COMMISSIONER OF INCOME TAX Vs. SHOWA LINE LTD.

JUDGEMENT

(1.) ON an application under Sec. 256(1) of the Income Tax Act, 1961, the Tribunal has referred the following question set out at page 1 of the paper book for our opinion :

(2.) THE assessee is a non -resident shipping company of Japan. The return of income was filed on August 23, 1988, showing total income at Rs. 1,13,92,563. The assessee earns income from the collection of freight from tramp vessels as well as liner vessels and also income from the detention charges during the year. During the course of assessment, the Assessing Officer noticed that the assessee has claimed that demurrage charges received was not a part of the taxable income, as the same is in the nature of insurance and not taxable under the Income Tax Act, 1961. The Income Tax Officer has rejected the claim of the assessee. According to him, as per the provisions of Sec. 44B, the demurrage charges are taxable.

(3.) IN appeal before the Commissioner of Income Tax (Appeals), the Commissioner of Income Tax (Appeals) has also confirmed the view taken by the Assessing Officer.