THE SHIPPING CORPORATIO OF INIDA LTD, MUMBAI V. ADDL CIT RG 5(3), MUMBAI

ITA 2945/MUM/2010

• Counselvise Citation: 294519914 RSA 2010
• Duration Of Justice: 3 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 22-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 15-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C P PATNAIK; MUKESH TRIVEDI
• Assessee Lawyers: FA RROKH V IRANI; NITESH S JOSH I
• Keywords: Business income; Depreciation; Capital expenditure
• Section: 28; 90; 244A

Judgement Text

H IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI .. , ; BEFORE SHRI P.M. JAGTAP, AM AND SHRI VIVEK VARMA, J M ./ I.T.A. NOS. 2944 & 2945/MUM/2010 ( / ASSESSMENT YEARS : 2005-06 & 2006-07) DIRECTOR (FINANCE), THE SHIPPING CORPORATION OF INDIA LTD., SHIPPING HOUSE, 10 TH FLOOR, 245 MADAM CAMA ROAD, NARIMAN POINT, MUMBAI-400021 / VS. ADDL. COMMISSIONER OF INCOME TAX (LTU), 29 TH FLOOR, WORLD TRADE CENTRE, COLABA, MUMBAI-400006 ./ PAN : AAACT1524F ( # / APPELLANT ) .. ( $%# / RESPONDENT ) # & / APPELLANT BY : SHRI FARROKH V. IRANI & SHRI NITESH S. JOSHI $% # & / RESPONDENT BY : SHRI MUKESH TRIVEDI & SHRI K.C.P. PATNAIK & + / DATE OF HEARING : 22-1-2014 & + / DATE OF PRONOUNCEMENT :21-3-14 / O R D E R PER P.M. JAGTAP, A.M . .. , THESE TWO APPEALS FILED BY THE ASSESSEE AGAINST TWO SEPARATE ORDERS OF LD. CIT(A) -24, MUMBAI BOTH DATED 27-01-2 010 FOR ASSESSMENT YEARS 2005-06 AND 2006-07 INVOLVE SOME C OMMON ISSUES AND THE SAME THEREFORE HAVE BEEN HEARD TOGET HER AND ARE 2 ITA NOS. 2944 & 2945/MUM/10 BEING DISPOSED OF BY THIS SINGLE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE , GROUND NO. 1 & 2 RAISED BY THE ASSESSEE IN ITS APPEAL FOR A.Y. 2005-06 ARE GENERAL SEEKING NO SPECIFIC DECISION FROM US. 3. THE ISSUES INVOLVED IN GROUND NO. 3 & 4 ARE INTE RLINKED AND THE SAME READ AS UNDER:- 3. ON THE FACTS AND AS PER PROVISIONS OF ACT, C IT(A) HAS FAILED TO APPRECIATE THAT: 3.1 APPELLANT COMPANY IS COVERED UNDER CHAPTER XII G, OF THE ACT FOR DETERMINATION OF ITS TAXABLE INCOM E. 3.2 APPELLANT COMPANYS VARIOUS INCOMES VIZ CORE SH IPPING, INCIDENTAL SHIPPING, INTEREST AND DIVIDEND ARE FROM BUSINESS OF OPERATION OF QUALIFIED SHIPS. 3.3 APPELLANT COMPANY HAS, AS PER PROVISIONS OF SEC TION II5VJ OF THE ACT, GIVEN TREATMENT OF ALLOCATION OF COMMON COST IN THE RETURN OF INCOME ON REASONABLE BASIS. 4. ON THE FACTS AND AS PER PROVISIONS OF THE ACT CIT(A), OUGHT TO HAVE; 4.1 ALLOWED THE APPELLANT COMPANYS APPEAL AND 4.2 ALLOWED THE APPELLANT COMPANYS TREATMENT OF REASONABLE ALLOCATION OF COMMON COSTS AS PER PROVIS IONS OF SECTION 1I5VJ OF ACT. 4. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY EN GAGED IN THE BUSINESS OF MERCHANT SHIPPING. IN THE RETURN O F INCOME FILED FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 2005-06 ON 27-10-2005, ITS INCOME WAS DECLARED BY THE ASSESSEE COMPANY UND ER THE TONNAGE TAX SCHEME LAID DOWN IN SECTION 115 V OF TH E INCOME TAX ACT, 1961 AND THE SAME WAS COMPUTED AT RS. 98,31,28 ,573/- IN ACCORDANCE WITH THE RELEVANT PROVISIONS CONTAINED I N SECTION 115 VG OF THE ACT. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, IT WAS NOTICED BY THE A.O. THAT APART FROM TONNAGE INC OME INCLUDING 3 ITA NOS. 2944 & 2945/MUM/10 INCOME FROM INCIDENTAL ACTIVITIES, THE ASSESSEE HAS OFFERED INCOME FROM INTEREST AND DIVIDEND AMOUNTING TO RS. 80,23,2 3,036/- AND RS. 3,71,72,979/- UNDER THE HEAD INCOME FROM OTHER SOURCES AND ADMINISTRATIVE EXPENSES OF RS. 3,01,56,378/- AND RS . 13,97,196/- WERE ALLOCATED AGAINST THE SAID INCOME. THIS ALLOCA TION WAS CLAIMED TO BE MADE IN THE RATIO OF TURNOVER AS PER THE PROV ISIONS OF SECTION 115 VJ OF THE ACT DEALING WITH TREATMENT OF COMMON COSTS. ACCORDING TO THE A.O., THE INCOME FROM INTEREST AND DIVIDEND BEING CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES, THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION U/S 57(III ) OF THE ACT ON ACCOUNT OF EXPENDITURE WHOLLY AND EXCLUSIVELY INCUR RED FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME AND NOT FO R PRO RATA EXPENSES ON TURNOVER BASIS AS CLAIMED BY THE ASSESS EE. HE, THEREFORE, REQUIRED THE ASSESSEE TO OFFER ITS EXPLA NATION IN THE MATTER. IN REPLY, IT WAS SUBMITTED ON BEHALF OF TH E ASSESSEE THAT EVEN THOUGH INCOME FROM INTEREST AND DIVIDEND WAS C ONSIDERED BY IT AS INCOME FROM OTHER SOURCES, THE SAME IS REQUIR ED TO BE TREATED AS CORE SHIPPING INCOME AND COMMON ADMINISTRATIVE E XPENSES ARE TO BE ALLOCATED AMONGST THE DIFFERENT BUSINESS ACTI VITIES OF THE ASSESSEE ON A REASONABLE BASIS IN TERMS OF THE PROV ISIONS OF SECTION 115 VJ OF THE ACT. THIS EXPLANATION OF THE ASSESSE E WAS NOT FOUND ACCEPTABLE BY THE A.O. HE NOTED THAT THE APPORTIONM ENT OF COMMON COST AS ENVISAGED IN SECTION 115 VJ (1) OF T HE ACT WAS AMONGST OTHER BUSINESS OR ACTIVITY CARRIED ON B Y THE TONNAGE TAX COMPANY AND SUCH ACTIVITY OUGHT TO BE A BUSINES S RELATED ACTIVITY. HE HELD THAT THE INCOME EARNED BY THE AS SESSEE ON ACCOUNT OF INTEREST ON MONIES DEPLOYED OUT OF SURPL US FUNDS AS WELL AS DIVIDEND INCOME WAS CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES AND THE ASSESSEE THEREF ORE WAS NOT ENTITLED TO CLAIM THE DEDUCTION ON ACCOUNT OF APPOR TIONMENT OF COMMON COSTS AS PROVIDED IN SECTION 115 VJ OF THE A CT. HE HELD 4 ITA NOS. 2944 & 2945/MUM/10 THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION AGAINST SUCH INCOME ONLY ON ACCOUNT OF EXPENDITURE WHOLLY AND EXCLUSIVE LY INCURRED FOR THE PURPOSE OF EARNING SUCH INCOME AND ESTIMATING S UCH EXPENDITURE AT RS. 1 LAC OUT OF ESTABLISHMENT CHARG ES, HE ALLOWED THE DEDUCTION ONLY TO THAT EXTENT U/S 57(III) OF TH E ACT. 5. THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF ITS CLAIM FOR DEDUCTION FOR PROPORTIONATE COST AGAINST INTERE ST AND DIVIDEND INCOME WAS CHALLENGED BY THE ASSESSEE IN AN APPEAL FILED BEFORE THE LD. CIT(A) AND THE FOLLOWING SUBMISSION WAS MAD E ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(A) IN SUPPORT OF IT S CLAIM ON THIS ISSUE:- 1) SCI IS ENGAGED FULLY IN SHIPPING BUSINESS. IT H AS NO OTHER ACTIVITY. DURING THE COURSE OF BUSINESS, INTE REST IS EARNED ON FUNDS DEPLOYED OUT OF SURPLUS CASH/UNUTIL IZED AMOUNT STANDING TO THE CREDIT OF STATUTORY RESERVES WHILE WAITING FOR OPPORTUNE TIME TO ACQUIRE THE ASSETS. T HE INTEREST GENERATED NEEDS TO BE TREATED AS CORE SHIP PING INCOME. HOWEVER INTEREST ON DEPOSITS AND DIVIDEND F ROM COMPANIES ARE SUO MOTO CONSIDERED BY SCI AS INCOME FROM OTHER SOURCE WHILE COMPUTING TAXABLE INCOME UNDER TONNAGE TAX SCHEME. A TONNAGE TAX COMPANY IS GUIDED BY PROVISIONS OF CH APTER XII-G WHICH INCORPORATES SPECIAL PROVISIONS RELATIN G TO INCOME OF SHIPPING COMPANIES. ONE OF THE SPECIAL PR OVISION UNDER CHAPTER XX-V DEALS WITH TREATMENT OF COMMON C OSTS WHERE A TONNAGE TAX COMPANY ALSO CARRIES ON ANY BUS INESS ACTIVITY OTHER THAN TONNAGE TAX BUSINESS. THE SAID SECTION IS REPRODUCED HEREUNDER FOR READY REFERENCE. TREATMENT OF COMMON COSTS. 115VJ. (1) WHERE A TONNAGE TAX COMPANY ALSO CARRIES ON ANY BUSINESS OR ACTIVITY OTHER THAN THE TONNAGE TAX BUSINESS, COMMON COSTS ATTRIBUTABLE TO THE TONNAGE TAX BUSINESS SHALL BE DETERMINED ON A REASONABLE BASIS. (2) WHERE ANY ASSET, OTHER THAN A QUALI1YING SHIP, IS NOT EXCLUSIVELY USED FOR THE TONNAGE TAX BUSINESS BY TH E TONNAGE TAX COMPANY, DEPRECIATION ON SUCH ASSET SHA LL BE ALLOCATED BETWEEN ITS TONNAGE BUSINESS AND OTHER BU SINESS ON A FAIR PROPORTION TO BE DETERMINED BY THE AO, HA VING 5 ITA NOS. 2944 & 2945/MUM/10 REGARD TO THE USE OF SUCH ASSET FOR THE PURPOSE OF THE TONNAGE TAX BUSINESS AND FOR THE OTHER BUSINESS. THUS AS PER SECTION 115VJ, IT IS STATED THAT WHERE A TONNAGE TAX COMPANY ALSO CARRIES ON ANY BUSINESS OR ACTIVITY OTHER THAN THE TONNAGE TAX BUSINESS, THEN THE COMMON COSTS ATTRIBUTABLE TO THE TONNAGE TAX BUSINE SS SHALL DETERMINED ON A REASONABLE ACCORDINGLY THE CO MMON ADMINISTRATIVE EXPENSES HAVE BEEN ALLOCATED BY SCI ON THE BASIS OF TURNOVER. S.NO. ACTIVITY TURNOVER ALLOCATED ADMINISTRAT IVE EXPENSES (IN RS) (IN RS.) 1. INCIDENTAL 22,74,22,247 85,47,968 ACTIVITIES 2. INTEREST 80,23,23,036 3,01,56,378 3. DIVIDEND 3,71,72,979 13,97,196 YOU MAY APPRECIATE THAT SCI IS SHIPPING COMPANY AND IS ASSESSED UNDER CHAPTER XIIG (TONNAGE TAX SCHEME) . ON VERIFICATION OF THE VARIOUS INCOMES EARNED YOU WILL FIND THAT MAIN INCOME EARNED BY THE COMPANY ARE FROM CORE SHI PPING ACTIVITIES, INCIDENTAL SHIPPING ACTIVITIES AND INCO ME FROM INTEREST ON DEPOSITS. THE INTEREST INCOME IS EMERGING DUE TO TEMP IN OF F UNDS IN DEPOSITS, WHICH ARE EARNED OUT OF CORE SHIPPING ACTIVITIES. THE ADMINISTRATIVE EXPENSES ARE INCURRED FOR ENTIRE ACTIVITIES, WHICH INCLUDE CORE SHIPPING ACTIVITIES AND INCIDENTAL ACTIVITIES AND OTHER INCOME. MOREOVER AS PER PROVISION OF SECTION 115VJ SCI IS ALLOCATING THE EX PENSES OR ALLOCATING COMMON COST. EVEN THOUGH EXPENSES ALLOCATED TO INCOME FROM OTHE R SOURCES IS AROUND RS. 3.15 CRORES THE AMOUNT DEDUC TED IS REQUIRED TO BE TREATED AS EXPENDED WHOLLY AND EXCLU SIVELY FOR EARNING SUCH INCOME. THEREFORE THE EXPENSES SHO ULD BE ALLOWED AS THE APPORTIONMENT OR ALLOCATION IS NOT O N ADHOC BASIS BUT AS PER SPECIAL PROVISIONS OF SECTION 115V J (AS MADE AVAILABLE TO A TONNAGE TAX SHIPPING COMPANY) A ND ON THE BASIS OF MATHEMATICAL AND SCIENTIFIC FORMULA APPLIED FOR THE PURPOSE. 6. THE LD. CIT(A) DID NOT FIND MERIT IN THE SUBMISS ION MADE ON BEHALF OF THE ASSESSEE ON THIS ISSUE. ACCORDING TO HIM, THE INCOME FROM INTEREST AND DIVIDEND WAS MAINLY DERIVED BY TH E ASSESSEE FROM SURPLUS FUNDS KEPT IN THE BANKS AND OTHER PUB LIC FINANCIAL INSTITUTIONS AND SINCE THIS INVESTMENT WAS NOT MADE BY THE 6 ITA NOS. 2944 & 2945/MUM/10 ASSESSEE ON ACCOUNT OF ANY BUSINESS EXIGENCY, THE I NCOME EARNED ON ACCOUNT OF INTEREST AND DIVIDEND WAS CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. HE HELD THAT THE ASSESSEE THEREFORE WAS ENTITLED TO CLAIM DEDUCTION FROM SUCH INCOME ONLY ON ACCOUNT OF EXPENDITURE INCURRED WHOLLY AND EXCLUSIV ELY FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME AS PER THE PROVISIONS OF SECTION 57(III) OF THE ACT AND NOT ON ACCOUNT OF AP PORTIONMENT OF COMMON COSTS AS PER THE PROVISIONS OF SECTION 115 V J OF THE ACT AS RIGHTLY HELD BY THE A.O. HE, THEREFORE, UPHELD THE ORDER OF THE A.O. ALLOWING DEDUCTION OF RS. 1 LAC ONLY FROM INTEREST AND DIVIDEND INCOME U/S 57(III) OF THE ACT. 7. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT A SIMILAR ISSUE WAS INVOLVED IN ASSESSEES OWN CASE FOR A.Y. 2007-08 AND THE CO-ORDINATE BENCH OF THIS TRIBUNAL DECIDED THE SAME AGAINST THE ASSESSEE VIDE PARA 36 & 37 OF ITS ORDER DATED 29 TH JULY, 2011 PASSED IN ITA NO. 145/MUM/2011 WHICH REA D AS UNDER:- GROUND NO.7, IS ON ALLOCATION OF ADMINISTRATIVE EX PENDITURE TO INCOME, WHICH IS ADMITTEDLY ASSESSABLE UNDER THE HE AD OTHER SOURCES . THE ASSESSEE RELIES ON THE PROVISIONS OF SECTION 115VJ. IN OUR CONSIDERED OPINION, THIS SECTION DOES NOT AP PLY TO THE FACTUAL SITUATION. THE ASSESSEE HAS CONTENDED THAT IT DOES NOT CARRY ON ANY OTHER BUSINESS AND THE ENTIRE INCOME R ELATES TO INCOME FROM BUSINESS OF OPERATING QUALIFYING SHIPS. WE HAVE ALSO HELD THAT THE ASSESSEE DOES NOT HAVE ANY SEPARATE A CTIVITY WHICH COULD RESULT IN INCOME. THERE IS NO DISPUTE THAT TH E INCOME IS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES . INTEREST IS EARNED ON PARKING OF SURPLUS FUNDS. ALLOCATION O F EXPENDITURE AS THAT WHICH IS NECESSARY TO EARN THE INTEREST INC OME TO THE TUNE OF ` 7,83,88,809 IS, IN OUR OPINION, IS HIGHLY EXCE SSIVE AND INCORRECT. RELIANCE ON RULE-8D IS ALSO MISPLACED. T HE ISSUE IS, WHETHER OR NOT THE CLAIM FALLS UNDER THE KEN OF SEC TION 57(III), WHICH READS AS FOLLOWS:- 57(III) ANY OTHER EXPENDITURE (NOT BEING IN THE N ATURE OF CAPITAL EXPENDITURE) LAID OUT OR EXPENDED WHOLLY 7 ITA NOS. 2944 & 2945/MUM/10 AND EXCLUSIVELY FOR THE PURPOSE OF MAKING OR EARNIN G SUCH INCOME. AS THE EXPENDITURE BEING CLAIM BY THE ASSESSEE CANN OT BE SAID TO HAVE BEEN LAID DOWN OR EXPENDED WHOLLY AND EXCLUSIV ELY FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME, WE UPHOLD THE FINDING OF THE REVENUE AUTHORITIES IN THIS REGARD. IN OUR O PINION, THE ASSESSING OFFICER HAS RIGHTLY HELD THAT THE ASSESSE E WOULD NOT HAVE INCURRED THE EXPENDITURE CLAIMED FOR EARNING I NCOME. THE ESTIMATION OF RS. 1,00,000 BY THE ASSESSING OFFICER , IN OUR OPINION, IS REASONABLE. COMING TO RELIANCE PLACED B Y THE LEARNED SR. COUNSEL, ON THE DECISION OF HON'BLE JURISDICTIO NAL HIGH COURT CHINAI AND CO. PVT. LTD. (SUPRA), WE ARE OF THE OPI NION THAT THESE ARE FACTUAL MATTERS AND THE SAME CANNOT BE TAKEN AS A BINDING PRECEDENT. IN VIEW OF THE ABOVE DISCUSSION, WE UPHO LD THE FINDING OF THE COMMISSIONER (APPEALS) AND DISMISS GROUND NO .7, RAISED BY THE ASSESSEE. 8. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE HAS SUBMITTED THAT THE INVESTMENT IN FIXED DEPOSITS WAS MADE BY THE ASSESSEE COMPANY OUT OF ITS INCOME FROM SHIPPING BUSINESS AND INTEREST EARNED THEREON THUS VERY MUCH FORMED PART OF CORE SHIPPING BUSINESS OF THE ASSESSEE. HE SUBMI TTED THAT SIMILARLY THE DIVIDEND INCOME WAS EARNED BY THE ASS ESSEE ON THE INVESTMENT MADE IN THE SHARES OF OTHER SHIPPING COM PANY AND THE SAME THEREFORE WAS ALSO COVERED WITHIN THE CORE SHI PPING BUSINESS OF THE ASSESSEE. HE HAS CONTENDED THAT THE ASSESSE E THEREFORE WAS ENTITLED TO CLAIM DEDUCTION ON ACCOUNT OF COMMON CO STS ATTRIBUTABLE TO THE TONNAGE TAX BUSINESS ON A REASO NABLE BASIS AS PER SECTION 115 VJ OF THE ACT. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PUNIT COMMERCIAL LTD. [2000] 245 ITR 550 (B OM.) AND IN THE CASE OF CIT VS. INDO SWISS JEWELS LTD. AND OTHE R [2006] 284 ITR 389 (BOM). 9. THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED T HAT A SIMILAR ISSUE INVOLVING IDENTICAL FACTS AND CIRCUMSTANCES H AS ALREADY BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE REVENUE IN ASSESSEES OWN CASE FOR A.Y. 2007-08 AND THERE IS NO JUSTIFIABLE R EASON TO DEVIATE 8 ITA NOS. 2944 & 2945/MUM/10 FROM THE VIEW ALREADY TAKEN BY THE TRIBUNAL ON A SI MILAR ISSUE. HE HAS CONTENDED THAT THE INTEREST INCOME EARNED BY TH E ASSESSEE ON INVESTMENT OUT OF SURPLUS FUNDS AS WELL AS DIVIDEND INCOME EARNED BY IT WAS CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES AND EVEN THE ASSESSEE COMPANY ITSELF HAD O FFERED THE SAME IN THE RETURN OF INCOME AS INCOME FROM OTHER SOURCES. HE HAS CONTENDED THAT THE CORE ACTIVITIES AND INCIDENT AL ACTIVITIES OF SHIPPING BUSINESS ARE DEFINED IN THE ACT AND INTERE ST AND DIVIDEND INCOME EARNED BY THE ASSESSEE IS NOT FALLING EITHER UNDER THE CORE ACTIVITY OR EVEN UNDER INCIDENTAL ACTIVITY AS PER T HE SAID DEFINITION. 10. AFTER CONSIDERING THE RIVAL SUBMISSION AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND NO INFIRMITY I N THE IMPUGNED ORDER OF THE LD. CIT(A) CONFIRMING THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION F ROM INTEREST AND DIVIDEND INCOME ON ACCOUNT OF COMMON COSTS ATTRIBUT ABLE TO THE TONNAGE TAX BUSINESS AS PER SECTION 115 VJ OF THE A CT. AS PER THE SAID PROVISION, WHERE TONNAGE TAX COMPANY ALSO CARR IES ON ANY BUSINESS OR ACTIVITY OTHER THAN THE TONNAGE TAX BUS INESS, THEN COMMON COSTS ATTRIBUTABLE TO THE TONNAGE TAX BUSINE SS IS REQUIRED TO BE DETERMINED ON A REASONABLE BASIS. IN THE PRE SENT CASE, THE INCOME WAS EARNED BY THE ASSESSEE COMPANY ON ACCOUN T OF INTEREST ON FIXED DEPOSITS MADE OUT OF SURPLUS FUNDS AND DIV IDEND INCOME EARNED ON INVESTMENT MADE IN THE SHARES OF OTHER CO MPANY AND HAVING REGARD TO ALL THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE SAME CANNOT BE SAID TO HAVE EARNED BY THE ASSES SEE BY CARRYING ON ANY SEPARATE BUSINESS ACTIVITY OTHER TH AN THE TONNAGE TAX BUSINESS AS ENVISAGED IN SECTION 115 VJ OF THE ACT. THE SAID INCOME WAS CHARGEABLE TO TAX IN THE HANDS OF THE AS SESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES AS RIGHTLY HEL D BY THE AUTHORITIES BELOW AND EVEN THE ASSESSEE ITSELF HAD ORIGINALLY OFFERED 9 ITA NOS. 2944 & 2945/MUM/10 THE SAID INCOME UNDER THE HEAD INCOME FROM OTHER S OURCES. AS REGARDS THE DECISION OF HONBLE BOMBAY HIGH COURT I N THE CASE OF PUNIT COMMERCIAL LTD. (SUPRA) CITED BY THE LD. COUN SEL FOR THE ASSESSEE, IT IS OBSERVED THAT THE SAME WAS RENDERED IN THE CONTEXT OF SECTION 80HHC(3)(A) OF THE ACT AND THE RATIO OF THE SAID DECISION THEREFORE CANNOT BE APPLIED IN THE PRESENT CASE WHI CH INVOLVES THE ISSUE IN THE CONTEXT OF SECTION 115 VJ OF THE ACT. IN THE CASE OF INDO SWISS JEWELS LTD. AND OTHER (SUPRA) CITED BY T HE LD. COUNSEL FOR THE ASSESSEE, THE FACTS INVOLVED WERE DIFFERENT FROM THE PRESENT CASE INASMUCH AS INTER-CORPORATE DEPOSITS WERE MADE BY THE ASSESSEE FROM THE SURPLUS FUNDS THAT WERE KEPT APAR T FOR PAYMENT FOR IMPORTED MACHINERY AND THE INTEREST EARNED ON S UCH SHORT TERM DEPOSITS OF THE MONEY KEPT APART FOR THE PURPOSE OF BUSINESS WAS HELD TO BE BUSINESS INCOME OF THE ASSESSEE BY THE H ONBLE BOMBAY HIGH COURT. THE CASE LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE THUS ARE NOT APPLICABLE IN THE PRESENT CASE. ON TH E OTHER HAND, A SIMILAR ISSUE INVOLVING IDENTICAL FACTS AND CIRCUMS TANCES HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2007-08 VIDE ITS ORDER DATED 29 TH JULY, 2011 (SUPRA) AND RESPECTFULLY FOLLOWING THE SAID DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) CONFIRMING THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION F ROM INTEREST AND DIVIDEND INCOME ON ACCOUNT OF COMMON COSTS ATTRIBUT ABLE TO THE TONNAGE TAX BUSINESS AS PER THE PROVISIONS OF SECTI ON 115VJ OF THE ACT. GROUND NO. 3 & 4 OF THE ASSESSEES APPEAL FOR A.Y. 2005-06 ARE ACCORDINGLY DISMISSED. 11. GROUND NO. 5 & 6 OF THE ASSESSEES APPEAL INVOL VE A COMMON ISSUE RELATING TO ITS CLAIM FOR CREDIT OF FOREIGN T AXES AND THE SAME READ AS UNDER:- 10 ITA NOS. 2944 & 2945/MUM/10 5. ON THE FACTS AND AS PER PROVISIONS OF ACT, CI T (A) HAS ERRED IN CONFIRMING THE A.O.S ACTION OF REJECTING THE APPELLANTS CLAIM OF CREDIT OF FOREIGN TAXES, RS.1 80,31,764/. 6. ON THE FACTS AND AS PER PROVISIONS OF THE ACT, C IT(A) OUGHT TO HAVE UPHELD APPELLANT COMPANYS CLAIM FOR CREDIT OF FOREIGN TAXES PAID RS. 1,80,31,764/-. 12. DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEF ORE THE A.O., THE ASSESSEE FURNISHED DOCUMENTS EVIDENCING P AYMENT OF FREIGHT TAXES IN SOUTH KOREA, BANGLADESH, SRI LANKA , HONGKONG, MALAYSIA & TAIWAN. ON THE BASIS OF THESE DOCUMENTS , RELIEF U/S 90 AND 91 OF THE ACT WAS CLAIMED BY THE ASSESSEE. SIN CE THE SAID CLAIM WAS NOT MADE BY THE ASSESSEE IN THE RETURN OF INCOME AND THE RELEVANT DETAILS SHOWING HOW THE SAID RELIEF WA S ATTRACTED IN ITS CASE WERE NOT FURNISHED BY THE ASSESSEE, THE A.O. D ISALLOWED THE CLAIM OF THE ASSESSEE FOR RELIEF U/S 90 AND 91 OF T HE ACT. IN THIS REGARD, HE RELIED ON THE DECISION OF HONBLE SUPREM E COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (284 ITR 323). ON APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF THE A.O. ON THIS IS SUE FOR THE SAME REASONS AS GIVEN BY THE A.O. 13. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORDS. IT IS OBSERVED THAT THE CLAIM MADE BY THE ASSESSEE FOR RELIEF U/S 90 AND 91 OF THE ACT ON ACCOUNT OF FOREIGN TAXES PAID OUTSIDE INDIA WAS DISALLOWED BY THE A.O. AS WELL AS THE LD. CIT(A) MAINLY ON THE GROUND THAT THE SAME WAS NOT MADE BY THE ASSESSEE BY FILING A REVIS ED RETURN. RELIANCE IN THIS REGARD WAS PLACED BY THE AUTHORITI ES BELOW ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GO ETZE (INDIA) LTD. (SUPRA). AS HELD BY THE HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS P. LTD. [2012] 349 ITR 336 (BOM) CITED BY THE LD. COUNSEL FOR THE ASSESSEE, THE ASSESSEE IS ENTITLED TO RAISE ANY ADDITIONAL CLAIMS BEFORE THE 11 ITA NOS. 2944 & 2945/MUM/10 APPELLATE AUTHORITIES AS PER THE DECISION OF HONBL E SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER COMPANY LTD. VS. CIT [1998] 229 ITR 383 (SC) AND THE HONBLE SUPREME COU RT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) DID NOT HOLD AN YTHING CONTRARY TO WHAT WAS HELD BY THE PREVIOUS JUDGMENT IN THE CASE OF NATIONAL THERMAL POWER COMPANY LTD. (SUPRA) TO THE EFFECT TH AT EVEN IF A CLAIM NOT MADE BEFORE THE A.O., IT CAN BE MADE BEFO RE THE APPELLATE AUTHORITIES. IT WAS HELD BY THE HONBLE BOMBAY HIGH COURT THAT THE POWER OF THE APPELLATE AUTHORITY TO ENTERTAIN SUCH A CLAIM HAS NOT BEEN NEGATED BY THE HONBLE SUPREME COURT IN THE JU DGMENT IN THE CASE OF GOETZE (INDIA) LTD. AND THE HONBLE SUPREME COURT IN FACT HAS MADE IT CLEAR THAT THE ISSUE IN THAT CASE WAS L IMITED TO THE POWER OF ASSESSING AUTHORITY AND THAT THE JUDGMENT DOES NOT IMPINGE ON THE POWER OF THE TRIBUNAL U/S 254 OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO SUBMITTED THAT TH E RELEVANT DETAILS IN SUPPORT OF ITS CLAIM FOR RELIEF U/S 90 A ND 91 OF THE ACT WERE ALSO FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT(A) (PAGE 157 OF THE PAPER BOOK) BUT THE SAME HAVE NOT BEEN CONSI DERED BY THE LD. CIT(A). HE HAS URGED THAT THIS ISSUE MAY THEREF ORE BE RESTORED TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRES H ON MERIT AFTER NECESSARY VERIFICATION. KEEPING IN VIEW THE SUBMIS SIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE ON THIS ISSUE, WE ARE OF THE VIEW THAT THE CLAIM OF THE ASSESSEE FOR RELIEF U/S 90 AN D 91 OF THE ACT IN RESPECT OF FOREIGN TAXES PAID OUTSIDE INDIA DESERVE S TO BE ENTERTAINED AND SINCE THE LD. D.R. HAS ALSO NOT RAI SED ANY OBJECTION IN THIS REGARD, THE MATTER SHOULD GO BACK TO THE A. O. FOR DECIDING THE SAME AFRESH AFTER NECESSARY VERIFICATION. WE O RDER ACCORDINGLY. GROUND NO. 5 & 6 OF THE ASSESSEES APPEAL FOR A.Y. 2005-06 ARE ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURP OSE. 12 ITA NOS. 2944 & 2945/MUM/10 14. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSE E, THE ISSUES RAISED IN GROUND NO. 7 RELATING TO INTEREST CHARGED U/S 244A AND 234D ARE CONSEQUENTIAL. THE A.O. IS ACCORDINGLY DI RECTED TO ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE ON THESE ISSUE S. 15. NOW, WE SHALL TAKE UP THE APPEAL OF THE ASSESSE E FOR A.Y. 2006-07 BEING ITA NO. 2945/MUM/2010. 16. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSE E, GROUND NO. 1 & 2 OF ITS APPEAL ARE GENERAL SEEKING NO SPECIFIC DECISIONS. 17. GROUND NO. 3 & 4 OF THE ASSESSEES APPEAL READ AS UNDER:- 3. ON THE FACTS AND AS PER PROVISIONS OF ACT, C IT (A) HAS FAILED TO APPRECIATE THAT: 3.1. APPELLANT COMPANY IS COVERED UNDER CHAPTER XII G, OF THE ACT FOR DETERMINATION OF ITS TAXABLE INCOM E 3.2. APPELLANT COMPANYS VARIOUS INCOMES VIZ CORE SHIPPING, INCIDENTAL SHIPPING, INTEREST AND DIVIDEN D ARE FROM BUSINESS OF OPERATION OF QUALIFIED SHIPS. 3.3. APPELLANT COMPANY HAS, AS PER PROVISIONS OF SE CTION 11 5VJ OF THE ACT, GIVEN TREATMENT OF ALLOCATION OF CO MMON COST IN THE RETURN OF INCOME ON REASONABLE BASIS, 4. ON THE FACTS AND AS PER PROVISIONS OF THE ACT CIT (A), OUGHT TO HAVE 4.1. ALLOWED THE APPELLANT COMPANYS APPEAL AND 4.2. ALLOWED THE APPELLANT COMPANYS TREATMENT OF REASONABLE ALLOCATION OF COMMON COSTS AS PER PROVIS IONS OF SECTION 11 5VJ OF ACT. 18. AS AGREED BY THE LD. REPRESENTATIVES OF BOTH TH E SIDES, THE ISSUES INVOLVED IN GROUND NO. 3 & 4 OF THE ASSESSEE S APPEAL FOR A.Y. 2006-07 ARE SIMILAR TO THE ISSUES INVOLVED IN GROUND NO. 3 & 4 OF THE ASSESSEES APPEAL FOR A.Y. 2005-06 EXCEPT TH AT THE CLAIM OF THE ASSESSEE FOR ALLOCATION OF ADMINISTRATIVE EXPEN SES AGAINST INCIDENTAL ACTIVITIES IS ALSO NOT ALLOWED IN A.Y. 2 006-07 WHEREAS 13 ITA NOS. 2944 & 2945/MUM/10 THE SAME WAS ALLOWED BY THE A.O. HIMSELF IN A.Y. 20 05-06. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ONLY TH IS ASPECT OF THE MATTER MAY BE RESTORED TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRESH AFTER TAKING INTO CONSIDERATION THE ASSESSME NT MADE FOR A.Y. 2005-06 ON SIMILAR ISSUE AND AFTER VERIFYING OF THE RELEVANT FACTS. AS THE LD. D.R. HAS ALSO NOT RAISED ANY OBJECTION I N THIS REGARD, WE RESTORE THIS LIMITED ISSUE TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRESH. AS REGARDS THE CLAIM OF THE ASSESSEE F OR ALLOCATION OF COMMON COSTS TOWARDS INTEREST AND DIVIDEND INCOME, WE FOLLOW OUR CONCLUSION DRAWN IN A.Y. 2005-06 AND DECIDE THIS IS SUE AGAINST THE ASSESSEE. GROUND NO. 3 & 4 OF THE ASSESSEES AP PEAL FOR A.Y. 2006-07 ARE ACCORDINGLY TREATED AS PARTLY ALLOWED F OR STATISTICAL PURPOSE. 19. GROUND NO. 5 RAISED IN THE APPEAL OF THE ASSESS EE READS AS UNDER:- 5. ON THE FACTS AND AS PER PROVISIONS OF ACT CI T (A) HAS ERRED IN CONFIRMING THE A.O.S ACTION OF RE-ADJ USTING THE TURNOVER BY REDUCING RS. 73.52 CRORES FROM CORE SH IPPING. 20. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT THE FOLLOWING ITEMS OF INCOME WERE REDUCED BY THE A.O. AS WELL AS THE LD. CIT(A) FROM THE TURNOVER OF CORE SHIPPIN G WHILE COMPUTING THE EXCESS OF INCIDENTAL SHIPPING INCOME: - ( AMOUNT IN CRORES) PROFIT ON SALE OF SHIPS 12.10 EXCESS PROVISION WRITTEN BACK 23.94 SUNDRY RECEIPTS (CORE SHIPPING) 11.11 SUNDRY CREDIT BALANCES WRITTEN BACK 0.47 PROFIT ON SALE OF FIXED SHIPS (NON SHIP) 0.29 REIMBURSEMENT FROM MANAGED VESSELS 25.61 AMOUNT REDUCED FROM TURNOVER OF CORE SHIPPING 73.52 14 ITA NOS. 2944 & 2945/MUM/10 21. AT THE TIME OF HEARING BEFORE US, THE LD. REPRE SENTATIVES OF BOTH THE SIDES HAVE AGREED THAT A SIMILAR ISSUE WAS INVOLVED IN ASSESSEES OWN CASE FOR A.Y. 2007-08 AND THE TRIBUN AL VIDE ITS ORDER DTD. 29 TH JULY, 2011HAS DECIDED THE SAME IN RESPECT OF ITEM NO. 2 (EXCESS PROVISION WRITTEN BACK) AND ITEM NO. 4 SUNDRY CREDIT BALANCES WRITTEN BACK) IN FAVOUR OF THE ASSESSEE AN D ITEM NO. 1 (PROFIT ON SALE OF SHIPS) AND ITEM NO. 5 (PROFIT ON SALE OF FIXED SHIPS (NON SHIP) AGAINST THE ASSESSEE FOR THE FOLLOWING R EASONS GIVEN IN PARA 29 AND 39 OF ITS ORDER:- 29. PROVISIONS OF SECTION 115VA PROVIDES THAT THE INCOME FROM BUSINESS OF OPERATING QUALIFYING SHIPS MAY BE COMPU TED IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XII-G, AN D THAT THE INCOME SO COMPUTED SHALL BE DEEMED TO BE THE PROFIT S AND INCOME FROM QUALIFYING SHIPS ARE DEFINED IN SECTION 115VC, AND THERE IS NO DISPUTE ON THIS ASPECT. SECTION 115VE MANDATES T HAT PROFITS FROM BUSINESS OF A COMPANY ENGAGED IN THE BUSINESS OF OPERATING QUALIFYING SHIPS SHALL BE COMPUTED UNDER THE TONNAG E TAX SCHEME. IT ALSO SPECIFIES THAT SUCH BUSINESS OF OPERATING Q UALIFYING SHIPS SHALL BE CONSIDERED AS A SEPARATE BUSINESS DISTINCT FROM ALL OTHER ACTIVITIES OR BUSINESS CARRIED ON BY THE COMPANY. T HE MODE OF COMPUTATION OF TONNAGE INCOME IS GIVEN UNDER SECTIO N 115VG. THE TERM RELEVANT SHIPPING INCOME HAS BEEN DEFINED IN SECTION 115VI. IT IS BASICALLY CLASSIFIED INTO TWO CATEGORIES I.E. , PROFITS FROM CORE ACTIVITIES REFERRED TO IN SUB-SECTION 2 AND PROFITS FROM INCIDENTAL ACTIVITY REFERRED TO IN SUB-SECTION 5. THE ISSUE IS , WHETHER THE INCOME BY WAY OF RIGHT BACK OF PROVISIONS OF SUNDRY CREDIT BALANCES AND PRIOR PERIOD EXPENSES CAN BE CONSIDERE D AS INCOME FROM CORE ACTIVITIES OF A TONNAGE TAX COMPANY. IN O UR OPINION, WRITE BACK OF THESE ITEMS IS TO BE CONSIDERED AS IN COME FROM CORE ACTIVITY. IN A GOING CONCERN, SUCH WRITE BACKS AND MAKING OF SUPPLEMENTARY PROVISIONS TAKES PLACE. THE ASSESSING OFFICER AS WELL AS THE COMMISSIONER (APPEALS) HAVE TREATED THE VERY SAME INCOME WHICH IS TAXABLE UNDER SECTION 41(1) DIFFERE NTLY. THE FIRST BEING EXPENDITURE CLAIMED IN PRE-TONNAGE TAX SCHEME ASSESSMENT YEARS AND THE SECOND BEING EXPENDITURE CLAIMED IN P OST TONNAGE TAX SCHEME ASSESSMENT YEARS. SUCH A SEGREGATION IS NOT PERMISSIBLE UNDER THE ACT. BOTH THE INCOMES ARE INC OMES FROM CORE ACTIVITY AND JUST BECAUSE TAX RATES DIFFERENT, THEY CANNOT BE TREATED AS NON-BUSINESS INCOME. THE ASSESSING OFFIC ER AS WELL AS THE COMMISSIONER (APPEALS) SEEM TO HAVE BEEN INFLUE NCED BY THE FACT THAT THE ASSESSEE HAS AN INCOME OF ` 800 CRORE S IN ITS PROFIT & LOSS ACCOUNT AND WHEREAS HE HAS OFFERED ONLY ` 18 C RORES TO TAX UNDER THE TONNAGE TAX SCHEME. THE DECISION WHETHER A PARTICULAR INCOME HAS TO BE BROUGHT TO TAX OR NOT, CANNOT BE B ASED ON SUCH A 15 ITA NOS. 2944 & 2945/MUM/10 VIEW OF THE MATTER. THE LEGISLATURE IN ITS WISDOM P ROVIDED THE MANNER OF COMPUTATION OF INCOME UNDER THE TONNAGE T AX SCHEME. IN SECTION 115VA, IT IS CLEARLY PROVIDED THAT SECTI ONS 28 TO 43C WOULD NOT OVER RIDE THE COMPUTATION OF PROFITS AND GAINS UNDER SECTION 115VA. AS SECTION 41(1) FALLS WITHIN SECTIO NS 28 TO 43C, NO SEPARATE ADDITION UNDER THAT SECTION CAN BE MADE . AS SECTION 41(1) SEEKS TO BRING TO TAX CERTAIN SPECIFIED ITEMS OF RECEIPTS UNDER THE HEAD PROFITS AND GAINS OF BUSINESS THE SCHEME SHOUL DNOT BE INVOKED WHILE COMPUTING PROFITS AND GAINS OF BUSINE SS UNDER CHAPTER-XII-G. HENCE, WE ARE OF THE OPINION THAT TH E ARGUMENT OF THE ASSESSEE SHOULD SUCCEED. 39. COMING TO GROUND NO.10, AS ALREADY STATED, THE ASSESSEE HAS NO OTHER ACTIVITY WHICH WOULD RESULT IN INCOME. IT ALSO DOES NOT HAVE ANY OTHER BUSINESS. THUS, THE INCOME IS FR OM CORE ACTIVITY ONLY. NEVERTHELESS, THE INCOME IN QUESTION IS TAXABLE UNDER THE HEAD CAPITAL GAINS AND DOES NOT FALL WITHIN THE AMBIT OF SECTIONS 28 TO 43C. THUS, THE RECEIPT CANNOT BE CONSIDERED AS TURNOVER IN VIEW OF THE PROVISIONS OF SECTION 115VA AND CONSEQUENTLY OUT OF THE PURVIEW OF CHAPTER-XII-G. I N VIEW OF THE ABOVE DISCUSSION, WE UPHOLD THE FINDING OF THE ASSE SSING OFFICER IN THIS REGARD. 22. RESPECTFULLY FOLLOWING THE TRIBUNALS ORDER DAT ED 29 TH JULY, 2011 (SUPRA) IN ASSESSEES OWN CASE FOR A.Y. 2007-0 8, WE UPHOLD THE ACTION OF THE AUTHORITIES BELOW IN REDUCING THE PROFIT ON SALE OF SHIPS AND FIXED SHIPS FROM THE TURNOVER OF CORE SHI PPING. THE ACTION OF THE AUTHORITIES BELOW IN REDUCING THE EXC ESS PROVISION WRITTEN BACK AND SUNDRY CREDIT BALANCES WRITTEN BAC K, HOWEVER, IS SET ASIDE AND THE A.O. IS DIRECTED TO INCLUDE THE S AID INCOME IN THE TURNOVER OF CORE SHIPPING. AS REGARDS ITEM NO. 3 (S UNDRY RECEIPTS FROM CORE SHIPPING) AND ITEM NO. 6 (REIMBURSEMENT F ROM MANAGED VESSELS), THE LD. COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT NEITHER THE A.O. NOR THE LD. CIT(A) HAS EXAMINED TH E RELEVANT DETAILS PLACED AT 157 OF THE PAPER BOOK AND URGED T HAT THE MATTER MAY BE SENT BACK TO THE A.O. FOR DECIDING THE SAME AFRESH AFTER VERIFYING THE SAID DETAIL. AS THE LD. D.R. HAS NO O BJECTION IN THIS REGARD, THE ISSUE RELATING TO INCLUSION OR EXCLUSIO N OF ITEM NO. 3 & 6 IS RESTORED TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRESH 16 ITA NOS. 2944 & 2945/MUM/10 AFTER VERIFYING THE SAID DETAILS. GROUND NO. 5 OF T HE ASSESSEES APPEAL FOR A.Y. 2006-07 IS THUS PARTLY ALLOWED. 23. GROUND NO. 6 RAISED BY THE ASSESSEE READS AS UN DER:- 6. ON THE FACTS AND AS PER PROVISIONS OF ACT CI T (A) WHILE CONFIRMING THE A.O.S ACTION OF RE-ADJUSTMENT IN TURNOVER OF CORE SHIPPING AND REJECTING APPELLANTS SUBMISSION, HAS ERRED: 6.1 IN IGNORING THAT AO. HAS COMMITTED THE ARITHMET IC TOTALING ERRORS OF RS. 41.62 LACS IN THE ASSESSMENT ORDER, 6.2 IN IGNORING AND OVERLOOKING THE FACT THAT THE N ATURE OF INCOMES REDUCED FROM THE TURNOVERS OF CORE SHIPPING ARE FROM THE BUSINESS OF OPERATION OF QUALIFIED SHIPS. 24. AT THE TIME OF HEARING BEFORE US, THE LD. COUNS EL FOR THE ASSESSEE HAS SUBMITTED THAT CERTAIN FACTUAL MISTAKE S COMMITTED BY THE A.O. IN COMPUTING THE TURNOVER OF THE CORE SHIP PING ACTIVITIES WERE POINTED OUT BY THE ASSESSEE BEFORE THE LD. CIT (A) AND THE DIRECTION WAS GIVEN BY THE LD. CIT(A) VIDE HIS IMPU GNED ORDER TO THE A.O. TO VERIFY AND CORRECT THE SAID MISTAKES. HE H AS SUBMITTED THAT THE A.O., HOWEVER, HAS NOT COMPLIED WITH THE D IRECTION OF THE LD. CIT(A) AND A FRESH DIRECTION MAY THEREFORE BE G IVEN TO THE A.O. TO CORRECT THE MISTAKES POINTED OUT BY THE ASSESSEE AFTER VERIFICATION. WE ACCORDINGLY DIRECT THE A.O. TO RE CTIFY THE MISTAKES, IF ANY, AS POINTED OUT BY THE ASSESSEE IN WORKING O F TURNOVER OF CORE SHOPPING ACTIVITIES AFTER VERIFICATION. GROUN D NO. 6 OF THE ASSESSEES APPEAL IS ACCORDINGLY TREATED AS ALLOWED . 25. AS REGARDS GROUND NO. 7 & 8 OF THE ASSESSEES A PPEAL FOR A.Y. 2006-07, IT IS OBSERVED THAT THE ISSUE INVOLVED THE REIN RELATING TO THE ASSESSEES CLAIM U/S 90 AND 91 OF THE ACT ON AC COUNT OF FOREIGN TAXES PAID OUTSIDE INDIA IS SIMILAR TO THE ONE INVO LVED IN GROUND NO. 5 & 6 OF THE ASSESSEES APPEAL FOR A.Y. 2005-06 . FOLLOWING OUR CONCLUSION DRAWN IN A.Y. 2005-06, WE RESTORE THIS I SSUE TO THE FILE 17 ITA NOS. 2944 & 2945/MUM/10 OF THE A.O. FOR DECIDING THE SAME AFRESH AFTER VERI FYING THE RELEVANT DETAILS. GROUND NO. 7 & 8 OF THE ASSESSEES APPEAL FOR A.Y. 2006- 07 ARE ACCORDINGLY TREATED AS ALLOWED FOR STATISTIC AL PURPOSE. 26. THE ISSUES RAISED IN GROUND NO. 9 OF THE ASSESS EES APPEAL RELATING TO INTEREST U/S 244A AND 234D OF THE ACT A RE CONSEQUENTIAL AND THE A.O. IS ACCORDINGLY DIRECTED TO ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE. 27. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE TREATED AS PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH, 2014. & 1 2 2160362014 & SD/- SD/- (VIVEK VARMA) (P.M. JAGTAP ) JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 2 DATED 21-3-2014. ../ R.K. SR. PS ' #%& '& / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $%# / THE RESPONDENT. 3. ; () / THE CIT (A) - 24 , MUMBAI 4. ; /CIT LTU, MUMBAI 5. $? , + ? , / DR, ITAT, MUMBAI H BENCH 6. / GUARD FILE. / BY ORDER, % $ //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI