GATEWAY TERMINALS INDIA PVT. LTD.,RAIGAD vs. DCIT- PANVEL -CIRCLE PANVEL, PANVEL

This appeal is filed by Gateway Terminals India Pvt. Ltd [ Assessee/ Appellant] for A.Y. 2013-14, against the appellate order passed by The Commissioner of Income- tax (Appeals)-2, Thane [the learned CIT (A)], on 8th March, 2019. By this appellate Order appeal filed by the assessee against the assessment order dated 30th December, 2016, passed under Section 143(3) read with

The assessee has raised following grounds of appeal :-

Brief facts of the case shows that assessee is operating a container freight terminal at Jawaharlal Nehru Port Trust. It filed its return of income for A.Y. 2013-14 on 30th November, 2013, declaring taxable income of

After hearing both the parties, we find that for A.Y. 2012- 13, identical issue is covered against assessee in ITA No.300/Mum/2022 dated 28th May, 2020. In that case, identical issue was decided by the co-ordinate Bench as per paragraph no. 9 of the order, holding that fixed deposit interest income earned by the assessee could not be said to have any nexus with the eligible business for which deduction under Section 80IA of the Act is available. Anyway, assessee has stated before LD lower authorities that bank Fixed Deposit interest is earned where surplus sum was placed with the bank in the form of Fixed Deposits. Thus, respectfully following the decision of coordinate bench in assessee’s own case for earlier years, we also hold that bank fixed deposit interest is not eligible for deduction u/s 80 IA [4] of the Act. Thus, ground no.1 of the appeal is dismissed holding that fixed deposit interest earned by the assessee cannot be said to be an income derived from the business of eligible infrastructure facility. Accordingly, ground no.1 of the appeal is dismissed.

Ground no.2 is with prejudice to ground no.1 stating that the learned CIT (A) did not adjudicate the alternative

We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that income and expenditure both should be derived from the business of industrial undertaking eligible for deduction, then only, such interest can be net off. If blanket net off is directed then, it tantamount to allowance of deduction u/s 80 IA [4] of the Act on FDR interest

Third ground of appeal is with respect to allowability of benefit under Section 80IA of the Act on income from sale of scrap of ₹46,06,161/- . We find that the sale of scrap was stated by the learned Assessing Officer as not derived from the business of industrial undertaking. The learned CIT (A) vide paragraph no. 9 has upheld the order of the learned Assessing Officer.

After hearing both the parties, we find that assessee has earned income from sale of scrap by selling wire ropes, Scrap and Waste oil. These are the income generated out of the maintenance and operational activity of the port. These are either left over or old and used wire ropes. Necessary evidences in form of sales bills are also produced before lower authorities. Cost of these materials has already gone into the expenditure of operation of the port activities. We find that when scrap sold by the assessee has direct nexus with the business of the infrastructure facility, such income should be eligible for deduction u/s 80IA [4] of the Act. It is not the claim of revenue that such scrap sale is of totally unrelated items to the business of assessee. Therefore, income from sale of scrap is eligible for deduction under Section 80IA of the Act. Accordingly, ground no.3 of the appeal is allowed.