TaxTMI 
TaxTMI 
2020 (3) TMI 605
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....ax Scheme where Shipping Business Income is computed on the basis of deemed income under Chapter XIIG and no expense has been claimed nor allowed while computing TONNAGE TAX INCOME as BUSINESS INCOME of shipping business. 2. The Learned CIT(A) erred in not following the judgement of Hon'ble MUMBAI ITAT in the case of VARUN SHIPPING CO. LTD. VS. ADDL. CIT (2012) 17 ITR (TRIB.) 587 MUMBAI 'F' BENCH wherein it is held that "if at all the Assessee has claimed any such expenditure in computation of profit of business of shipping the same are to be taken as disallowed when the income of the said business is finally computed in accordance with the provisions of Chapter XII-G and no separate disallowance on account of such expenditure u/s 14A can be made " (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 Rs. 97,26,004/- applying provisions of Section 14A overlooking that no expense has been claimed as a deduction while computing Taxable Income ....
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....ce u/s.14A. (Ref: Hon'ble Mumbai ITAT judgement in the case of Manugraph India Ltd. vs. DCIT (ITA No.4761/Mum / 2013 dated 25.3.2015 and Delhi High Court in the case of ACB India Pvt. Ltd. vs. ACIT, ITA 615/2014 dated 24.3.2015 have held that while computing the ''average value of investment" for the purpose of for Section 14A & Rule 8D(2)(iii), only investments yielding non-taxable income have to be considered and not all investments). 8. ALTERNATIVELY, without prejudice, the Learned CIT(A) erred in considering investment in shares of SUBSIDIARY companies amounting to Rs. 25,85,83,446/-which made by the Appellant as strategic investments and accordingly no expenditure was incurred for the same and therefore the same 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 Rs. 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....
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.... from Other Sources. 15. The Learned CIT(A) has erred in not considering the claim of the Appellant in the revised statement of total income vide letter dated 23.2.2015 that interest of Rs. 3,68,234/- on account of loans advanced to staff for purchase of house as business income as held by Hon'ble Mumbai ITAT in the case of Shipping Corp. of India vs. Addl. CIT (2012) 20 ITR (Trib.) 332 (Para 10 Page 338 & Para 32 and 33 of Page 349). 16. The Learned CIT(A) has erred in not considering the claim of the Appellant in the revised statement of total income vide letter dated 23.2.2015 that interest of Rs. 55,29,200/- (on account of delayed payment by M/s. SURYA PAPER UDYOG to TOLANI 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 Rs. 34,73,324/- written off in earlier years as business expenditure which is received during the Assessment Year 2011-12 under consideration i....
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.... subject matter of revenue's appeal is disallowance u/s 14A. 1.5 The Ld. Authorized Representative for Assessee (AR), at the outset, 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 Rs. 821.19 Lacs after sole disallowance u/s 14A for Rs. 206.94 Lacs as against returned income of Rs. 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....
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....noted that own funds of Rs. 4115.09 Lacs far exceeded investments of Rs. 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 a....