Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (4) TMI 191 - AT - Income TaxDeduction u/s. 80IA(4)(i) on storage tank MDI and storage tank EDA - AO’s allegation is that storage tank is devoid of loading and unloading facility and same are not within the premises of Kandla Port Trust and held that MDI storage tank, for which assessee has claimed deduction is not an enterprise - assessee submitted that that there is difference in the nature of business in case of MDI storage tank and other tanks at the Tank Farm - as submitted full nomenclature of MDI means "DiphenylMethane Disocyanate” chemical product and chemical “MDI" needs to be stored in a separate tank built at the Port with insulation cover to maintain temperature and pressure and Nitrogen gas for 24 hrs X 7 days to ensure the Tank is free from moisture as the chemical if comes into contact with moisture may react adversely producing hazardous gases. Not only the Tank, the supply and delivery pipelines are also insulated. HELD THAT:- Hon’ble Supreme Court of India [2018 (5) TMI 359 - SUPREME COURT] upheld the judgement of Container Corporation of India Ltd [2012 (5) TMI 260 - DELHI HIGH COURT] Other High Courts namely Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd [2018 (1) TMI 1666 - BOMBAY HIGH COURT] and Madras High Court in the case of CIT -Vs- A.L. Logistic Pvt. Ltd. [2015 (1) TMI 401 - MADRAS HIGH COURT] held that looking to the facilities provided by the Container Freight Stations, the CFS is an Inland Port as it carries out the functions of warehousing, customs clearance and transport of goods from its location to sea-port and vice versa by rail or by trucks in containers and the eligible to claim deduction u/s. 80IA[4] of the Act. Respectfully following the above judicial precedents, we are of the considered view that the assessee herein has complied with all the provisions of section 80IA(4)(i) of the Act and is eligible to claim deduction on storage Tank MDI and storage Tank EDA - Decided in favour of assessee. Amortization of share issue expenses u/s. 35D - A.O. disallowed the same on the ground that assessee company is a Private Limited company and has made expenses in relation to normal issue of shares not for public issue and expenses has been done after startup of business and are not related to expansion of undertaking or setting up of new unit - HELD THAT:- This issue is held in favour of the assessee by the Co-ordinate Bench in assessee’s own case [2019 (1) TMI 2043 - ITAT RAJKOT] wherein as held that said expenses has been incurred before the commencement of business and same are in the capital in nature. In our considered opinion, assessee has rightly claimed its amortization. - Decided in favour of assessee. Disallowance u/s. 14A r.w.s. 8D - assessee was not able to show one to one relation from its bank account that the investment was made entirely from its own funds - CIT(A) deleted addition - HELD THAT:- This issue is held in favour of the assessee by deleting the addition made u/s. 14A by the Co-ordinate Bench in assessee’s own case in [2019 (1) TMI 2043 - ITAT RAJKOT] as held that no disallowance can be made u/s. 14A as no interest bearing funds has been deployed to earn exempt income. And ld. A.O. had not demonstrated any nexus between the earning of exempt income for such income. Therefore, in our considered opinion, ld. CIT(A) has rightly granted relief to the assessee. Disallowance made u/s 8D(iii) are confirmed by lower authorities because assessee has not been able to prove one to one nexus of interest free funds as well as investment in securities because such investment require bank charges, clerical work and time of directors. Decided partly in favour of assessee. Disallowance of warehousing charges - addition on the alleged ground that the same is excessive in nature as compared to payment made other parties - CIT(A) deleted addition - HELD THAT:- As decided in assessee’s own case in [2019 (1) TMI 2043 - ITAT RAJKOT] payment made to persons other than persons covered u/s. 40A(2)(b) were comparable and interalia payment to the persons covered u/s. 40A(2)(b) was not excessive either in comparison to the other independent parties as well as to the market rate which can assumed as to nearer to the rates at which the said third parties are being paid. Therefore, in our considered opinion, ld. CIT(A) has rightly granted part relief to the assessee. Disallowance in connection with the windmills - HELD THAT:- This issue is also held in favour of the assessee by following Jurisdictional High Court Judgement in the case of Parry Engineering & Electronics Pvt Ltd [2014 (12) TMI 752 - GUJARAT HIGH COURT] the Co-ordinate Bench in assessee’s own case [2019 (1) TMI 2043 - ITAT RAJKOT] held that the installation of windmill and the civil structure and the electric fittings are so closely interconnected and linked as to form the common plant. As already noted, the legislature has provided for higher rate of depreciation of 80 per cent on renewable energy devises including windmill and any specially designed devise, which runs on windmill. The civil structure and the electric fitting, equipment are part and parcel of the windmill and cannot be separated from the same. The assessee s claim for higher depreciation on such investment was, therefore, rightly allowed. Addition u/s. 41(1)(a) - cessation of liabilities - HELD THAT:- This issue is held against the assessee by the Co-ordinate Bench in assessee’s own case in [2019 (1) TMI 2043 - ITAT RAJKOT] wherein as held assessee could not submit any explanation that why these amounts had been shown outstanding for such a long period and what steps have been taken by the assessee to recover these amounts and even before us assessee could not explain about the list in details. Therefore, we dismiss this ground of appeal by the assessee.
|