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of <h1>Section 153A Notice Requires Incriminating Material; ICDs and CFSs Qualify for Section 80-IA(4)(i) Deduction</h1> <h3>Commissioner of Income-Tax-II, Thane Versus Continental Warehousing Corporation (Nhava Sheva) Ltd., All Cargo Global Logistics Ltd.</h3> Commissioner of Income-Tax-II, Thane Versus Continental Warehousing Corporation (Nhava Sheva) Ltd., All Cargo Global Logistics Ltd. - [2015] 374 ITR 645 ... Issues Involved:1. Applicability of Section 153A of the Income Tax Act.2. Entitlement to deduction under Section 80-IA(4) of the Income Tax Act.Issue-wise Detailed Analysis:1. Applicability of Section 153A of the Income Tax Act:Facts and Arguments:- The Revenue challenged the Tribunal's interpretation of Section 153A, arguing that the Tribunal misread the scope of the assessment under this section.- The Tribunal held that assessments under Section 153A should be based on incriminating materials found during the search.- The Revenue contended that the Tribunal's view restricts the scope of Section 153A, which should encompass the total income of six years, including disclosed and undisclosed income.Legal Provisions:- Section 153A mandates the issuance of notice for six assessment years and allows for assessment/reassessment of total income, including both disclosed and undisclosed income.- The second proviso to Section 153A states that pending assessments abate upon initiation of search proceedings.Court's Analysis and Conclusion:- The Court referred to the Division Bench judgment in *Murli Agro Products Limited*, which clarified that completed assessments do not abate, and only pending assessments do.- The Court agreed with the Tribunal's interpretation that the scope of Section 153A should consider the findings from the search and any other material on record.- The Court upheld the Tribunal's decision, stating that the Special Bench's understanding of Section 153A was not perverse and aligned with the legislative intent.2. Entitlement to Deduction under Section 80-IA(4) of the Income Tax Act:Facts and Arguments:- The assessee claimed deductions under Section 80-IA(4) for operating a Container Freight Station (CFS), arguing it qualifies as an inland port.- The Revenue opposed, citing the withdrawal of certification by JNPT and the lack of a formal agreement with the Central Government.Legal Provisions:- Section 80-IA(4) allows deductions for enterprises developing, operating, and maintaining infrastructure facilities, including 'inland ports.'- The term 'inland port' is not explicitly defined in the Act but includes facilities like Container Freight Stations (CFS) and Inland Container Depots (ICD).Court's Analysis and Conclusion:- The Court referred to the Delhi High Court's judgment in *Container Corporation of India Limited*, which recognized ICDs as inland ports.- The Court noted that CFSs perform similar functions to ICDs, such as warehousing, customs clearance, and transportation of goods to and from seaports.- The Court found that the Tribunal correctly relied on the Special Bench decision and the Delhi High Court's ruling, concluding that CFSs qualify as inland ports eligible for deductions under Section 80-IA(4).- The Court dismissed the Revenue's appeals, affirming that the deduction under Section 80-IA(4) is applicable to both ICDs and CFSs.Final Judgment:The High Court dismissed the Revenue's appeals, holding that:1. The Tribunal's interpretation of Section 153A was correct, and the scope of assessment under this section includes considering incriminating materials found during the search.2. Container Freight Stations (CFS) qualify as inland ports, and their income is entitled to deductions under Section 80-IA(4) of the Income Tax Act.
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