Trans Asian Shipping Services (P.) Ltd. v. Dy. CIT (2013) 55 SOT 1 (Cochin) (Trib.)

S.115VA: Shipping companies - Qualifying ships – Computation- Slot charter -Assessee is required to produce

'valid certificate in respect of such ships.

The assessee-shipping company was operating its own ships and had also chartered in ships under 'slot charter' (part of ship) agreement. In order to avail benefit of Chapter XII-G, the assessee submitted the 'valid certificate' only for its own ships and not in respect of chartered ships, as according to it 'valid certificate' was required only for own ship and ships chartered in fully and there was no requirement to submit the 'valid certificate' in respect of ships chartered under 'slot charter' agreement, since income for full chartered ships was computed on basis of 'net tonnage' shown in valid certificate and income from ships chartered under 'slot charter' was computed on deemed tonnage. The Assessing Officer did not accept said submission and denied the benefit of Chapter XII-G to slot charter income. On appeal, the Commissioner (Appeals) upheld the denial. On second appeal the Tribunal held that The benefit of provisions of Chapter XII-G can be availed only by a 'tonnage tax company' (shipping company) in respect of the business of operating 'Qualifying ships'. 'Operation of Qualifying ships' is a mandatory condition for availing the benefit of Chapter XII-G. Undoubtedly, the assessee opting to avail the benefit of Chapter XII-G has to necessarily show that it has generated income from the business of operation of 'Qualifying ships'. It is necessary to show that the ships chartered in under 'Slot Charter' arrangement are also 'Qualifying ships' by producing the 'Valid certificate'. The assessee heavily placed reliance on the provisions of section 115VG,'Deemed tonnage' defined in section 115VA and 'Specific shipping trades' defined in section 115VI and also on clause 10 of Form No. 66 to contend that there is no necessity to furnish the 'Valid certificate' in respect of ships chartered in under 'slot charter' arrangement. The net result of the said contention is that the ship chartered in under 'slot charter' arrangement need not be a 'Qualifying ship'. (A. Y. 2005-06 & 2008-09)