2020 (4) TMI 286 - AT - Income Tax

Deduction u/s 80-IA(4) - container freight station eligibility for deduction - HELD THAT - We have seen that on identical grounds of appeal, similar issue was decided by the Tribunal in favour of the assessee by relying upon the decision of Hon ble Supreme Court in Container Corporation of India 2018 (5) TMI 359 - SUPREME COURT wherein freight station is held as eligible for deduction u/s 80IA(4). Deduction u/s 80IA claimed consisting head rent and interest on Fixed Deposits - HELD THAT - We have noted that interest on FD was held to be not inextricably linked with the business of the assessee and was decided against the assessee. However, the other component of income, viz. Rental income is restored back to the file of the AO with similar direction as contained in order of the Tribunal for AY 2009-10 2019 (8) TMI 1472 - ITAT MUMBAI Disallowance u/s 14A - Proof of earning exempt income - HELD THAT - We have noted that during the period under consideration, the assessee has not earned any exempt income. There is no finding of AO, whether the assessee has earned any exempt income. Therefore, we direct the AO to verify the fact if any exempt income has been earned by the assessee and if no exempt income has been earned by the assessee, then no disallowance u/s 14A be made. This ground of appeal is treated as allowed.

Issues:
1. Appeal against orders of Ld.CIT(A)-54, Mumbai for the assessment year 2013-14.
2. Dismissal of appeals in ITA Nos 7054, 7358/Mum/2016 & 3661/Mum/2016 as infructuous.
3. Appeals filed by the assessee and the revenue in ITA No.5658/Mum/2017 and ITA No.5774/Mum/2017.
4. Grounds raised by the revenue in ITA No.5774/Mum/2017.
5. Grounds raised by the assessee in ITA No.5658/Mum/2017 regarding deduction under section 80 IA of the Income Tax Act, 1961.

Analysis:
1. The appeals in ITA Nos 7054, 7358/Mum/2016 & 3661/Mum/2016 were dismissed as infructuous due to a subsequent order by Ld.CIT(A) on the e-appeal, leading to cross appeals filed by both parties.
2. The revenue's appeal in ITA No.5774/Mum/2017 questioned the eligibility of the assessee for deduction u/s 80-IA(4) and the classification of Container Freight Station (CFS) as an extension of port activity. The Tribunal upheld the assessee's eligibility based on a Supreme Court decision.
3. The assessee's appeal in ITA No.5658/Mum/2017 contested various disallowances under section 80 IA, including rental income, interest on Fixed Deposits, staff welfare expenses, entertainment expenses, and miscellaneous expenses. The Tribunal upheld disallowance of interest on FD but remanded rental income for fresh adjudication.
4. The Tribunal directed the AO to verify if any exempt income was earned by the assessee during the relevant period under consideration for disallowance u/s 14A.
5. Grounds 3 to 5 raised by the assessee were not pressed and dismissed, while ground 6 was dismissed as consequential. Ground 7 was of a general nature and required no adjudication.
6. The appeal of the assessee was partly allowed based on the Tribunal's findings on each ground raised in ITA No.5658/Mum/2017.

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