THE GREAT EASTERN SHIPPING CO. LTD,MUMBAI vs. THE ASSTT. CIT CIRCLE 5(3)(2), MUMBAI
What did the Tribunal hold?
The Tribunal noted that the Assessing Officer and CIT(A) had not considered previous ITAT orders in the assessee's own case. Therefore, the matters were restored to the CIT(A) for fresh adjudication in light of those decisions.
What were the facts?
The assessee appealed against disallowances made under Section 14A read with Rule 8D, including issues related to interest expenditure, administrative expenses, and book profits. The assessee argued that these issues were covered by previous ITAT decisions in their own case.
What were the issues?
Whether disallowances under Section 14A and Rule 8D, including computation of interest and administrative expenses, and their applicability to book profits under Section 115JB, were correctly decided without considering previous ITAT rulings in the assessee's own case.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI PRABHASH SHANKAR
Heard together (3 matters)
Read from the judgment's own cause title. This page is filed under one of them.
PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER: These three appeals filed by the assessee, are directed against the separate impugned orders dated 23.10.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as 'the learned CIT(A)'], pertaining to AYs 2016-17, 2017-18 and 2020-21.
Since common and identical issues are involved in all these three appeals, they were heard together and are being disposed of by this common order for the sake of convenience and brevity.
The grounds of appeal raised by the assessee in ITA No. 8566/Mum/2025 for AY 2016-17 read as under:
1) The learned Commissioner of Income Tax (Appeals) erred in not following the decision of the Hon'ble Income Tax Appellate Tribunal in the Appellant's own case for the Assessment Years 2008-09 to 2015-16 and in confirming the disallowance under Section 14A of the Act read with Rule 8D as computed by the Assessing Officer.
2) The learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance computed by the Assessing Officer under Section 14A of the Act read with Rule 8D(2)(ii) at Rs.28,15,57,793/-, by considering the indirect interest expenditure on the tonnage and non-tonnage tax activities at Rs.1,60,65,64,282/-, as against the indirect interest expenditure of Rs. Nil, in view of the following:
a) The Assessing Officer has erroneously considered the interest expenditure of the tonnage tax business of the Appellant amounting to Rs. 1,04,42,38,878/-, without appreciating the fact that such interest expenditure pertaining to the tonnage tax profits was already excluded from the total income and that such interest expenditure was not claimed against the exempt income.
b) The Assessing Officer erred in not reducing the interest expenditure of Rs.56,23,25,404/- from the non-tonnage tax interest expenditure, which was incurred on borrowings used for earning taxable income in Mutual Fund Growth Scheme units as also bank deposits.
c) The Assessing Officer erred in applying Section 14A of the Act in respect of investments on which no dividend income was received by the Appellant. The Appellant submits that the disallowance under Section 14A be recomputed by excluding those investments on which no dividend income was received during the year.
d) The Assessing Officer failed to appreciate that there are no qualifying investments for the purpose of computing the disallowance under Rule 8D(2)(ii) as the investments in equity and preference shares of Greatship (India) Ltd. have already been considered when computing the disallowance under Rule 8D(2)(1).
3) The learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance of administrative and other expenditure aggregating to Rs.8,45,81,942/- as computed by the Assessing Officer in accordance with sub-clause (i) and (iii) of Clause 2 of Rule 8D towards the earning of exempt dividend income and disallowing the same under Section 14A of the Act, in view of the following:
a) The Assessing Officer failed to appreciate the fact that the disallowance of administrative expenditure computed in accordance with Rule 8D(2)(i) and (iii) cannot exceed the actual aggregate administrative expenditure incurred by the Treasury Division of the Appellant of Rs.88,88,679/-
b) The Assessing Officer erred in applying Section 14A of the Act in respect of investments on which no dividend income was received by the Appellant. The Appellant submits that the disallowance under Section 14A be recomputed by excluding those investments on which no dividend income was received during the year.
c) The Assessing Officer failed to appreciate that there are no qualifying investments for the purpose of computing the disallowance under Rule 8D(2)(iii) as the investments in equity and preference shares of Greatship (India) Ltd. have already been considered when computing the disallowance under Rule 8D(2)(i).
4) The Appellant submits that both the lower authorities erred in holding that the disallowance made under Section 14A of the Act under the normal computation of income is also required to be added back for computing book profits under section 115JB of the Act. The Appellant submits that section 115JB of the Act is a separate code by itself and the provisions of Section 14A and Rule 8D cannot be applied for computing the book profits under section 115JB of the Act.
5) The learned Commissioner of Income Tax (Appeals) erred in not following the decision of the Hon'ble Income Tax Appellate Tribunal in the Appellant's own case for the Assessment Years 2006-07 to 2008-09 and 2013-14 to 2015-16, and in confirming the action of the Assessing Officer in attributing interest expenditure pertaining to the non-tonnage income of the Appellant aggregating to Rs.6,25,69,353/- to the tonnage income of the Appellant.
The Appellant craves leave to add to, alter or amend, the above Grounds of Appeal as and when advised
The grounds raised by the assessee in ITA No. 8567/Mum/2025 for AY 2017-18 read as under:
1) The learned Commissioner of Income Tax (Appeals) erred in not following the decision of the Hon'ble Income Tax Appellate Tribunal in the Appellant's own case for the Assessment Years 2008-09 to 2015-16, and in confirming the disallowance under Section 14A of the Act read with Rule 8D as computed by the Assessing Officer.
2) The learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance of Rs.36,92,85,134/- as computed by the Assessing Officer in accordance with sub-clause (i) and (ii) of Clause 2 of Rule 8D towards the earning of exempt dividend income and disallowing the same under Section 14A of the Act, in view of the following:
a) The Assessing Officer failed to appreciate the fact that the disallowance in accordance with Rule 8D(2)(i) and and (ii) cannot exceed the actual aggregate administrative expenditure incurred by the Treasury Division of the Appellant of Rs.93,48,118/-.
b) The Assessing Officer failed to appreciate that there are no qualifying investments for the purpose of computing the disallowance under Rule 8D(2)(ii) as the investments in equity and preference shares of Greatship (India) Ltd. have already been considered when computing the disallowance under Rule 8D(2)(i).
3) The Appellant submits that both the lower authorities erred in holding that the disallowance made under Section 14A of the Act under the normal computation of income is also required to be added back for computing book profits under section 115JB of the Act. The Appellant submits that section 115JB of the Act is a separate code by itself and the provisions of Section 14A and Rule 8D cannot be applied for computing the book profits under section 115JB of the Act.
4) The learned Commissioner of Income Tax (Appeals) erred in not following the decision of the Hon'ble Income Tax Appellate Tribunal in the Appellant's own case for the Assessment Years 2006-07 to 2008-09 and 2013-14 to 2015-16, and in confirming the action of the Assessing Officer in attributing interest expenditure pertaining to the non-tonnage income of the Appellant aggregating to Rs.5,84,86,217/- to the tonnage income of the Appellant.
The Appellant craves leave to add to, alter or amend, the above Grounds of Appeal as and when advised.
The grounds raised by the assessee in ITA No. 8568/Mum/2025 for AY 2020-21 read as under:
1) The learned Commissioner of Income Tax (Appeals) erred in not following the decision of the Hon'ble Income Tax Appellate Tribunal in the Appellant's own case for the Assessment Years 2008-09 to 2015-16, and in confirming the disallowance under Section 14A of the Act read with Rule 8D as computed by the Assessing Officer.
2) The learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance of Rs.36,92,85,134/- as computed by the Assessing Officer in accordance with sub-clause (i) and (ii) of Clause 2 of Rule 8D towards the earning of exempt dividend income and disallowing the same under Section 14A of the Act, in view of the following:
a) The Assessing Officer failed to appreciate the fact that the disallowance in accordance with Rule 8D(2)(i) and and (ii) cannot exceed the actual aggregate administrative expenditure incurred by the Treasury Division of the Appellant of Rs.93,48,118/-.
b) The Assessing Officer failed to appreciate that there are no qualifying investments for the purpose of computing the disallowance under Rule 8D(2)(ii) as the investments in equity and preference shares of Greatship (India) Ltd. have already been considered when computing the disallowance under Rule 8D(2)(i).
3) The Appellant submits that both the lower authorities erred in holding that the disallowance made under Section 14A of the Act under the normal computation of income is also required to be added back for computing book profits under section 115JB of the Act. The Appellant submits that section 115JB of the Act is a separate code by itself and the provisions of Section 14A and Rule 8D cannot be applied for computing the book profits under section 115JB of the Act.
4) The learned Commissioner of Income Tax (Appeals) erred in not following the decision of the Hon'ble Income Tax Appellate Tribunal in the Appellant's own case for the Assessment Years 2006-07 to 2008-09 and 2013-14 to 2015-16, and in confirming the action of the Assessing Officer in attributing interest expenditure pertaining to the non- tonnage income of the Appellant aggregating to Rs.5,84,86,217/- to the tonnage income of the Appellant.
The Appellant craves leave to add to, alter or amend, the above Grounds of Appeal as and when advised.
At the outset, the Ld. AR appearing for the assessee submitted that the primary issues involved in all these three appeals relate to disallowance under Section 14A of the Act read with Rule 8D, including computation of indirect interest, capping of administrative expenses to the actual treasury expenditure and exclusion of non-dividend-yielding investments; applicability of disallowance under Section 14A read with Rule 8D while computing book profits under Section 115JB of the Act; and reallocation and attribution of interest expenditure between tonnage and non-tonnage tax activities.
The Ld. AR contended that all these issues are squarely covered in the assessee's own case by a series of orders passed by the Coordinate Benches of this Tribunal in earlier assessment years ranging from AY 2006-07 to AY 2015-16. However, according to the Ld. AR, both the Assessing Officer and the Ld. CIT(A) failed to consider and apply the ratio and factual findings rendered by the Coordinate Benches in the assessee's own case for the earlier years. The Ld. AR furnished comparative charts showing each ground and the corresponding orders of the Coordinate Benches deciding the issues in favour of the assessee. He accordingly prayed that the matters be restored to the file of the Ld. CIT(A) with a direction to examine the facts in the light of the orders of the Coordinate Benches rendered in the assessee's own case.
The Ld. DR did not raise any serious objection to restoring the matters to the file of the Ld. CIT(A) for fresh adjudication after verifying the applicability of the decisions of the Coordinate Benches in the assessee's own case.
We have heard the rival submissions and perused the material available on record. It is observed that the grounds raised by the assessee, relating to disallowance under Section 14A read with Rule 8D, adjustment under Section 115JB of the Act, and reallocation of interest between tonnage and non-tonnage tax activities, are stated to have been adjudicated by the Coordinate Benches of this Tribunal in the assessee's own case for the preceding assessment years.
We find that the Assessing Officer as well as the Ld. CIT(A) have not considered the aforesaid orders of the Coordinate Benches in the assessee's own case in the manner contended by the assessee. Since the applicability of the said orders to the facts and figures of the assessment years under consideration requires examination, we deem it appropriate, in the interest of justice, to restore the issues raised in these three appeals to the file of the Ld. CIT(A) for fresh adjudication.
The Ld. CIT(A) is directed to examine the issues afresh in the light of the decisions of the Coordinate Benches rendered in the assessee's own case for the earlier assessment years, after verifying the factual matrix and computations for the years under consideration. The Ld. CIT(A) shall thereafter pass a speaking order in accordance with law, after providing adequate and reasonable opportunity of being heard to the assessee.
The assessee shall place all relevant documentary evidence, orders of the Coordinate Benches and supporting computations before the Ld. CIT(A) and shall cooperate in the proceedings without seeking unnecessary adjournments.
Since the matters are being restored to the file of the Ld. CIT(A) for fresh adjudication, the other grounds raised by the assessee are also restored to his file for adjudication in accordance with law.
Before parting, we make it clear that we have not expressed any opinion on the merits of the issues raised by the assessee, and the Ld. CIT(A) shall adjudicate the same independently in accordance with law.
In the result, the appeals filed by the assessee in ITA Nos. 8566/Mum/2025, 8567/Mum/2025 and 8568/Mum/2025 are allowed for statistical purposes.
Order pronounced in the open court on 10.09.2026.
Sd/- Sd/- PRABHASH SHANKAR SANDEEP GOSAIN ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 10.09.2026 RY-SrPS Copy to: THE GREAT EASTERN SHIPPING CO. LTD, 134A, OCEAN HOUSE, DR ANNIE BESANT 1 ROAD. WORLI MUMBAI, MUMBAI-400018, MAHARASHTRA THE ASSISTANT COMM. OF INCOMET TAX CIRCLE 5(3)(2), 2 ROOM NO. 519, 5 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD., MUMBAI-400020, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE
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