×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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06-09-2019, Gateway East India, Section 153A, 80IA(4)(i), Tribunal Visakhapatnam
This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-1, Visakhapatnam, dated 24/01/2019 for the Assessment Year 2014-15.
2. The Revenue has raised the following grounds of appeal:-
“1. The Order of the Ld. CIT(A)-1, Visakhapatnam is erroneous in law.
2. The Ld. CIT(A) erred in directing the assessing officer to allow the deduction claimed by the assessee U/s 801A(4) of I.T.Act.
3. The Ld.CIT(A) ought to have appreciated that the definition of 'infrastructural facility' as defined uls.801A(4) includes' a port, airport, inland water way, inland port or navigational channel in the sea' but does not include Container Freight Station(CFS).
4. The Ld.CIT(A) ought to have considered that even as per the letter issued by the. Vishakhapatnam Port Trust, the structure (CFS) does not form part of the Port.
5. The Ld.CIT(A) ought to have seen that the Board, vide Circular dated 06-01-2011, clarified that an LCD or a CFS is usually not located at the Port and therefore, is not a part of the 'Port' for the purpose of computation of deduction u/s. 801A(4)(i) of the Act.
6. The Ld.CIT(A) ought to have appreciated that the assessing officer had categorically pointed out that the CFS is located far away from the Port premises, and therefore, does not form part of Port as contemplated u/s. 801A(4)(i) of the Act.
7. The Ld.CIT(A) erred in allowing the assessee's appeal solely relying on a Circular issued by Central Board of Excise & Customs issued under the provisions of Central Excise & Customs Act, which has no relevance to the provisions of the Income-tax Act, 1961, or the reliefs sought by the assessee under the provisions of the Income-tax Act.
8. The appellant cra es leave to add or amend or alter or delete any ground at the time of hearing of the appeal. For these and other grounds that may be urged at the time of hearing, the addition to the total income made by the AO on account of disallowance of deduction claimed u/sec. 80IA(4) be restored.”
3. Facts of the case in brief are that the assessee is a company engaged in the operation of Container Freight Station (CFS), filed its return of income by declaring total income of Rs.1,09,03,800/- after claiming deduction u/sec. 80IA(4) of Rs. 16,30,74,430/-. The return filed by the assessee was processed u/sec. 143(1) of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). Subsequently, the case was selected for scrutiny and after following due procedure, assessment was completed u/sec. 143(3) of the Act, dated 05/12/2016. The Assessing Officer has asked the assessee as to how assessee is eligible for deduction u/sec. 80IA(4) of the Act. The assessee has submitted a detailed submission which was reproduced by the Assessing Officer in his order at para Nos. 4 to 7.
4. The Assessing Officer after considering the assessee‟s explanation noted that a perusal of the certificate issued by the Visakhapatnam Port Trust indicates that the structure on which the assessee has claimed deduction u/sec. 80IA(4) does not fulfil the conditions enumerated in Circular No. 793, dated 23/06/2000 such as the CFS has not been built under BOT and BOLT scheme and there is no agreement that the same would be transferred to VPT on expiry of time stipulated in the agreement as mentioned in Circular No.793, dated 23/06/2000 or Circular No.10/2005, dated 16/12/2005. It can be seen from the above that the conditions enumerated vide Circular No.793, dated 23/06/2000 for such structures to be included in the definition of port is not fulfilled by the assessee-company. Coming to Circular No.10/2005, the conditions laid down for such structure to be eligible for deduction is that the concerned port authority has issued a certificate, that the said structures form part of the port. In support of the above,