2020 (10) TMI 1162 - HC - Income Tax

Court Upholds Precedent on Deduction Eligibility under Section 80IA(4)

The Court dismissed the appeal on the basis of precedent set by a previous judgment, stating that the present appeal is covered by the earlier decision. ... Entitled for deduction u/s 80IA(4) - Container Freight Station constitutes an 'inland port' - HELD THAT:- This Court in Assessee's own case [2019 (11) TMI 1483 - MADRAS HIGH COURT] has decided the questions of law against the revenue. In M/S CONTAINER CORPORATION OF INDIA LTD. [2018 (5) TMI 359 - SUPREME COURT] both the Notification and communication are not binding on CBDT to decide whether ICDs can be termed as Inland Ports within the meaning of Section 80-IA appellant herein is unable to put forward any reasonable explanation as to why these notifications and communication should not be relied to hold ICDs as Inland Ports. Unless shown otherwise, it cannot be held that the term ‘Inland Ports' is used differently under Section 80-IA. All these facts taken together clear the position beyond any doubt that the ICDs are Inland Ports and subject to the provisions of the Section and deduction can be claimed for the income earned out of these Depots. Actual computation is to be made in accordance with the different Notifications issued by the Customs department with regard to different ICDs located at different places. - Decided against revenue. Issues:1. Whether Container Freight Station constitutes an 'inland port' for deduction under Section 80IA(4) of the Income Tax ActRs.2. Eligibility for deduction under Section 80IA(4) without an agreement with the government.3. Eligibility for deduction under Section 80IA(4) for an existing infrastructure facility.4. Interpretation of CBDT Circular No.10/2005 for deduction claims.Issue 1:The appeal questions if a Container Freight Station (CFS) can be considered an 'inland port' for deduction under Section 80IA(4) of the Income Tax Act. The Court referred to a previous Division Bench judgment that had already decided this issue against the revenue. The Court dismissed the appeal based on the precedent set by the earlier case, stating that the present appeal is covered by the previous judgment, and hence, the appeal was dismissed without costs.Issue 2:The eligibility for deduction under Section 80IA(4) without an agreement with the government was raised. The Court cited a similar case where the Division Bench had ruled against the revenue, and the Supreme Court had dismissed the Review Petition. As the present appeal fell under the same judgment, it was dismissed, and no costs were awarded. The Court emphasized that the Tribunal had followed the decision in the assessee's earlier case, and hence, the appeal was dismissed.Issue 3:The question of eligibility for deduction under Section 80IA(4) for an existing infrastructure facility was raised. The Court noted that the Tribunal's decision in the impugned order aligned with the assessee's previous case for the assessment years 2010-2011 and 2011-2012. Citing a Supreme Court decision, the Court highlighted that the benefit under Section 80IA could not be curtailed or denied by subsequent amendments, emphasizing the importance of understanding the nature of Inland Container Depots (ICDs) and their role as facilitators for importers and exporters.Issue 4:The interpretation of CBDT Circular No.10/2005 for deduction claims was discussed. The Court referred to a Supreme Court decision and emphasized that ICDs could be considered Inland Ports for the purposes of Section 80IA of the IT Act. The Court highlighted that while the term 'Inland Port' was not explicitly defined, notifications and communications from relevant authorities supported the classification of ICDs as Inland Ports. Consequently, the Court dismissed the Tax Case Appeals, answered the substantial questions of law against the Revenue, and closed the connected miscellaneous petition without costs.