2012 (8) TMI 893 - AT - Income Tax

Deduction u/s. 80 IA (4) denied - whether the assessee is a Port therefore entitled to get deduction under section 80 IA (4)? - Held that - As relying on All Cargo Global Logistics Ltd. & Others vs. DCIT 2012 (7) TMI 222 - ITAT MUMBAI(SB) it has been held that container freight station is an inland port as it carries out the functions of warehousing customer clearance and transportation of goods from its location to the port and vice versa by railways or by trucks and therefore its income is eligible for deduction under section 80 IA(4) thus as the assessee is an inland port hence eligible for deduction under section 80 IA(4) of the Act. - Decided in favour of assesse.

Summary

Issues Involved:
1. Denial of deduction under section 80 IA(4) of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Denial of Deduction under Section 80 IA(4):

The appellant challenged the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] confirming the Assessing Officer's (AO) denial of deduction under section 80 IA(4) of the Income Tax Act, 1961, amounting to Rs. 21,07,13,675/-. The grounds for appeal included the lack of fair opportunity to be heard, reliance on surmises and conjectures, and consideration of extraneous factors while ignoring relevant material.

Claim for Deduction:
The assessee claimed the deduction by filing an audit report in Form 10 CCB, asserting that their container freight station (CFS) qualified as a "Port" under section 80 IA(4). They supported their claim with a certificate from Jawaharlal Nehru Port Trust (JNPT) and a letter dated 13/07/2006.

Assessing Officer's Rejection:
The AO denied the deduction, citing that:
- The structure built by the assessee did not qualify as an infrastructure facility as per the Explanation to section 80IA(4).
- The CFS was not part of the JNPT premises.
- There was no agreement with the Central or State Government, local authority, or statutory body for developing, operating, and maintaining a new infrastructure facility.

CIT(A)'s Decision:
The CIT(A) upheld the AO's decision, leading to the present appeal by the assessee.

Appellant's Argument:
The appellant argued that the issue was covered in their favor by the Mumbai Special Bench decision in the case of All Cargo Global Logistics Ltd. & Others vs. DCIT. The Special Bench had held that a CFS qualifies as an "inland port" and is eligible for deduction under section 80 IA(4).

Respondent's Argument:
The Department Representative (DR) relied on the assessment order and the CIT(A)'s decision but could not refute the appellant's argument that the facts of the present case were identical to those in the Special Bench case.

Tribunal's Analysis:
The Tribunal reviewed the Special Bench decision, which concluded that a CFS performs functions akin to an inland port, including warehousing, customs clearance, and transportation of goods. The Tribunal noted that the Special Bench had considered similar letters from JNPT and still held that a CFS qualifies as an inland port.

Conclusion:
The Tribunal, following the Special Bench's decision, held that the assessee's CFS qualifies as an "inland port" and is eligible for deduction under section 80 IA(4). Consequently, the appeal was allowed, granting the assessee the claimed deduction.

Order Pronouncement:
The order was pronounced in the open court on August 31, 2012, allowing the appeal filed by the assessee.