Fractional ownership does not bar tonnage tax benefit where statutory conditions are met and income share is definite and ascertainable.
Fractional ownership of a qualifying ship does not, by itself, disqualify an assessee from the tonnage tax regime where the statutory conditions under Chapter XII-G are satisfied and the assessee's share in the ship and income is definite and ascertainable. The provision governing joint operation of a qualifying ship recognises allocation of tonnage income according to each co-owner's share, and the existence of operational arrangements with another entity does not negate eligibility. On that basis, the assessee was entitled to tonnage tax benefit, and the Revenue's challenge failed.
Issues: Whether the assessee was entitled to claim tonnage tax benefit in respect of the ship owned and operated with other co-owners, notwithstanding fractional ownership and the allegation that another entity operated the ship.
Analysis: The assessee had obtained approval for the tonnage tax regime and the controversy centered on whether fractional ownership, by itself, disqualified the assessee from the benefit. The earlier decisions in the assessee's own case had already held that the ship was a qualifying ship and that the statutory conditions under Chapter XII-G were satisfied. The provision governing joint operation of a qualifying ship recognises allocation of tonnage income according to each company's definite and ascertainable share, and the fact that operational arrangements existed with a co-owner did not negate eligibility for the scheme.
Conclusion: The assessee was entitled to the tonnage tax benefit, and the Revenue's challenge to the grant of that benefit failed.
Final Conclusion: The orders allowing tonnage tax treatment were sustained and the Revenue's appeals were rejected.
Ratio Decidendi: A fractional owner of a qualifying ship is not excluded from the tonnage tax regime where the statutory conditions are satisfied and the assessee's share in the ship and income is definite and ascertainable.
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