2016 (9) TMI 1579 - AT - Income Tax

Deduction u/s 80-IA - Container Freight Station - AO disallowed the claim of the assessee on the ground that there was no agreement between the assessee and the Government of India or its agency - HELD THAT - Circular No.10 of 2005 said that for the assessment year 2001-02 and for earlier assessment year, a certificate is required from concerned port authority indicating the Container Freight Station forms part of port and there shall be an agreement as infrastructure facility would be transferred to the concerned authority on expiry of time stipulated in the agreement. From the assessment year 2002-03, the CBDT has instructed that what is required for claiming 80-IA deduction is certificate from concerned port authority. This issue was considered by the Madras High Court in CIT v. A.L. Logistics Pvt. Ltd. 2015 (1) TMI 401 - MADRAS HIGH COURT after considering the Public Notification issued by the Commissioner of Customs and approval granted by the State Government, found that the assessee is eligible for deduction under Section 80-IA. Container Freight Station established by the assessee is an extended arm of the port, therefore, eligible for exemption under Section 80-IA of the Act. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. - Decided against revenue.

Summary

Issues:
Deduction under Section 80-IA of the Income-tax Act, 1961.

Issue Analysis:

1. Deduction under Section 80-IA:
The case involved appeals by the Revenue against orders of the Commissioner of Income Tax (Appeals) concerning deduction under Section 80-IA of the Income-tax Act for assessment years 2010-11 and 2011-12. The key contention was whether the assessee, operating a Container Freight Station, was eligible for the deduction without an agreement with the Government of India or its agency. The Departmental Representative argued that such an agreement was a pre-condition for the deduction, citing Section 80-IA(4) of the Act. On the other hand, the counsel for the assessee contended that a certificate from the port authority confirming the Station's affiliation with the port was sufficient, referencing Circular No.10 of 2005. The Tribunal analyzed the relevant provisions of the Act and the circular, emphasizing the necessity of an agreement with the Government for claiming the deduction under Section 80-IA. The Tribunal also referred to a judgment by the Madras High Court in a similar case, where the Court allowed the deduction based on the approval by the State Government and the Commissioner of Customs. Ultimately, the Tribunal upheld the decision of the lower authority, confirming the eligibility of the Container Freight Station for exemption under Section 80-IA, and dismissed the appeals filed by the Revenue.

This detailed analysis of the legal judgment provides a comprehensive overview of the issues involved, the arguments presented by both parties, the relevant legal provisions, and the final decision rendered by the Tribunal, ensuring a thorough understanding of the case and its implications.