2014 (1) TMI 1916 - AT - Income Tax

Benefit of tonnage tax - HELD THAT - We find that in assessment year 2009-10 2013 (9) TMI 1287 - ITAT CHENNAI the tribunal has decided the very issue in favour of the assessee. The Revenue submits as per ground since the ship was not operated by the assessee itself but by West Asia Maritime Limited, so, it cannot be taken as entitled for the aforesaid benefit of tonnage tax. This argument, in our view, does not merit acceptance. After going through the relevant provision, it nowhere comes out that in case of a jointly owned ship by two or more companies, the same has to be operated specifically by each of the co-owners/ assessee. Therefore, this ground also fails. Needless to say, in assessment year 2009-10 the issue has been decided in assessee s favour. For the impugned assessment year as well, no justifiable ground is there to adopt a different view.

Summary

Issues Involved:
Appeals filed by Revenue against CIT(A)'s order on tonnage tax claim eligibility for assessment years 2006-07, 2007-08, 2008-09, and 2010-11 under section 143(3) of the Income-tax Act, 1961.

Analysis:
1. The Revenue challenged the CIT(A)'s decision regarding the eligibility of the assessee company for tonnage tax benefits. The Revenue contended that the CIT(A) erred in holding the company eligible for tonnage tax claim without fulfilling all stipulations under Chapter XIIG of the IT Act.

2. The CIT(A) upheld the eligibility of the company for tonnage tax benefits based on the approval granted by the Addl. CIT and the ownership structure of the ship. The CIT(A) referred to a previous tribunal decision supporting the eligibility of the ship for tonnage tax benefits. The Revenue argued that since the ship was operated by another company, the benefit should not apply to the assessee.

3. The tribunal examined the grounds raised by both parties and found that a previous tribunal decision had already ruled in favor of the assessee for a similar issue in a different assessment year. The tribunal noted that the relevant provision did not require each co-owner to operate the ship individually. Therefore, the tribunal upheld the CIT(A)'s decision and dismissed the Revenue's appeals for all assessment years.

Conclusion:
The tribunal affirmed the CIT(A)'s findings regarding the eligibility of the assessee company for tonnage tax benefits, citing a previous tribunal decision and the ownership structure of the ship. The tribunal concluded that the operation of the ship by another co-owner did not disqualify the assessee from claiming the tonnage tax benefit. Consequently, all appeals filed by the Revenue were dismissed.