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2016 (9) TMI 656 - AT - Income TaxEligibility of deduction u/s 80IA(4) - assessee company is engaged in the providing “Container Freight Station” (CFS) which has been duly approved as ‘Inland Port’ by Ministry of Finance, Department of Revenue, CBEC in its Circular - Held that:- CFS has been defined as a common user facility with public authority status equipped with fixed installations and offering services for handling and temporary storage of import/export laden and empty containers carried under customs transit by any applicable mode of transport placed under customs control. All the activities related to clearance of goods for home use, warehousing temporary admissions, re-export, temporary storage for onward transit and outright export, trnas-shipment, take place from such stations. Hon’ble Delhi High Court in the case of Container Corporation India Ltd. (2012 (5) TMI 260 - DELHI HIGH COURT ) where the assessee carried out activities of Inland Container Depot; Central Freight Stations and port Containers’ Terminals, the Hon’ble Court held that the profit derived from such activity is eligible for deduction under section 80IA(4). Where assessee is carrying out CGS activities which is nothing but infrastructure facility as defined under section 80IA(4). Accordingly we confirm the order of the CIT(A) and direct the AO to allow the deduction under section 80IA(4). - Decided in favour of assessee Disallowance under section 14A - Held that:- We find that so far as the disallowance of interest expenditure is concerned under Rule 8D(2)(ii), the same is not sustainable, because admittedly, the surplus funds with the assessee far exceeds the investments made and, therefore, in view of the ratio laid down by the Hon’ble jurisdictional High Court in the aforesaid cases, no disallowance can be made. Accordingly, we direct the AO to delete the same. So far as disallowance of indirect expenditure is concerned under Rule 8D(2)(iii), the same stands admitted by the Ld. Counsel, therefore the disallowance under section 8D(2)(iii) is confirmed. As regards the disallowance under section 14A under MAT provision, that is, under section 115JB, the disallowance as sustained under normal provision shall be added to the book profit, therefore grounds raised in Cross objections for both the impugned assessment years stands party allowed.
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