2019 (9) TMI 497 - AT - Income Tax

Deduction u/s 80IA(4) - whether assessee engaged in the business of operation of CFS is eligible for claiming deduction u/sec. 80IA (4) or not? - whether definition of 'infrastructural facility' as defined u/s.80IA(4) includes' a port, airport, inland water way, inland port or navigational channel in the sea' but does not include Container Freight Station(CFS)? - HELD THAT - CIT(A) by following the decision of the coordinate bench of the tribunal in assessee‟s own case for the A.Y. 2013-14 2018 (1) TMI 2 - ITAT VISAKHAPATNAM and also case of CIT Vs. Continental Warehousing Corporation 2015 (5) TMI 656 - BOMBAY HIGH COURT as also the judgment of A.L. Logistics Pvt. Ltd. 2015 (1) TMI 401 - MADRAS HIGH COURT correctly directed the Assessing Officer to allow deduction u/sec. 80IA (4) to the assessee. Before us, assessee has relied on the judgment of the Hon'ble Supreme Court in the case of Container Corporation of India 2018 (5) TMI 359 - SUPREME COURT wherein inland container depots are inland ports subject to provisions of section 80IA and deduction can be claimed for income earned out of these depots. - Decided in favour of assessee.

Summary

Issues Involved:
1. Whether the Container Freight Station (CFS) operated by the assessee qualifies as an 'infrastructure facility' under Section 80IA(4) of the Income Tax Act.
2. Whether the income derived from CFS is eligible for deduction under Section 80IA(4)(i) of the Income Tax Act.
3. Interpretation and applicability of various Circulars and decisions regarding the definition of 'infrastructure facility' and 'port.'

Issue-wise Detailed Analysis:

1. Qualification of CFS as an 'Infrastructure Facility' under Section 80IA(4):
The primary issue revolves around whether the CFS operated by the assessee qualifies as an 'infrastructure facility' under Section 80IA(4) of the Income Tax Act. The Revenue contended that the definition of 'infrastructural facility' under Section 80IA(4) includes a port, airport, inland waterway, inland port, or navigational channel in the sea but does not explicitly include a CFS. The Revenue further argued that the CFS operated by the assessee does not form part of the port as it is located away from the port premises. The Assessing Officer (AO) noted that the CFS does not fulfill the conditions outlined in Circular No. 793, dated 23/06/2000, such as being built under BOT/BOLT schemes or having an agreement for transfer to the port authority upon expiry of the stipulated time.

2. Eligibility of Income Derived from CFS for Deduction under Section 80IA(4)(i):
The AO observed that the sole controversy is whether the income derived from the CFS operated by the assessee is eligible for deduction under Section 80IA(4)(i). The AO relied on a Circular dated 06.01.2011, which clarified that an ICD or a CFS is usually not located at the port and therefore is not a part of the 'Port' for the purpose of Section 80IA(4)(i). The AO concluded that since the CFS is located away from the port premises, it does not qualify as an 'infrastructure facility' eligible for deduction under Section 80IA(4).

3. Interpretation and Applicability of Circulars and Judicial Decisions:
The assessee relied on various judicial decisions, including the ITAT Special Bench, Mumbai's decision in the case of M/s. All Cargo Global Logistics Ltd., and the ITAT, Visakhapatnam Bench's decision in the assessee's own case for previous assessment years. The AO, however, distinguished these cases based on their facts and noted that the Department had not accepted the ITAT Special Bench's decision and had preferred an appeal before the Hon'ble High Court. The AO emphasized that the description of the activity of the assessee under other enactments cannot be taken as conclusive for the purpose of the Income Tax Act. The AO referred to the Supreme Court's decision in CIT vs. Venkateshwara Hatcheries Ltd., which held that the meaning assigned to a word in one statute cannot be imported to another statute.

Decision of the CIT(A) and ITAT:
The CIT(A) followed the decision of the ITAT, Visakhapatnam Bench, in the assessee's own case for the Assessment Year 2013-14, which held that the assessee is eligible for deduction under Section 80IA(4). The ITAT, in its detailed analysis, considered various judicial decisions, including the Hon'ble Bombay High Court's decision in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd. and the Hon'ble Madras High Court's decision in the case of A.L. Logistics (P) Ltd., which supported the assessee's claim. The ITAT also referred to the Supreme Court's decision in the case of Container Corporation of India Ltd., which upheld that inland container depots are inland ports eligible for deduction under Section 80IA.

Conclusion:
The ITAT concluded that the assessee's CFS qualifies as an 'infrastructure facility' under Section 80IA(4) and that the income derived from the CFS is eligible for deduction under the said section. The appeal filed by the Revenue was dismissed, and the order of the CIT(A) directing the AO to allow the deduction claimed by the assessee was upheld. The ITAT emphasized that the description of the activity under other enactments cannot override the specific provisions and judicial interpretations under the Income Tax Act.