2019 (3) TMI 1168

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..... pplying direct income proportionate method, the A.O. allocated the administrative expenses to the extent of 73.06 % to the tonnage tax activity and rest 26.94 % to the non tonnage tax business - Tribunal deleted the addition - HELD THAT:- Tribunal did not approve the stand taken by the A.O. for reallocation of the administrative expenses rejecting the assessee’s treatment which was based on “Annua .....

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..... for our consideration:- Whether, on the facts and in the circumstances of the case and in law, the Tribunal is justified in deleting the addition of ₹ 6,71,11,494/- on account of adjustment of the ratio for allocation of administrative and other expenses between tonnage and non-tonnage activity. 2] The respondent assessee is a limited company. The assessee had filed a return of i .....

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..... . (2) Where any asset, other than a qualifying ship, is not exclusively used for the tonnage tax business by the tonnage tax company, depreciation on such asset shall be allocated between its tonnage tax business and other business on a fair proportion to be determined by the Assessing Officer, having regard to the use of such asset for the purpose of the tonnage tax business and for the othe .....

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..... The A.O.rejected the system adopted by the assessee only in respect of administrative expenses. By applying direct income proportionate method, the A.O. allocated the administrative expenses to the extent of 73.06 % to the tonnage tax activity and rest 26.94 % to the non tonnage tax business. 5] The Tribunal in the appeal by the assessee deleted such disallowance of expenses by making followin .....

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..... nt which was based on Annual Operating Charter Hire Income method , on the ground that in relation to other expenses namely, total operating expenses, interest and finance charges, the A.O. had accepted the method of accounting adopted by the assessee. Similarly, in relation to depreciation also, the A.O. had not make any adjustments. Only in relation to the administrative expenses, the A.O. made .....

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