Apportionment of freight: tax should be levied only on the freight actually earned by each vessel under section 172. Under section 172 the deemed income of non resident shipowners is assessed at a prescribed rate on freight received in India and contains no provision for deducting payments to feeder ships; therefore such payments cannot be allowed as deductions absent legislative change. Alternatively, treating the issue as one of apportionment yields that each vessel should be taxed only on the portion of freight it actually earns for its segment, and the Board may direct Assessing Officers to levy tax accordingly to avoid double taxation.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Apportionment of freight: tax should be levied only on the freight actually earned by each vessel under section 172.
Under section 172 the deemed income of non resident shipowners is assessed at a prescribed rate on freight received in India and contains no provision for deducting payments to feeder ships; therefore such payments cannot be allowed as deductions absent legislative change. Alternatively, treating the issue as one of apportionment yields that each vessel should be taxed only on the portion of freight it actually earns for its segment, and the Board may direct Assessing Officers to levy tax accordingly to avoid double taxation.
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