M/S. BENGAL TIGER LINE PRIVATE LIMITED,CHENNAI vs. CORPORATE CIRCLE 1(2), CHENNAI

This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in Order No.ITBA/NFAC/S/250/2023- 24/1058015908 (1) dated 17.11.2023. The assessment was framed by the Income Tax Officer, Corporate Ward-1(2), Chennai for the - 2 - 2015-16 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 20.11.2017.

The first issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the AO in disallowing the expenses claimed relating to ‘Dock and Logistics Expenses’ and debited to Profit & Loss account under the head ‘other expenses’ amounting to Rs.24,07,386/-. For this, assessee has raised various grounds which are argumentative, factual and hence, need not be reproduced.

Brief facts are that the AO on perusal of profit & loss account of the assessee noticed that the assessee has claimed ‘Dock and Logistics Expenses amounting to Rs.24,07,386/- under the head ‘other expenses’. The AO required the assessee to produce details vide letter dated 15.09.2017. The assessee made a general reply that the assessee company is engaged in providing agency services to its AEs for transshipment of containers from/to the Indian ports to/from the hub ports of Singapore, Colombo, Port-Kelang, etc. The company provides documentation and administration support in relation to vessel traffic and co-ordination with various government authorities in order to obtain necessary clearances, certificates,

The CIT(A)-NFAC also confirmed the action of the AO exactly on identical finding by observing as under:- “On going through the facts of the case, it is seen that the appellant case was taken for limited scrutiny. Consequent to above statutory notices were issued from time to time to the appellant by the AO. Since the assessee failed to produce the desired details/documents in support of its claim during the assessment proceedings. It was seen that the appellant has not complied and had not filed any submission to substantiate its claim during appellate proceedings and had filed the present appeal merely to file an appeal, since the appellant has nothing to say the proceedings are being completed on the basis of material on record and merit.

We have perused the case records including the assessment order and the order of CIT(A)-NFAC. We have heard ld.Senior DR, Shri P. Sajit Kumar, JCIT as well as the ld.counsel for the assessee Ms.Sonali as well as Shri S.P.Chidambaram, Advocates. The assessee before us contended that it has incurred business expenditure in the nature of dock and logistics charges amounting to Rs.24,07,386/- which are expenses in the nature of port clearance charges, documentation charges, expenses towards obtaining certificates, expenses on obtaining pass renewals for vessels, filing of tax returns and customs clearances. These expenses are incurred in connection with obtaining clearance for the vessels to set sail during each voyage. It was argued that these are expenditure incurred for the very purpose of business but could not produce the evidence. The ld.counsel for the assessee only sought that the matter be restored back to the file of the CIT(A) and assessee is ready to produce evidences in regard to these expenses and services rendered. In the interest of justice, we are inclined to grant one

The next issue in this appeal of assessee is as regards to the order of CIT(A)-NFAC confirming the disallowance of sum of Rs.29,96,938/- being interest written off on loan granted to Director. For this, assessee has raised various grounds, which are argumentative, exhaustive and hence, need not be reproduced.

Brief facts are that the assessee company has granted loan of Rs.40,00,000/- to one of its Director of the company Shri B. Sridhar during the financial year 2007-08. The assessee filed copy of Minutes of Board Meeting authorizing the grant of loan and as per the initial terms of arrangement, the aforesaid loan was required to be repaid by end of December, 2007. The Board of Directors extended the time for repayment upto December, 2013 time and again. The interest was accrued on such loan and the interest income in the respective years was booked in the Profit & Loss

The CIT(A)-NFAC confirmed the action of the AO by observing as under:-

We have heard rival contentions and gone through facts and circumstances of the case. The ld.counsel for the assessee before us filed complete details in its paper compilation of 109 pages, wherein it is established that the loan was repaid amounting to Rs.10,00,000/- in year ending 31.03.2012 and amount of Rs.30,00,000/- in the year ending 31.03.2014. The ld.counsel for the assessee before us argued that no interest has been received by assessee company and hence, the assessee company has passed a resolution in its board meeting for waiver of this interest and accordingly, the same was claimed as write off. We noted that the CIT(A)-NFAC has not at all given any finding on the claim of write off of this amount of Rs.29,96,938/- but stated that the assessee has not filed desired documents in support of its claim during

In the result, the appeal filed by the assessee is allowed for statistical purposes..