DCIT-5(3)(1), MUMBAI vs. TAG OFFSHORE LTD. C/O DUFF & PHELPS INDIA PVT LTD. (SUDIP BHATTACHARYA LIQUIDATOR- ), MUMBAI

The brief facts of the case shows that assessee is a company engaged in the business of operating and chartering of ships and vessels and providing services to ONGC and various Sea Port authorities. As the assessee is qualifying tonnage tax company under Section 115VC and such scheme is approved in case of the assessee under Section 115VP of the Income-tax Act, 1961 (the Act) as per order dated 30th May, 2014 for ten years up to 2024-25. Therefore, the assessee filed its return of income for A.Y. 2018-19 on 31st October, 2018 at the total income of ₹ 75,02,850/-.

The central processing centre Bangalore passed an intimation under Section 143(1) of the Act on 9th March, 2020, wherein the total income of the assessee was determined at ₹134,87,73,250/-. The city) that the central processing Centre did not consider the taxability of the income of the assessee under the tonnage tax scheme.

Against this, assessee preferred the appeal before the learned CIT (A). Assessee was aggrieved where the income of the assessee was computed under the normal provisions disallowing depreciation allowance and disallowing expenses and thereafter, computed the income of the assessee as per normal computation mechanism. It was the claim that assessee is an eligible Tonnage tax company and its computation of total income is required to be computed on the basis of qualifying ship income. It was also submitted that when communication was received about the proposed adjustment, assessee submitted that CIRP proceedings has been initiated against the company with effect from 24th April, 2019 and liquidation has been ordered by NCLT as per order dated 26th September, 2019. Therefore, no information could be provided, however, assessee submitted complete detail stating that assessee is a Tonnage tax company and income is chargeable to tax as per chapter XII-G and no disallowance can be made under Section 28 to 43C of the Act.

The learned CIT (A) following the decision of the co-ordinate Bench in dated 22nd May, 2019, held that assessee company is a

The learned Assessing Officer aggrieved with appellate order preferred the appeal before us.

We have heard the learned Departmental Representative. None appeared on behalf of the assessee. Therefore, the appeal is decided on the merits of the case.

The learned CIT (A) has categorically noted that assessee is a qualifying Tonnage tax company and its claim is also approved as per order dated 30th May, 2014. To the Tonnage tax company, special provision are applicable and the profits are computed from operating qualifying ships on the Tonnage income of the assessee under Section 115VP of the Act. The provisions of Section 28 to 43C of the Act are not applicable while computing the Tonnage tax income. The claim of the depreciation is also not separately allowed. It is not the case of the learned Assessing Officer that the certificate for Tonnage tax scheme originally granted to the assessee on 17th February, 2005 and subsequently, renewed on 30th May, 2014 is not applicable to the assessee. In view of the above facts, the disallowance made by the Central Processing Centre (CPC) of depreciation and various expenditure are correctly deleted. In view of this, we do not find any infirmity in the order of the learned CIT (A) in deleting the disallowance of expenditure as well as the depreciation made by CPC. We confirm the order of the learned CIT (A) and ground no.1 and 2 of appeal of learned Assessing Officer are dismissed.

In the order, the appeal filed by the learned Assessing Officer is dismissed.