TMI Blog2020 (3) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... le computing Book Profits u/s 115JB would not be arise. Revised statement of income - claiming that INCOME FROM HOUSE PROPERTY on account of rent received from Managing Director should be considered as shipping business income and cannot be taxed separately as Income from House Property u/s.22 - interest income includes tax free income - interest on certain Bank fixed deposits should be considered as business income - interest on staff loan and interest on delayed payment should be considered as business income - bad debts recovered should be considered as business income - sale of old magazines should be considered as business income - assessee is seeking exclusion of all the above stated items while computing book profits u/s 115JB - HELD THAT:- Lower authorities refused to admit the assessee s revised computation of income in terms of ratio of Hon ble Apex Court rendered in Goetz India Ltd. V/s CIT [ 2006 (3) TMI 75 - SUPREME COURT] which mandate the assessee to claim deduction by filing a revised return only. No findings on merits have been rendered by lower authorities on any of these issues. It is settled law that there is no bar on the appellate authorities to enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Page 592 Para 7 last 8 lines) and the judgement of jurisdictional ITAT is binding on lower authorities till the judgement is overruled by higher authorities, and, not following the same, amounts to CONTEMPT OF THE HON'BLE ITAT. 3. The Learned CIT(A) has erred in making addition of ₹ 97,26,004/- applying provisions of Section 14A overlooking that no expense has been claimed as a deduction while computing Taxable Income under any heads of Income and therefore when no expense has been claimed as deduction under any heads of Income, the question of disallowing the expenses u/s.14A does not arise. 4. The Learned CIT(A) erred in not following the judgement of Hon'ble MUMBAI ITAT in the case of TAG OFFSHORE LTD. VS. ASST. CIT (2014) 49 TAXMANN.COM 209 wherein it is held that ''no disallowance under section 14A is warranted in his case when the assessee has admittedly not claimed any expenditure, towards taxable income i.e. it has not claimed any deduction of expenditure debited in the Profit Loss account while computing the total income (Page 7 Para 13 last 5 lines) and the judgement of jurisdictional ITAT is binding on lower authorities till the judgeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame cannot should not have been included while computing disallowance of expenditure @ 0.5% of the average cost of investment under Rule 8D (Ref: Mumbai ITAT in the case of J.M. Financial Ltd. ITA No. 4521/Mumbai/2012 dated 26.3.2014). 9. The Learned CIT(A) erred in confirming addition of ₹ 97,26,0047- being disallowance u/s.14A while computing Book Profit u/s.115JB. 10. The Learned CIT(A) has erred in not considering the claim of the Appellant in the revised statement of income filed vide letter dated 23.2.2015 claiming that INCOME FROM HOUSE PROPERTY of ₹ 1,66,400/- on account of rent received from Managing Director should be considered as shipping business income and cannot be taxed separately as Income from House Property u/s.22 of the Act. 11. The Learned CIT(A) has erred in not considering the claim of the Appellant in the revised statement of income vide letter dated 23.2.2015 that interest received on INCOMETAX REFUND u/s.244A amounting to ₹ 2,26,98,013/- for A.Y.2008-09 allowed vide Intimation Order dated 17.3.2010 passed u/s. 143(1) and rectification Order u/s.154 dated 10.5.2010 which were later withdrawn vide Assessment Order dated 31.1.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OLANI BULK CARRIERS LTD., the Company whose shipping division is merged with the Assessee Company) is business income and the same cannot be included as taxable income under Income from Other Sources. 17. The Learned CIT(A) has erred in not considering the claim of the Appellant in the revised statement of total income that letter dated 23.2.2015 that bad debt of ₹ 34,73,324/- written off in earlier years as business expenditure which is received during the Assessment Year 2011-12 under consideration is shipping business income and the same cannot be included as taxable income under Income from Other Sources. 18. The Learned CIT(A) has erred in not considering the claim of the Appellant in the revised statement of total income that letter dated 23.2.2015 that the amount received on account of sale of Old Magazines and Old Newspapers amounting to ₹ 2,377/- is business income and the same cannot be included as taxable income under Income from Other Sources. 1.3 The assessee, vide letter dated 03/10/2019 has filed additional ground of appeal and pleaded for admission of the same in terms of decision of Hon'ble Supreme Court in National Thermal Power Corporati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , placed on record the decision of this Tribunal in assessee s case for AYs 2003-04, 2005-06 to 2010-11, ITA Nos.2582/Mum/2010 ors., common order dated 28/02/2019 to submit that substantial issues have already been adjudicated by the Tribunal and therefore, same view may be taken in the matter. We have carefully perused the same. Our adjudication to the subject matter of cross-appeals would be as given in succeeding paragraphs. 2.1 Briefly stated, the assessee being resident corporate assessee stated to be engaged in shipping business was assessed for year under consideration u/s 143(3) on 23/03/2015 wherein the income of the assessee was determined at ₹ 821.19 Lacs after sole disallowance u/s 14A for ₹ 206.94 Lacs as against returned income of ₹ 614.25 Lacs filed by the assessee on 30/11/2011. The said disallowance u/s. 14A was added back while computing Book Profits u/s. 115JB also. The assessment order records a finding that there was no material change in the business of the assessee as compared to earlier years. The assessee has exercised option for Tonnage Tax Scheme in accordance with provisions of Sec. 115VP(1) with effect from AY 2005-06. 2.2 Du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1336.71 Lacs held by the assessee and therefore, interest disallowance u/r 8D(2)(ii) was not justified. However, disallowance u/r 8D(2)(iii) was confirmed. 3.3 Regarding assessee s plea that income from house property and income from other sources was to be considered as business income, the same was also rejected by observing that such claims could not be entertained except by way of revising return of income. 3.4 The aforesaid adjudication by Ld. CIT(A) has given rise to crossappeals before us. 3.5 We have carefully perused the material on record and carefully considered the arguments advanced by both the representatives. 4. So far as the disallowance u/s 14A is concerned, we find that this issue has already been adjudicated by the Tribunal in assessee s own case for various years vide ITA Nos.2582/Mum/2010 ors., common order dated 28/02/2019. The co-ordinate bench, relying upon the decisions of this Tribunal in Varun Shipping Co. Ltd.(17 ITR-Trib. 587), Tag Offshore Ltd. (49 Taxmann.com 209), Raj Shipping Agencies Ltd. (38 Taxmann.com 345), at para 4.5 of the order, held that once the department has allowed the option to the assessee under Clause (i) of sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicate the same in the light of the submissions made by the assessee that the aforesaid items would constitute business income for the assessee and secondly, these arises out of shipping business being carried out by the assessee. These grounds stand allowed for statistical purposes. 6. The revenue s appeal stands dismissed whereas the assessee s appeal stands partly allowed. Cross-Appeals for AY 2012-13 7. Facts are pari-materia the same in this year. The assessment was similarly framed u/s 143(3) on 23/03/2015 wherein the assessee was saddled with disallowance u/s 14A for ₹ 141.89 Lacs. The Ld. CIT(A) deleted interest disallowance but confirmed expense disallowance. The revised return filed by the assessee was ignored on the same reasoning. Aggrieved, the assessee as well as revenue is in further appeal before us. 8. Facts and circumstances being identical, our adjudication as for AY 2011-12 shall mutatis mutandis apply to this year also. Accordingly, the revenue s appeal stands dismissed. Ground Nos. 1 to 6 9 of assessee s appeal stand allowed which makes alternative ground nos.7 8 infructuous. Since this is the only ground of revenue s appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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