8) TMI 1442X X X X Extracts X X X X X X X X Extracts X X X X ..... n 115VA is unique in the sense that it deals with the computation of income from the business of operating qualifying ships which opt for Tonnage Tax Scheme(TTS).The method of computation of income under the scheme as provided by the section stipulates that income has to be assessed in a particular manner. In other words no expenditure can be allowed or disallowance can be made while computing the income under TTS. The income of the assessee is computed at a fixed rate and all other provisions of the Act are not to be applied once an assessee opts for the scheme. In short if the assessee cannot claim any expenditure after opting out of the scheme then the AO is also barred by making any disallowance for incurring of expenditure. Legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jendra, Challenging the order dated 01/09/2014, of the CIT ( A) 39, Mumbai the assessee has filed present appeal. Assessee -company, engaged in the business of shipping and logistics business filed its return of income on 29/09/2011 admitting total income of ₹ 69.60 lakhs. The Assessing Officer (AO) completed the assessment, u/s.143(3)of the Act, on 31/01/2014, determining the income of the assessee at ₹ 1,47,78,690/-. 2.Effective ground of appeal is about deleting the addition made by the AO u/s.14A r.w.r. 8 of the Income Tax Rules, 1962 (Rules), amounting to ₹ 78.18 lakhs. During the assessment proceedings the AO found that assessee had earned dividend income of ₹ 1,42,29,145/-,that it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainly for acquisition of the vessels that part of the investment was utilised for the purpose of business operations and for investment in fresh shares, that the closing balance of investment in mutual funds in share capital was ₹ 1,506.53 crores that the AO had erred in making disallowance u/s.14 A especially ignoring the fact that the shipping related income was taxable under the present a provisions of section 115 VG of the Act. After considering submissions of the assessee the FAA held that as per the provisions of section 115 VG presumptive tax was leviable on the basis of vessel tonnage that no expenses including interest expenses, were being claimed or allowed that the condition precedent for invoking section 14A was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the AO had made disallowance under section 14A, that the assessee had not claimed any expenditure against the income arising out of non-shipping business that it had opted for TTS for the shipping business that it had sufficient own funds to make investments. So, we are of the opinion that disallowance made by the AO was not justifiable. If no expenditure was claimed against the exempt income arising out of non-shipping business the basic ingredient for invoking the provisions of section 14A was absent. Now we would like to discuss the TTS. Section 115VA of the Act is unique in the sense that it deals with the computation of income from the business of operating qualifying ships which opt for Tonnage Tax Scheme(TTS).The me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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