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2017 (11) TMI 1008 - HC - Income TaxDisallowance of deduction claimed u/s 80-IA(4) - income derived from the industrial undertaking of container freight station at JNPT - Held that - This issue is squarely covered against the Revenue in light of the decision of the Delhi High Court in the case of Container Corporation of India Ltd. v. Asst. CIT 2012 (5) TMI 260 - DELHI HIGH COURT as well as CIT v. Continental Warehousing Corporation (Nhava Sheva) Ltd. reported in 2015 (5) TMI 656 - BOMBAY HIGH COURT . In the aforesaid two decisions, the Delhi High Court as well as the Bombay High Court, after considering the Central Board of Direct Taxes Circular No. 10 of 2005, dated December 16, 2005 have specifically observed and held that looking to the facilities provided by the container freight station, the container freight station is an inland port as it carries out functions of warehousing, customs clearance and transport of goods from its location to sea-port and vice versa by rail or by trucks in containers. Under the circumstances, the learned Tribunal has rightly deleted the disallowance of deduction claimed by the assessee under section 80-IA(4) of the Act. - Decided in favour of assessee.
Issues:
Disallowance of deduction claimed under section 80-IA(4) of the Income-tax Act, 1961. Analysis: The case involved the disallowance of a deduction claimed by the assessee under section 80-IA(4) of the Income-tax Act, 1961, for the assessment year 2010-11. The assessee had set up a container freight station at Nhava Sheva Port and claimed a deduction of ?40,05,24,711. The Assessing Officer disallowed the claim, stating that the station was not a specified infrastructure facility eligible for the deduction under section 80-IA(4) of the Act. The Commissioner of Income-tax (Appeals) allowed the appeal by the assessee, leading to the Revenue filing a tax appeal. The Tribunal upheld the decision of the Commissioner, prompting the Revenue to challenge the judgment. The main question before the court was whether the assessee was entitled to the deduction under section 80-IA(4) of the Act for the income derived from the industrial undertaking of the container freight station at JNPT. The Assessing Officer relied on a certificate from JNPT stating that the station was not on port land. However, the Commissioner and the Tribunal both ruled in favor of the assessee, leading to the current appeal. The court noted that similar issues had been decided against the Revenue in previous cases, such as the Delhi High Court's decision in Container Corporation of India Ltd. v. Asst. CIT and the Bombay High Court's decision in CIT v. Continental Warehousing Corporation (Nhava Sheva) Ltd. These judgments emphasized that a container freight station qualifies for the deduction under section 80-IA(4) due to its functions related to warehousing, customs clearance, and transport of goods. Ultimately, the court upheld the Tribunal's decision to delete the disallowance of the deduction claimed by the assessee under section 80-IA(4) of the Act. The court found no substantial question of law warranting interference and dismissed the tax appeal accordingly.
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