O/TAXAP/200/2017 JUDGMENT IN HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 200 of 2017 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE B.N. KARIA 1 Whether Reporters of Local Papers may be NO allowed to see judgment ? 2 To be referred to Reporter or not ? NO 3 Whether their Lordships wish to see fair NO copy of judgment ? 4 Whether this case involves substantial NO question of law as to interpretation of Constitution of India or any order made thereunder? PRINCIPAL COMMISSIONER OF INCOME TAX Appellant(s) Versus SEABIRD MARINE SERVICES PVT. LTD. Opponent(s) Appearance: MR PRANAV G DESAI, ADVOCATE for Appellant(s) No. 1 CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE B.N. KARIA Date : 04/04/2017 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) Page 1 of 5 HC-NIC Page 1 of 5 Created On Thu Apr 13 10:42:11 IST 2017 O/TAXAP/200/2017 JUDGMENT [1.0] Feeling aggrieved and dissatisfied with impugned judgment and order passed by learned Income Tax Appellate Tribunal, Rajkot Bench, Rajkot (hereinafter referred to as learned tribunal ) dated 16/08/2016 in ITA No.339/Raj/2013 for Assessment Year 2010-11, revenue has preferred present Tax Appeal with following proposed question of law; Whether ITAT is justified in law and facts in deleting disallowance of deduction claimed by assessee of Rs.38,86,41,444/- under Section 80IA(4)? [2.0] facts leading to present Tax Appeal in nutshell are as under; [2.1] respondent assessee filed return of income for Assessment Year 2010-11 declaring total income at Rs.5,74,84,220/-. case of assessee was selected for scrutiny. During course of assessment proceedings, it was noticed that assessee company has claimed deduction of Rs.40,05,24,711/- under Section 80IA(4) of Income Tax Act, 1996 (hereinafter referred to as Act) on infrastructure development in respect of infrastructure facility provided at JNPT Nava Sheva Port. assessee Company had set up Container Freight Station at Nava Sheva Port in Navi Mumbai in F.Y. 2005-06. Assessing Officer was of opinion that assessee is not entitled to deduction of Rs.40,05,24,711/-/- under Section 80IA(4) of Act as claimed. Thereafter, assessment under Section Page 2 of 5 HC-NIC Page 2 of 5 Created On Thu Apr 13 10:42:11 IST 2017 O/TAXAP/200/2017 JUDGMENT 143(3) of Act came to be finalized by Assessing Officer by determining total income of assessee Company at Rs.45,80,08,931/- after making disallowance of deduction claimed by assessee of Rs.40,05,24,711/- of Act. Assessing Officer while disallowing claim made by assessee under Section 80IA(4) of Act was of opinion that Container Freight Stand operated by assessee at JNPT is not specified infrastructure facility eligible for such deduction and facility set up at Mundra Port is also Container Freight Station, and therefore, same does not qualify deduction under Section 80IA(4) of Act. [2.2] Feeling aggrieved and dissatisfied with order passed by Assessing Officer making disallowance of deduction claimed by assessee of Rs.40,05,24,711/- under Section 80IA(4) of At, assessee preferred Appeal before learned CIT(A). learned CIT(A) allowed said Appeal preferred by assessee and deleted disallowance made by Assessing Officer of deduction claimed by assessee under Section 80IA of Act. [2.3] In Appeal preferred by revenue, learned tribunal by impugned judgment and order has confirmed order passed by learned CIT(A) deleting disallowance of deduction claimed by assessee of Rs.40,05,24,711/- under Section 80IA(4) of Act. [2.4] Feeling aggrieved and dissatisfied with impugned judgment and order passed by learned tribunal, revenue has preferred present Tax Appeal with aforesaid proposed question of law. Page 3 of 5 HC-NIC Page 3 of 5 Created On Thu Apr 13 10:42:11 IST 2017 O/TAXAP/200/2017 JUDGMENT [3.0] We have heard Shri Pranav G. Desai, learned advocate appearing on behalf of revenue. We have also perused impugned judgment and order passed by learned tribunal. question is with respect to deduction claimed by assessee under Section 80IA(4) of Act in case of income derived from industrial undertaking of Container Freight Stand at JNPT. It appears that Assessing Officer disallowed claim of assessee by considering conditions mentioned in provisions of Section 80IA(4) of Act vis vis Circular No.10 of 2005 dated 16/12/2005. Assessing Officer relied upon Certificate issued by JNPT dated 29/10/2005 bearing Reference No.JNPT/FIN/2005/290 wherein it was certified that Container Freight Stand is situated on land that does not belong to port and Container Freight Stand of assessee is extended activity of port. learned CIT(A) as well as learned tribunal has deleted disallowance of deduction under Section 80IA(4) of Act, and therefore, question, which is posed for consideration of this Court, is whether assessee is entitled to deduction under Section 80IA(4) of Act in case of income derived from industrial undertaking of Container Freight Station or not? [3.1] aforesaid issue is squarely covered against revenue in light of decision of Delhi High Court in case of Container Corporation of India Limited Vs. Assistant Commissioner of Income-tax reported in 346 ITR 140 [Delhi] as well as decision of Bombay High Court in case of Commissioner of Income-tax II, Thane Vs. Continental Warehousing Corporation [Nhava Page 4 of 5 HC-NIC Page 4 of 5 Created On Thu Apr 13 10:42:11 IST 2017 O/TAXAP/200/2017 JUDGMENT Sheva] Limited reported in 374 ITR 645 (Bombay). In aforesaid two decisions, Delhi High Court as well as Bombay High Court, after considering CBDT Circular No.10 of 2005 dated 16/12/2005 have specifically observed and held that looking to facilities provided by Container Freight Stand, Container Freight Stand is Inland Port as it carries out 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. [4.0] Under circumstances, learned tribunal has rightly deleted disallowance of deduction claimed by assessee under Section 80IA(4) of Act. At this stage, it is required to be noted that with respect to earlier orders assessee has been granted deduction under Section 80IA(4) of Act pursuant to order passed by learned tribunal and same has attained finality. [5.0] Considering aforesaid facts and circumstances of case, we see no reason to interfere with impugned judgment and order passed by learned tribunal. No substantial question of law arises in present Tax Appeal. Under circumstances, present Tax Appeal deserves to be dismissed and is accordingly dismissed. (M.R. SHAH, J.) (B.N. KARIA, J.) Siji Page 5 of 5 HC-NIC Page 5 of 5 Created On Thu Apr 13 10:42:11 IST 2017 Principal Commissioner of Income-tax v. Seabird Marine Services Pvt. Ltd