2022 (2) TMI 123 - HC - Income Tax

Revision u/s 263 by CIT - whether the assessee was entitled to the benefit of deduction u/s 80- IA(4)? - revenue seeks to sustain the order passed by the PCIT under Section 263 of the Act by contending that the two companies which were permitted to use the railway sidings were group companies of the assessee and they were closely held companies by the assessee and, therefore, cannot be construed to be used by general public - HELD THAT - Contention of the revenue has to be outrightly rejected and such narrow interpretation of the agreement entered into between the assessee and Indian Railways cannot be given. Tribunal rightly referred to the various clauses in the agreement and came to the conclusion that the Railway Administration had a right to use all the sidings which have been put up by the assessee. Thus, the assessee would squarely fall within the ambit of clause (b) of Section 80-IA(4) of the Act. Further, we note Tribunal has relied on the decision in the case of Tamilnadu Petro Products 2010 (11) TMI 645 - MADRAS HIGH COURT wherein as took note of the decision in the case of CIT Vs. Tanfac Industries Ltd. 2009 (7) TMI 1260 - SUPREME COURT wherein while applying Section 80-IA(4) of the Act, The Hon ble Supreme Court took a view that the value of steam used for captive consumption by the assessee was entitled to be deducted under Section 80-IA of the Act. In Tamilnadu Petro Products 2010 (11) TMI 645 - MADRAS HIGH COURT the revenue contended that the expression derived from should be given restricted meaning in which event the claim of the assessee cannot be countenanced. This argument by the revenue was rejected by holding that Section 80-IA (4) provides for the benefit even in respect of electricity generation plant established by the assessee and income derived from such enterprise of the assessee and it was held that the assessee has fully complied with the requirement prescribed under Section 80IA in order to avail the benefit provided therein. The above decision will squarely apply to the facts of the case on hand. Furthermore, the Tribunal also relied upon the decision of the ITAT Mumbai Bench in the case of JSW STEEL VS. PCIT 2017 (12) TMI 1204 - ITAT MUMBAI wherein identical facts were involved and thus we are of the clear view that the Tribunal rightly allowed the appeal filed by the assessee.

Issues involved:
1. Delay in filing the appeal and condonation of the delay.
2. Appeal under Section 260A of the Income Tax Act, 1961.
3. Substantial questions of law raised by the revenue.
4. Entitlement to deduction under Section 80-IA(4) of the Act.
5. Order passed by the Principal Commissioner of Income Tax, Central I, Kolkata under Section 263 of the Act.
6. Tribunal's decision on the admissibility of deduction under Section 80-IA(4).
7. Interpretation of the agreement between the assessee and Indian Railways.
8. Application of relevant case laws in determining the entitlement to deduction under Section 80-IA(4).
9. Tribunal's decision on the appeal filed by the assessee.
10. Dismissal of the appeal by the revenue and the outcome of the case.

Detailed Analysis:

1. Delay in filing the appeal and condonation of the delay:
The High Court noted a delay of 983 days in filing the appeal and observed that a substantial portion of the delay remained unexplained. The Court highlighted specific periods of unexplained delay and stated that they could have dismissed the application for condonation. However, since the appeal was filed by the revenue under Section 260A of the Act, the Court decided to consider whether substantial questions of law would arise for consideration. The Court exercised discretion and condoned the delay due to the parties' readiness to argue the main appeal on merits.

2. Appeal under Section 260A of the Income Tax Act, 1961:
The appeal filed by the revenue under Section 260A of the Income Tax Act was directed against the order passed by the Income Tax Appellate Tribunal for the assessment years 2009-10 to 2012-13. The revenue raised substantial questions of law related to the revisionary order under Section 263, admission of fresh evidence, and entitlement to deduction under Section 80IA.

3. Entitlement to deduction under Section 80-IA(4) of the Act:
The main question in the appeal was whether the assessee was entitled to the benefit of deduction under Section 80-IA(4). The Tribunal examined the relevant statutory provisions, the agreement between the assessee and Indian Railways, and other related facts. The Tribunal granted relief to the assessee by allowing the deduction under Section 80-IA(4) after a thorough factual examination, rejecting the revenue's contentions regarding the use of railway sidings by group companies.

4. Tribunal's decision on the appeal filed by the assessee:
The Tribunal's decision to allow the appeal filed by the assessee was based on the interpretation of relevant clauses in the agreement between the assessee and Indian Railways, along with the application of case laws such as the decision in Tamilnadu Petro Products and JSW STEEL VS. PCIT. The Tribunal's decision was upheld by the High Court, resulting in the dismissal of the appeal by the revenue.

5. Outcome of the case:
As a result of the detailed analysis and application of legal principles, the High Court dismissed the appeal filed by the revenue and answered substantial questions of law against the revenue. The stay application was also dismissed, concluding the case.

This comprehensive analysis covers the various issues involved in the legal judgment, detailing the arguments, decisions, and reasoning provided by the High Court in the case.

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