TaxTMI 
TaxTMI 
2017 (10) TMI 1604
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....a total income of Rs..98,49,253/-. The return filed by the assessee was selected for scrutiny and notice under section 143(2) of the Income Tax Act, 1961 ["Act" in short] was issued on 07.08.2013 and served. Notice under section 142(1) of the Act was also issued. After considering the details filed by the assessee and also considering the submissions of the assessee, the Assessing Officer has completed the assessment under section 143(3) of the Act on 25.3.2015 determining the total income of the assessee at Rs..7,83,25,328/- under normal provisions and Rs..2,66,27,220/- under section 115JB of the Act by making various disallowances. 3. The assessee carried the matter in appeal before the ld. CIT(A) challenging the disqualification of Tonnage Tax Scheme under section 115VP(3) of the Act. After considering the submissions of the assessee, as well as, by following the decision of the Tribunal in assessee's own case for earlier assessment years, the ld. CIT(A) allowed the appeal of the assessee. 4. Aggrieved, the Revenue is in appeal before the Tribunal and challenged that the assessee is not eligible for tonnage tax claim. 5. At the time of hearing, the ld. Counsel for....
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....re to adopt a different view. Accordingly, the CIT(A)'s findings are affirmed and the appeal I.T.A. No. 2145/Mds/2013 is dismissed." 7. Respectfully following the above decision of the Coordinate Bench of the Tribunal, while upholding the findings of the ld. CIT(A), we dismiss the appeal filed by the Revenue. I.T.A. No. 3196/Mds/2016 8. The only effective ground raised in the appeal of the Revenue is that the ld. CIT(A) has erred in directing the Assessing Officer to grant renewal of tonnage tax under section 115VR of the Act. 8.1 The assessee has filed an application dated 15.12.2014 for renewal of tonnage tax in Form No. 65 under section 115VR(1) of the Act. The details of the activities undertaken by the ship for which the application for renewal made was called on and by considering the submissions of the assessee, the Assessing Officer observed from the application of the assessee that the assessee was only 20% of owner of the ship called "MV Gem of Ennore" as per column 7 of the Annexure to the application. Accordingly, the assessee was required to clarify as to how the assessee company satisfies the conditions laid down under section 115VC of the Act. After consi....
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....ve order, the ld. Counsel for the assessee has further pointed out that it satisfies the conditions required as per section 115VA of the Act in order to come within the ambit of tonnage tax scheme. We have perused the order of the Tribunal dated 13.05.2011 in the assessee's own case for the assessment year 2005-06, wherein the Tribunal has observed and held as under: "6. We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. In the instant case the undisputed facts are that the assessee is a co-owner of a ship, owning 20% of the ownership. The assessee opted for tonnage tax scheme and accordingly made application before the Additional Commissioner of Income Tax having jurisdiction over the assessee company. The Additional Commissioner of Income Tax passed an order dated 28.01.2005 in writing approving the option for tonnage scheme as applied by the assessee company. The Learned Assessing Officer thereafter completed the assessment u/s.143(3) assessing the total income on the basis of tonnage tax scheme as provided in Chapter -XIIG of the Act. The Learned Commissioner of Income Tax thereafter set aside the ....
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....5VE states that where a company is engaged in the business of operating qualifying ships is not covered under the tonnage tax scheme or has not made an option to that effect, the profits of such company shall be computed in accordance with other provisions of the Act. This makes it clear that the option for the scheme and actually being covered under the tonnage tax scheme are cumulative conditions. Even if the option is exercised and approved by the Additional CIT, Learned Assessing Officer may examine whether the other condition of being covered under the scheme has been fulfilled. I am therefore of the view that CIT under section 263 is not precluded from revising the assessment made by the Learned Assessing Officer applying the benefit of tonnage tax scheme to the assessee merely for the reason that approval for exercise of option under section 115VP has been given by the Additional CIT. On the merits of the case, it is seen that the assessing officer has not considered the issue whether a part ownership of a ship could be considered as 'owning at least one qualifying ship' (emphasis supplied) under clause (c) of section 115VC. Secondly the Learned Ass....
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....r, a ship is a qualifying ship if- (a) it is a sea going ship or vessel of fifteen net tonnage or more ; (b) it is a ship registered under the Merchant Shipping Act, 1958 (44 of 1958), or a ship registered outside India in respect of which a licence has been issued by the Director- General of Shipping under section 406 or section 407 of the Merchant Shipping Act, 1958 (44 of 1958) ; and (c) a valid certificate in respect of such ship indicating its net tonnage is in force, but does not include- (i) a seagoing ship or vessel if the main purpose for which it is used is the provision of goods or services of a kind normally provided on land ; (ii) fishing vessels ; (iii) factory ships ; (iv) pleasure crafts ; (v) harbour and river ferries ; (vi) offshore installations ; (vii) dredgers ; (viii) a qualifying ship which is used as a fishing vessel for a period of more than thirty days during a previous year. 115VP. Method and time of opting for tonnage tax scheme.--(1) A qualifying company may opt for the tonnage tax scheme by making an application to the Joint Commissioner ha....
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....t should fully own a qualifying ship and on partly owning a qualifying ship the assessee will not be a qualifying company. 10. Still further we find that as per provision of Sec.115VA in the case of the company the income from the business of operating qualifying ship at the option of such company shall be computed as per tonnage tax scheme. Nowhere this section provides that such company should be a qualifying company. 10. We find that it is not in dispute that the assessee company opted for tonnage tax scheme which option was duly approved by Additional Commissioner of Income Tax vide his order dated 28.01.2005 passed u/s.115VP(3) of the Act. Further it is also not in dispute that the said order of the Additional Commissioner of Income Tax is still in force and the same has not been set aside by any higher authority. In the impugned order also, the Learned Commissioner of Income Tax has considered the said order of the Additional Commissioner of Income Tax and has not set aside that order and has observed in regard to that order that:- "The order has to be passed by the Additional Commissioner within 30 days of the application. It was intended to be a p....
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....year or not . In our considered opinion, provision of Sec.263 cannot be resorted for making a roving or fishing enquiry without bringing on record some material to show that the assessment order as passed by the Learned Assessing Officer was erroneous as well as prejudicial to the interest of the Revenue. 14. The only other ground for treating the assessment order as erroneous and prejudicial to the interest of the Revenue by the Learned Commissioner of Income Tax was that in his opinion the Learned Assessing Officer has not considered that whether the transportation of goods between two ports situated within India falls within clause (1) of Section 115VD or not. In this respect, the Learned Commissioner of Income Tax himself further observed in the impugned order that the view adopted by the Learned Assessing Officer in the assessment order is a debatable issue. However in his opinion Learned Commissioner of Income Tax is not precluded from passing an order u/s.263 in respect of disputable issue. We find that similar issue came before this Tribunal in the case of The Additional Commissioner of Income Tax Co. Circle II(3),Chennai Vs. M/s.West Asia Martitime Ltd. in ITA No.....