COMMISSIONER OF INCOME TAX, KOCHI Vs. TRANS ASIAN SHIPPING SERVICES (P) LTD.
SUPREME COURT OF INDIA
Commissioner Of Income Tax, Kochi
Trans Asian Shipping Services (P) Ltd.
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(1.) Leave granted. Matter finally heard as the case was fixed for final hearing.
(2.) Chapter XIIG of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') contains special provisions for assessments relating to income of shipping companies. Under this Chapter, shipping companies are given a choice to either get income from the shipping business computed in accordance with the provisions contained in the Act meant for computation of income in respect of business or profession or opt for methodology of computing income as per the special formula provided in that Chapter which accords a different treatment and different manner of computation of income for the shipping business.
(3.) Chapter IV of the Act deals with 'Computation of Total Income' and as per the scheme of the Act, such a computation of total income is governed by five heads which are provided in Section 14 of the Act. These are: (i) Salaries; (ii) Income from House Property; (iii) Profits and Gains of Business or Profession; (iv) Capital Gains and (v) Income from Other Sources. Thereafter, manner of computation of the income under the aforesaid heads is stipulated in various sections falling under Chapter IV. As far as Income from Profits and Gains of Business or Profession is concerned, Sections 28 to 44DB of the Act contain the procedure for computation of income under this head. Therefore, any person, natural or juristic, who earns income from business in India is supposed to get the income from the said business computed in the manner provided in those sections. However, Chapter XIIG makes an exception thereto by carving out special provisions relating to income of shipping companies. It would mean that those companies which are shipping companies are permissible to get their income computed under the said Chapter.
Section 115VA of the Act gives this option and reads as under:
"115VA. Computation of profits and gains from the business of operating qualifying ships. - Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of a company, the income from the business of operating qualifying ships, may, at its option, be computed in accordance with the provisions of this Chapter and such income shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession".;
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