DCIT, CHENNAI V. Buhari Holdings Pvt. Ltd., CHENNAI

ITA 296/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8800 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 09-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 12-02-2016
• Court: TRIBUNAL
• Department Lawyers: V VIVEKANANDAN
• Assessee Lawyers: N C PRABHAKAR
• Section: 143(3); 115JB

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 296 /MDS/201 6 / ASSESSMENT YEAR :20 1 1 - 1 2 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1 ( 2 ), CHENNAI 600 034. VS. M/S. BUHARI HOLDINGS PVT. LTD., NO.5, I FLOOR, MOORES ROAD, BUHARI BUILDI NG, C HENNAI 60 0 006 . [PAN: A A A C B2679M ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI V. VIVEKANANDAN, CIT / RESPONDENT BY : SHRI N.C. PRABHAKAR , ADVOCATE / DATE OF HEARING : 0 9 . 0 6 .201 6 / DATE OF P RONOUNCEMENT : 05 . 0 8 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1 , C HENNAI DATED 09 . 0 9 .201 5 RELEVANT TO THE ASSESSMENT YEAR 20 1 1 - 1 2 . THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE COMPANY IS ELIGIBLE FOR TONNAGE TAX CLAIM. 2. BRIEF FACTS OF THE CASE ARE T HAT THE ASSESSEE IS ENGAGED IN SHIPPING BUSINESS AND FINANCING AND FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR I.T.A. NO . 296 /M/ 1 6 2 2011 - 12 ON 23.09.2011 ADMITTING A TOTAL INCOME OF .95,47,147 / - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] AND COMPLETED ON 29.8.2012. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143 ( 2) WAS ISSUED ON 13. 8.2012. AFTER CONSIDERING THE DETAILS FILED BY THE ASSESSEE AND ALSO CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE A SSESSING O FFICER HAS COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ON 21.3.2014 DETERMINING THE TOTAL INCOME OF THE ASSESSEE A T .6,68,75,999 / - AND STCG OF .20,91,12,276 / - AND .11,49,53,061 U NDER SECTION 115JB OF THE ACT BY MAKING VARIOUS DISALLOWANCES . 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALS O FACTS OF THE CASE, THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. 4. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND CHALLENGED THAT THE ASSESSEE IS NOT ELIGIBLE FOR TONNAGE TAX CLAIM. 5. AT THE TIME OF HEARING, THE LD. COU NSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE RAISED BY THE REVENUE IS SQUARELY COVERED AGAINST THE REVENUE BY THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR EARLIER ASSESSMENT YEARS AND PLEADED THAT THE APPEAL FILED B Y THE REVENUE SHOULD BE DISMISSED. I.T.A. NO . 296 /M/ 1 6 3 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ONLY GROUND RAISED BY THE REVENUE IS WHETHER THE ASSESSEE IS ELIGIBLE FOR TONNAGE TAX SCHEME AS THE ASSE SSEE IS ONLY A FRACTIONAL OWNER OF THE SHIP AND THUS SATISFY THE PROVISIONS OF SECTION 115VC(C) OF THE ACT. IN THIS CASE, T HE A SSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS ADMITTED SHIPPING INCOME OF .9,06,15,805 / - AND CLAIMED SHIPPING EXPENSES OF .4,05,54,265 / - AND PAID TONNAGE TAX OF .1,94,730 UNDER SECTION 115VG OF THE ACT. AFTER EXAMINING THE CLAIM OF THE ASSESSEE, THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE HAS NOT QUALIFIED UNDER TONNAGE TAX SCHEME UNDER SECTION 115VP(3) OF THE ACT. BY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR EARLIER ASSESSMENT YEARS, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW THE BENEFIT OF TONNAGE TAX SCHEME UN DER SECTION 115VG OF THE ACT. WE HAVE ALSO GONE THROUGH THE ORDERS OF THE TRIBUNAL FOR EARLIER ASSESSMENT YEARS 2006 - 07 TO 2008 - 09 AND 2010 - 11 IN I.T.A. NOS. 2145 TO 2148/MDS/2013, WHEREIN THE TRIBUNAL HAS HELD AS UNDER: 9. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO THE GROUNDS RAISED IN THE APPEAL, FINDINGS OF THE CIT(A) AND ARGUMENTS OF BOTH PARTIES, WE FIND THAT IN ASSESSMENT YEAR 2009 - 10, THE 'TRIBUNAL' (SUPRA) HAS DECIDED THE VERY ISSUE IN FAVOUR OF THE ASSESSEE. THE R EVENUE SUBMITS AS PER GROUND NO. 2. 6 THAT 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 ACCEP TANCE. AFTER GOING THROUGH THE RELEVANT PROVISION, IT NOWHERE COMES OUT THAT IN CASE OF JOINTED OWNED SHIP BY TWO OR MORE COMPANIES, THE SAME HAS TO BE OPERATED SPECIFICALLY BY EACH OF THE CO - OWNERS/ASSESSE E S. THEREFORE, THIS GROUND ALSO FAILS. I.T.A. NO . 296 /M/ 1 6 4 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. ACCORDINGLY, THE CIT(A) S FINDINGS ARE AFFIRMED AND THE APPEAL I.T.A. NO. 2145/MDS/2013 IS DISMISSED. 7. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL, WHILE UPHOLDING THE FINDINGS OF THE LD. CIT(A), WE DISMISS THE APPEAL FILED BY THE REVENUE. 8 . IN THE RESULT, THE APPEAL FILED BY THE RE VENUE IS DISMISSED . ORDER PRONOUNCED ON THE 05 TH AUGUST , 20 16 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 05. 0 8 .201 6 VM/ - / COPY TO: 1. / APPE LLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.