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There is no need for assessee to give evidence of acquisition of new plant and machinery for the eligible unit for claiming deduction u/s.80IA of Income Tax Act, 1961: Calcutta High Court

This case was filled by Mr. Debashis under Section 260A of the Income Tax Act, 1961. The Judgement in Principal Commissioner Of Income vs M/S. T.M. International Logistic (Citation: IA NO:GA/2/2017)by served by THE HON’BLE JUSTICE T.S.SIVAGNANAM AND THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA.

FACTS OF THE CASE

These appeals have been filed by the revenue under Section 260A of the Income Tax Act, 1961 against the common order dated 4th October, 2016 passed by the Income Tax Appellate Tribunal “A” Bench, Kolkata (Tribunal) in ITA/1513/Kol./2008 for the assessment year 2004-2005 and ITA/1914/Kol/2008 and C.O. No. 133/Kol/2008 for the assessment year 2005-2006. The facts which are to be noted are that assessee is a company engaged in a business of terminal port operation including development, operation and maintenance thereof, logistic solutions provider and agency work. The head office of the assessee company is at Calcutta and they are engaged in port activities at Haldia, Paradip and Mumbai. At Haldia Port they have activities at Berth No. 12 and the question is whether they are eligible for deduction under Section 80-IA of the Act. For the assessment year 2004-2005 the assessee filed the return of income and claimed deduction under Section 80-IA for expenses for repairs and maintenance. Similar was the claim made by the assessee for the assessment year 2005-2006. The assessing officer by two separate orders dated 29th December, 2006 and 31st December, 2007 for the assessment years 2003-2004 and 2004-2005 respectively rejected the claim. Since the assessment order is verbatim the same and the assessing officer is also the same person suffice to refer to the assessment order dated 29th December, 2006 for the assessment year 2004-2005. The assessing officer noted that the assessee company had claimed deduction under Section 80-IA for operating and maintaining multi purpose Berth No. 12 at Haldia Dock Complex. They submitted a letter dated 20th November, 2006 issued by the port authorities stating that Berth No. 12 at Haldia Dock Complex has been allotted to the assessee on leave and license basis for thirty years and it has exclusive license to equip, construct, finance, operate, manage, maintain and replace the project facilities and services. The assessing officer upon noting the letter observed that the letter nowhere indicates or mentions or reveals the nature and extent of work done by the assessee during the year under consideration as it only indicates that there is an agreement between port authorities and the assessee company for a specified purpose and work and, therefore, was of the opinion that the letter can have no significance with regard to the deduction claimed under Section 80-IA of the Act.

JUDGEMENT

The court after going through the facts and arguments observed that the assessment records that a separate profit & loss account & balance sheet was prepared for Berth No. 12, Haldia Dock Complex. These documents were submitted along with return of income. Further, it is found that as per provision of Act, there is no need for assessee to give evidence of acquisition of new plant and machinery for the eligible unit for claiming deduction u/s.80IA of Income Tax Act, 1961 because the assessee maintains port. As per Circular No. 10/2005 dated 16.12.2005, the business activity of assessee in relation to Berth No. 12. Haldia Dock Complex falls within the meaning of “Port” in Explanation below Section 80(IA)(i)(c) of the Income Tax Act, 1961.
Further the court held that the Tribunal rightly rejected the revenue’s appeal and confirmed the order passed by the CIT(A) granting relief to the assessee. Thus, there is no grounds to take a different view in the matter. Moving ahead the court noted that the appeals filed by the revenue are dismissed and the substantial questions of law are answered against the revenue.Consequently, the applications are also dismissed.

JUDGEMENT REVIEWED BY AKANKSHA.

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