All Cargo Gati Limited Vs ITO (ITAT Hyderabad)
ITAT Hyderabad held that as per the provisions of section 115VG of the Income Tax Act, once the assessee opts for the Tonnage Tax Scheme, the assessee cannot take the shield of taking the deduction of any other expenditure.
Facts- The case of the assessee was selected for scrutiny and notice u/s 143(2) of the Act was issued and served on the assessee. Thereafter, notices u/s 143(2) and 142(1) of the Act were issued along with questionnaire. AO completed the assessment by making disallowance of Rs.65,04,518/- towards interest on FCCB, Rs.27,10,61,790/- towards Hedging loss, Rs.30,09,100/- towards expenditure as per provisions of Section 14A of the Act and Rs.9,88,343/- towards excess depreciation on UPS and passed assessment order u/s 143(3) of the Act dt.30. 12.2011 reducing the loss to Rs.1,57,77,520/-.
CIT(A) granted partial relief. Being aggrieved, the present appeal is filed.
Conclusion- Held that once specified provisions deal with the subject and have been accepted by the assessee, the assessee is precluded from taking the deduction of any other expenditure under any other provisions of the Act against the Tonnage income. In our view, the provisions of section 115VG of the Income Tax Act, 1961 are complete, and once the assessee opts for the Tonnage Tax Scheme, the assessee cannot take the shield of taking the deduction of any other expenditure. Hence, we are of the opinion that the assessee is not entitled to deduction as claimed by the assessee towards interest paid being the pro rata term paid on FCCD.
