9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (3) TMI 605 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Assessee is covered by Tonnage Tax Scheme where Shipping Business Income is computed on the basis of deemed income under Chapter XIIG and no expense has been claimed nor allowed while computing TONNAGE TAX INCOME as BUSINESS INCOME of shipping business - HELD THAT - Disallowance u/s 14A is concerned, we find that this issue has already been adjudicated by the Tribunal in assessee s own case for various years 2019 (2) TMI 1815 - ITAT MUMBAI . The co-ordinate bench, relying upon the decisions of this Tribunal in Varun Shipping Co. Ltd. 2011 (11) TMI 370 - ITAT MUMBAI , Tag Offshore Ltd. 2014 (12) TMI 224 - ITAT MUMBAI , Raj Shipping Agencies Ltd. 2013 (12) TMI 995 - ITAT MUMBAI held that once the department has allowed the option to the assessee under Clause (i) of sub-section (3) of Section 115VP, the disallowance u/s 14A would not be attracted. Respectfully following the same, taking the same view, we delete the disallowance u/s 14A as sustained by Ld. CIT(A). Consequentially, the adjustment of the same while computing Book Profits u/s 115JB would not be arise. Revised statement of income - claiming that INCOME FROM HOUSE PROPERTY on account of rent received from Managing Director should be considered as shipping business income and cannot be taxed separately as Income from House Property u/s.22 - interest income includes tax free income - interest on certain Bank fixed deposits should be considered as business income - interest on staff loan and interest on delayed payment should be considered as business income - bad debts recovered should be considered as business income - sale of old magazines should be considered as business income - assessee is seeking exclusion of all the above stated items while computing book profits u/s 115JB - HELD THAT - Lower authorities refused to admit the assessee s revised computation of income in terms of ratio of Hon ble Apex Court rendered in Goetz India Ltd. V/s CIT 2006 (3) TMI 75 - SUPREME COURT which mandate the assessee to claim deduction by filing a revised return only. No findings on merits have been rendered by lower authorities on any of these issues. It is settled law that there is no bar on the appellate authorities to entertain the same. Further, equity demands that correct income of the assessee be ascertained. Therefore, without delving much deeper, keeping all the issues open, we direct Ld.AO to consider all these claims and remit the matter back to the file of Ld. AO. The Ld. AO is directed to adjudicate the same in the light of the submissions made by the assessee that the aforesaid items would constitute business income for the assessee and secondly, these arises out of shipping business being carried out by the assessee. These grounds stand allowed for statistical purposes.
Issues Involved:
1. Disallowance under Rule 8D(2)(iii) read with Section 14A. 2. Computation of Tonnage Tax Income under Chapter XIIG. 3. Classification of various incomes (House Property, Other Sources) as business income. 4. Application of Section 115JB to specific incomes. 5. Admittance of revised computation of income. Detailed Analysis: 1. Disallowance under Rule 8D(2)(iii) read with Section 14A: The primary issue revolves around the disallowance of ?97,26,004 under Rule 8D(2)(iii) read with Section 14A. The assessee argued that since it is covered by the Tonnage Tax Scheme, where shipping business income is computed on a deemed basis under Chapter XIIG, no expense has been claimed or allowed while computing Tonnage Tax Income. The Tribunal, referencing its own previous decisions in the assessee's case for earlier years and other relevant cases, held that once the department has allowed the option to the assessee under Clause (i) of sub-section (3) of Section 115VP, disallowance under Section 14A would not be attracted. Consequently, the disallowance under Section 14A was deleted, and the corresponding adjustment while computing Book Profits under Section 115JB was also negated. 2. Computation of Tonnage Tax Income under Chapter XIIG: The Tribunal noted that the assessee's income is computed on a deemed basis under Chapter XIIG, which pertains to the Tonnage Tax Scheme. The assessee's argument that no disallowance under Section 14A should be made when income is computed on a deemed basis was accepted. The Tribunal reiterated that the income from shipping business, computed under Chapter XIIG, is based on the tonnage capacity of the ship, and therefore, no expenses have been claimed, making the disallowance under Section 14A inapplicable. 3. Classification of Various Incomes as Business Income: The assessee raised multiple grounds regarding the classification of various incomes (such as income from house property, interest on tax-free bonds, fixed deposits, staff loans, delayed payments, bad debts recovered, and sale of old magazines) as business income. The Tribunal noted that the lower authorities had refused to admit the assessee's revised computation of income based on the Supreme Court's decision in Goetz India Ltd. v. CIT, which mandates claims for deduction to be made by filing a revised return. However, the Tribunal directed the Assessing Officer (AO) to consider these claims and adjudicate them in light of the submissions made by the assessee, emphasizing that the correct income of the assessee should be ascertained. 4. Application of Section 115JB to Specific Incomes: The Tribunal addressed the applicability of Section 115JB (Minimum Alternate Tax) to specific incomes such as income from house property, interest on tax-free bonds, and other sources. The Tribunal ruled that since the disallowance under Section 14A was deleted, the corresponding adjustment while computing Book Profits under Section 115JB would not arise. Additionally, the Tribunal directed the AO to consider the assessee's claims regarding the exclusion of these incomes while computing book profits under Section 115JB. 5. Admittance of Revised Computation of Income: The Tribunal acknowledged that the lower authorities had refused to admit the revised computation of income submitted by the assessee. However, the Tribunal emphasized that there is no bar on appellate authorities to entertain such claims. It directed the AO to consider all the claims made by the assessee in the revised computation of income and adjudicate them on merits, ensuring that the correct income of the assessee is determined. Conclusion: The assessee's appeals were partly allowed for both the assessment years, while the revenue's appeals were dismissed. The Tribunal directed the AO to re-examine the claims made by the assessee regarding the classification of various incomes and the applicability of Section 115JB, and to adjudicate them in accordance with the law. The disallowance under Section 14A was deleted, and the corresponding adjustment while computing Book Profits under Section 115JB was negated.
|
