TaxTMI 
TaxTMI 
2015 (2) TMI 16
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....Income Tax Act, 1961; the "Act", for short? In other words, is the income derived from `slot charter' operations of a `tonnage tax company' liable to be excluded while determining the `tonnage income' under the `tonnage tax scheme' if such operations are carried on in ships which are not `qualifying ships' in terms of the provisions of that Chapter of the Act and the relevant provisions of the Income Tax Rules, 1962; for short, the "Rules"? 2. Afore-noted is the substantial question of law arising for decision in these appeals. It is formulated on the basis of the submissions of the learned Senior Advocates for the assessee and the revenue whom we have heard focusing on that question of law. 3. The fact that the appell....
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....ily stated, the question is as to whether the appellant is eligible to include the income derived from activities through `slot charter' arrangements, as relevant shipping income, to determine the deemed tonnage in terms of Rule 11Q of the Rules, to compute the tonnage income in terms of Section 115VG of the Act, without such `slot charter' arrangements being carried on through `qualifying ships' as defined in the Act. 5. Making reference to the different provisions contained in Chapter XII G of the Act and the relevant rules and forms in the Rules, the learned senior counsel appearing for the appellant argued that the provisions clearly show that the deemed tonnage computation for slot charters is to be separately computed, in....
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....nd the Tribunal cannot impose limitations or conditions which are not found therein. Bajaj Tempo Ltd. v. Commissioner of Income-tax [196 ITR 188 (SC)] is referred to, to point out that taxing statutes providing incentives for growth and development are to be construed liberally and in a way so as to advance the objective and not frustrate it. 6. The learned senior counsel for the department submitted that it is relevant to note the suo motu revisional order of the Commissioner on the basis of which the fresh assessment orders were issued. The argument is that without any variation being brought to that order of the Commissioner, the findings and interpretation of the provisions by the Commissioner are binding on the officer who passed the ....
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.....4.2005. 'Tonnage tax scheme' is defined in clause (m) of Section 115V to mean a scheme for computation of profits and gains of business of operating qualifying ships under the provisions of Chapter XII G. Section 115V(j) defines 'tonnage income' to mean the income of the tonnage tax company computed in accordance with the provisions of that Chapter and 'tonnage tax company' is a qualifying company in relation to which tonnage tax option is in force - Section 115V(l). The appellant is a qualifying company and is a tonnage tax company. Section 115VE prescribes the manner of computation of income under tonnage tax scheme. Computation of tonnage income is governed by Section 115VG. Sub- section 4 of that Section says th....
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....ii) of Section 115VW shall be in Form No.66. At Sl.No.10 of that form is the format in which details have to be provided for computation of tonnage income under Section 115VG. Column No.1 of that format is "name of qualifying ship". It stands with an asterisk that would take us to the foot of the form, just above the Declaration, explaining that "there is no need to mention the name of the ship, income from which is computed on deemed tonnage basis." 8. Reverting to Sections 115VB, 115VC and 115VD, it can be seen that while it is necessary to own at least one qualifying ship for a company to be a qualifying company, operating ships may be either owned or chartered by the company and include slot charter, space charter or joint charter. The....
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....oading containers on their own container vessels, shipping companies also hire slots on container ships (not owned by them) plying on various routes. These slots could be hired for a sector voyage or on long term basis, all round the year, in various vessels and in varying numbers and thus cannot be converted to net tonnage identifying the particular vessel on which the slot is hired. Thus, a formula has been worked out to convert the slots hired into net tonnage. (See the worksheet appearing after this note)." The worksheet is illustrative of the indisputable conclusion that as per the Act and Rules, the slots hired are converted into net tonnage. This is enjoined by providing a formula since slots are hired for a sector voyage or on long....