TaxTMI 
TaxTMI 
2025 (7) TMI 430
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....he Income Tax Act, 1961 (in short the 'Act'). 3. Briefly stated, assessee is a resident corporate entity and is a subsidiary of Samson Maritime Ltd. (in short 'SML') another Indian Company. As stated, the assessee is involved in the business of providing diving services for marine offshore activities etc. and such services are generally provided to oil companies. Though, the assessee has employed experienced and qualified diving team & Tanker Seamen, however, it does not have sea going vessels hence takes them on charter hire basis from its holding company SML. For the assessment year under dispute, assessee filed its return of income on 28.09.2012, declaring income of Rs. 3,69,93,535/-. Assessment in case of the assessee was completed u/s. 143(3) of the Act vide order dated 13.03.2015. Subsequently, a search and seizure operation u/s. 132 of the Act was carried out on the assessee on 23.11.2017. Consequent upon search action, proceedings u/s. 153A of the Act were initiated for preceding assessment years including the impugned assessment years. The initial notice issued u/s. 153A of the Act was set aside by the Hon'ble Jurisdictional High Court. Subsequently, the Assessing Offic....
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....s. Sinhgad Technical Education Society [2017] 397 ITR 344 (SC). 6. Strongly relying upon the observations of the AO and learned First Appellate Authority, learned Departmental Authority (DR) submitted, jurisdiction u/s. 153A of the Act was validly exercised as incriminating materials were found during the search and seizure operation. 7. We have considered rival submissions and perused the materials on record. We have also applied our mind to judicial precedents cited before us. Undisputedly, in so far as assessment year under dispute is concerned, the assessee was subjected to assessment u/s. 143(3) of the Act much prior to date of search and seizure operation. Thus, on the date of search and seizure operation, there was no assessment proceeding pending for the impugned assessment year. That being the case, in a proceeding initiated u/s. 153A of the Act, the AO could have considered issues for addition which are based on incriminating materials found as a result of search and seizure operation. Whereas, while completing the assessment u/s. 153A r.w.s. 143 of the Act, the AO has made certain statutory disallowances u/s. 40A(2)(b) and 37(1) of the Act. The information relating....
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....50% of the total expenses, since, they were incurred in cash and were not fully supported by vouchers. Since, the assessee itself has disallowed 50% of the total expenditure incurred and claimed deduction balance 50%, in our view, it is reasonable, hence, does not require further disallowance. Accordingly, we direct the AO to delete the disallowance. This ground is allowed. ITA No. 2341/Mum/ 2023 A.Y. 2017-18 (Revenue's Appeal) 12. In Ground No.1, the Department has challenged deletion of addition made of Rs. 22,77,81,080/- u/s. 40A(2)(b) of the Act. 13. Briefly the facts are, in course of assessment proceedings, the AO noticed that in the year under consideration, the assessee had taken on charter hire basis ships/vessels from its holding company SML and paid hire charges of Rs. 98,18,15,000/-. Whereas, other unrelated entities had also taken ships/vessels from SML on charter hire basis and paid hire charges of Rs. 89,94,15,943/-. He further found that while the holding company has given on hire 8 vessels to the assessee, it has given on hire 23 vessels to other unrelated entities. On aggregating per day rate of hire charges on tonnage basis, the AO worked out the average....
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....rges paid by unrelated parties, learend First Appellate Authority held that the hire charges paid by the assessee to SML is not excessive compared to market value. Accordingly, he deleted the disallowance. 15. Before us, learned Departmental Representative (DR) strenuously argued that the tonnage of certain vessels given on hire by SML is either identical to or near to the tonnage of ships/vessels given on hire to unrelated parties. He submitted, hire charges of those ships/vessels can be taken as comparable to determine the market value. He submitted, in case such a comparison is made it can be seen that the hire charges received from assessee is more than the hire charges received from unrelated parties. Thus, he submitted, disallowance made by the AO is justified. However, he fairly submitted that the AO has not adopted such approach while determining the market value of the hire charges. 16. The learned counsel appearing for the assessee strongly supported the decision of learned First Appellate Authority. 17. We have considered rival submissions and perused the material on record. On a careful reading of the impugned assessment order we have found that the AO has not ....
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....No.2, Revenue has challenged deletion of disallowance of victualling expenses of Rs. 32,94,375/-. 20. Briefly the facts are, in course of assessment proceeding, the AO noticed that the assessee has claimed deduction of an amount of Rs. 1,31,77,499/- towards victualling expenses. Seeking details of such expenses, the AO ultimately concluded that the assessee failed to establish that the entire expenditure was incurred for the purpose of business. Thus, on adhoc basis he disallowed 25% amounting to Rs. 32,99,375/- out of the total expenses claimed. Assessee contested the aforesaid disallowance before learned First Appellate Authority. After considering the submissions of the assessee in the context of the facts and material on record, learned First Appellate Authority observed that in course of assessment proceeding the assessee had furnished the necessary details with supporting evidences. He further observed that similar disallowance made by the AO in assessee's case in A.Y. 2012-13 was deleted by learned First Appellate Authority. Accordingly, he proceeded to delete the disallowance made by the AO. 21. We have considered rival submissions and perused the material on record. ....