2016 (7) TMI 210 - HC - Income Tax

Disallowance made under Section 80IA(4) - development of the infrastructure facilities or not - income from the container freight station (CFS) - appellant was declared as custodian of the containers and the imported goods received in containers from Haldia Dock Complex and the goods meant for export through Haldia Port via their CFS - Tribunal deleted the addition - Held that - Substantial questions of law have already been answered against the revenue in the case of Commissioner of Income Tax Vs. A.L.Logistics Pvt Ltd. 2015 (1) TMI 401 - MADRAS HIGH COURT . Though A.L.Logistics s case have been challenged by the revenue before the Hon ble Supreme Court, we are of the considered view that there cannot be any impediment in following the said decision to cases arising out of similar set of facts and law. However, when a petition is filed before the Hon ble Supreme Court seeking leave to appeal and the same having been converted into an appeal by the Supreme Court, the High Court should not entertain a review petition. The High Court also cannot reverse and modify the order impugned before the Supreme Court. But the judgment rendered by the High Court is not erased. - Decided in favour of assessee

Summary

Issues:
1. Disallowance of deduction under Section 80-IA (4) for a Container Freight Station (CFS).
2. Whether the CFS can be treated as an inland port for eligibility under Section 80-IA(4).
3. Fulfillment of conditions stipulated under Section 80-IA(4) (i) (b).
4. Consideration of the amendment to Section 80-IA(4) Explanation.

Analysis:
1. The case involved a challenge regarding the disallowance of a deduction under Section 80-IA (4) for a Container Freight Station (CFS). The Commissioner of Income Tax (Appeals) disallowed the deduction, stating that the facility did not meet the criteria of an infrastructure facility as per the Act. However, the appellant argued that their CFS met the necessary conditions and cited previous decisions in their favor for the same assessment year. The High Court allowed the appeal, following the decisions of the ITAT, Chennai, and the Madras High Court in the appellant's favor for a previous assessment year.

2. The issue of whether the CFS could be considered an inland port for eligibility under Section 80-IA(4) was raised. The Tribunal, in an order on an identical issue in the assessee's own case, and following a judgment by the Delhi High Court, dismissed the revenue appeal. Substantial questions of law were raised regarding the classification of the CFS as an inland port and its eligibility for the deduction.

3. The Tribunal's decision to delete the disallowance made under Section 80-IA(4) was challenged based on the appellant's alleged failure to fulfill the conditions stipulated under Section 80-IA(4) (i) (b). The High Court considered previous judgments and principles of law, including the doctrine of merger, in its analysis. It was noted that the revenue's challenges to similar cases were pending before the Supreme Court.

4. The appellant contended that the Tribunal failed to consider the amendment to Section 80-IA(4) Explanation, which omitted certain provisions regarding public facilities. The High Court examined the statutory provisions related to appeals to the Supreme Court and concluded that the substantial questions of law had already been answered against the revenue in a previous case. The High Court dismissed the Tax Case Appeal, citing the statutory provisions and previous decisions against the revenue.

This detailed analysis of the judgment addresses the issues raised in the case regarding the disallowance of deduction under Section 80-IA (4) for a Container Freight Station and the eligibility criteria under the Income Tax Act.