2025 (10) TMI 423

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....No.281/17-18 arising out of the appeal before it against the order dated 29.12.2017 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the Addl. CIT, Special Range-05, New Delhi (hereinafter referred to as the Ld. AO). 2. Heard and perused the records. The necessary facts are that the assessee is a public limited company engaged in the business of developing, maintaining and operating of barrages, jetties, port, terminal, canal, waterways for transportation of cargo, goods, passengers and shipping. As for the relevant year, the respondent assessee filed its original return declaring loss of Rs. 80,86,47,512 and claiming Tax Deducted at Source ("TDS") credit of Rs. 76,24,642; the said return was subsequen....

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.... was from vessels hired from outside India and the assessee could not procure rehiring segment of the business. This aspect has been appreciated by the ld.CIT(A) and further it was appreciated that the fall in revenue in regular business segment of the assessee is only 25% due to competition/slump in the shipping industry. Further, the CIT(A) has examined and verified the expenses which are mostly fixed expenses. Thus, where the AO had not doubted the genuineness of the expenses, and there has been failure on the part of the AO to understand the nature of expenses in the context of nature of the business, like increase in repair and maintenance due to acquisition of two vessels by the assessee during the relevant year, increasing the total ....

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....ls so as to make them worthy of sailing which were capitalized by the subsidiary. Chart depicting details of the carrying amounts of vessels in the books of JITF Shipping & Logistics (Singapore) Pte Ltd was given and same is reproduced below; Date Particulars MV Jindal Tarini MV Jindal Varuna Total     USD INR USD INR USD INR                 07.02.2012 Purchase Cost [Rs. 49.26/ 1 USD] 60,12,945 29,62,04,192 76,10,942 37,49,23,267 1,36,23,887 67,11,27,459   Addition during 11-12 71,343   84,498   1,55,841   31.03.2012 Balance 60,84,288   76,95,....

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....e vessels were purchased by assessee [Rs. 61.456/ 1 USD] 62,02,402 38,11,75,000 73,80,074 45,35,50,000 1,35,82,476 83,47,25,000 Profit   21,342 13,11,595 15,116 9,28,969 36,458 22,40,564                 6. It submitted for assessee that the carrying amount of the two vessels in the books of JITF Shipping & Logistics (Singapore) Pte. Ltd as on 29.09.2014 as per the financial statements was USD 1,35,46,018. The assessee was not able to get a beakthrough in Singapore and failed in procuring business due to fierce competition in Singapore. The subsidiary company started incurring heavy losses and in order to curtail these losses, th....