TaxTMI 
TaxTMI 
2024 (8) TMI 348
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....Income tax(Appeals)-III, Hyd. in ITA No.0540/W-2(2)/ CIT(A)-III/20 11-12 dt. 28-8-2014 to the extent to which the claims of the appellant are not allowed is contrary to law and facts. 2 It is contended that the disallowance of Rs. 65,04,578 being pro-rata premium on Foreign Currency Convertible Bonds (FCCB) is erroneous and arbitrary. In the facts and circumstances of the case, the entire premium is allowable as expenditure as FCCB's were issued for obtaining finance for general purposes of the entire appellant's business and the proceeds were used for all the business activities. 3. In any event it cannot be said that the premium on 6.19 crores utilized for acquisition of shipping assets is disallowable under any of the provisi....
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.... loss, Rs. 30,09,100/- towards expenditure as per provisions of Section 14A of the Act and Rs. 9,88,343/- towards excess depreciation on UPS and passed assessment order u/s 143(3) of the Act dt.30.12.2011 reducing the loss to Rs. 1,57,77,520/-. 4. Feeling aggrieved by the assessment order, assessee carried the matter before the ld.CIT(A), who granted part relief to the assessee. 5. Feeling aggrieved with the order of ld.CIT(A), assessee is now in appeal before us. 6. Before us, ld.AR submitted that in respect to ground no.2 first ground, it is the contention of the Assessing Officer that the Assessing Officer had disallowed the expenditure claimed by the assessee to the extent of Rs. 65,04,578/- as the assessee has opted for Tonnage Tax ....
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....ce of proportionate premium. It is not the case of appellant that the assets of the shipping business amounting to Rs. 6.19 crores or any portion thereof is acquired not out of the borrowed funds but were acquired out of its own funds without any cost of borrowing. Hence, the disallowance made of the proportionate amount of Rs. 65,04,518/- is justified. The decision of the Assessing Officer on this ground is hence upheld." 8. Now the contention of the assessee before us are two folds that the assessee was having surplus fund and therefore, the investment made by the assessee for acquisition of vessels is not assessable to the funds taken by the assessee under FCCD. Secondly, it was submitted that during the financial year 2007-08, the part....
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....he assessees." 9. Per contra, ld. DR has submitted that the assessee has settled the issue arising in the appeal of the Revenue under Vivad se Vishwas Scheme and the issue under consideration is same as that of ground no.3 raised by the Revenue before the Tribunal which was subsequently settled under Vivad se Vishwas Scheme. 10. On merit, it was submitted that once the assessee has opted for the Tonnage Tax Scheme as applicable for section 115VG(6) of the Act, then no deduction, then no deduction is allowable. The ld. DR had drawn our attention to the provisions of Section 115 VG of the Income Tax Act, 191, which provides as under : "Computation of tonnage income. 115VG. (1) The tonnage income of a tonnage tax company for a previous y....
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....ement of purchase of slots, slot charter and an arrangement of sharing of break-bulk vessel. (5) The tonnage shall be rounded off to the nearest multiple of hundred tons and for this purpose any tonnage consisting of kilograms shall be ignored and thereafter if such tonnage is not a multiple of hundred, then, if the last figure in that amount is fifty tons or more, the tonnage shall be increased to the next higher tonnage which is a multiple of hundred and if the last figure is less than fifty tons, the tonnage shall be reduced to the next lower tonnage which is a multiple of hundred; and the tonnage so rounded off shall be the tonnage of the ship for the purposes of this section. (6) Notwithstanding anything contained in any other prov....
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.... The argument of the assessee is that the assessee was having free funds is devoid of any merit, as it was not a case before the ld.CIT(A) that the investments were made out of free funds available within it on account of liquidation of the part of the FCCD Bonds. Further, once the specific provision which prohibits the assessee from claiming any deduction, then the question of allowing the deduction of interest on the pretext of availability of mixed funds does not arise. In so far as the case laws relied upon by the assessee, those case laws are not applicable to the present case, as they are on different facts. In light of the above, the ground Nos.2 and 3 raised by the assessee are dismissed. 12. With respect to ground no.4, the ld. AR....