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Facts
The assessee, a private limited company engaged in stevedoring and cargo handling, filed its return declaring total income. The Assessing Officer made additions on account of variation in respect of disallowance of deduction claimed u/s 80IA, imports, bad debts, and club expenditure.
Held
The Tribunal held that the case of the assessee is squarely covered by the decision of the Hon'ble Calcutta High Court in the assessee's own case for earlier assessment years. Following the principle of judicial discipline, the claim of deduction u/s 80IA(4) was allowed.
Key Issues
Whether the assessee is eligible for deduction u/s 80IA(4) when the Hon'ble High Court has already ruled in favour of the assessee in its own case for similar assessment years.
Sections Cited
80IA, 80IA(4), 143(2), 142(1), 36(1)(vii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH KOLKATA
Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey
आयकर अपील�य अ�धकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member Assessment Year: 2020-21 DCIT, Circle-7(1), Kolkata……………………………….……….……Appellant vs. Bothra Shipping Services Pvt. Ltd ………………….....……...…..…..Respondent Sagar Estate, 2nd Floor, Room No.10, Kol - 700001. [PAN: AAECB6711E] Appearances by: Shri Raja Senguptda, CIT-DR, appeared on behalf of the appellant. Shri Ankit Daga, Advocate, appeared on behalf of the Respondent. Date of concluding the hearing : September 04, 2025 Date of pronouncing the order : September 12, 2025 ORDER Per Pradip Kumar Choubey, Judicial Member:
This is an appeal filed by the revenue against the order of the National Faceless Appeal Centre [hereinafter referred to as the ‘CIT(A)’] in Appeal No.NFAC/2019-20/10172920 dated 09.01.2025. 2. The appeal has been filed by the revenue with a delay of 11 days. The revenue has filed a petition for condonation of delay. The reasons in the petition are plausible and valid. Consequently, the delay in filing the appeal is hereby condoned and we proceed to dispose off the appeal on merits.
Brief facts of the case are that the assessee being a private limited company engaged in the business of stevedoring, cargo handling, clearing and forwarding, hiring out of equipment, etc. The assessee filed Bothra Shipping Services Pvt. Ltd return of income declaring total income of Rs.16,21,14,500/-. The case of the assessee was selected for scrutiny and notices u/s 143(2) and 142(1) were duly served. The Assessing Officer after considering the submission made by the assessee made the following additions:
(i) amount of Rs.24,57,81,313/- on account of variation in respect of issue of disallowance of deduction claimed u/s 80IA, (ii) amount of Rs.5,42,05,208/- on account of variation in respect of issue of imports, (iii) Rs.54,30,109/- on account of variation in respect of issue of bad debts and (iv) Rs.4,07,171.20/- on account of variation in respect of issue of club expenditure.
3.1 The Assessing Officer assessed the total income of the assessee at Rs.46,79,38,301/-.
4. Aggrieved by the said order, the assessee preferred appeal before the ld. CIT(A) wherein the appeal of the assessee had been allowed on the issue of disallowance u/s 80IA, allowed the ground of bad debts and partly allowed on the ground relating to purchases.
Being aggrieved and dissatisfied, the revenue preferred appeal before us by taking the following grounds in the memo of appeal:
“1. That on the facts and the circumstances of the case and in law, the Ld. CIT (A) has erred in allowing deduction u/s 80IA(4) of the Income tax Act, 1961 for an entity which is not eligible for such deduction.
2. That on the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in giving directions which are in violation of the express provisions contained in Section 80IA(4) of the Income-tax Act, 1961 which Bothra Shipping Services Pvt. Ltd does not allow extension of the benefit to entities not having an agreement with Government directly.
3. That on the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in not considering that the assessee company was not the transferee company within the meaning of Proviso to Section 801A(4)(c) of the Income-tax Act, 1961 as there was no transferor company in this behalf.
That on the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in not considering that M/s Kakinada Sea Ports Limited, ie, the appointing entity of the assessee company has not surrendered its right of claiming deduction w/s 80IA of the Income-tax Act, 1961 on the same infrastructural activities claimed by the assessee company.
5. That on the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in not considering that M/s Kakinada Sea Ports Limited was not eligible for further authorizing any other entity for building of infrastructural facilities as there was no direct agreement with the Port Authority.
6. That on the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in considering CBDT Circular 10/2005 dated 16.12.2005 conveying relaxation of the conditions mentioned in Section 80IA(4) of the Income-tax Act, 1961 whereas the Circular only defined the term 'Port' for the purpose of fulfilment of one of the conditions, i.e., issuance of certificate by the Port Authority without disturbing any other condition(s) mentioned in the relevant provisions of the Income-tax Act, 1961.
7. That on the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in allowing the claim of bad debts as deduction w/s 36(1)(vii) of the Income-tax Act, 1961 ignoring that the assessee was unable to produce evidence to establish that sufficient efforts have been made by the assessee to recover the bad debts.
That the appellant craves leave to add to and/or alter, amend, modify or rescind the grounds hereinabove before or hearing of this appeal.”
In the course of argument, the ld. DR did not press Ground No.7 i.e. claim of bad debts as deduction u/s 36(1)(vii) of the Act. The ld. DR has only challenged the impugned order u/s 80IA(4) of the Act and Bothra Shipping Services Pvt. Ltd submitted that the ld. CIT(A) has erred in allowing the deduction u/s 80IA(4) of the Act.
Contrary to that, the ld. AR supports the impugned order and submitted that the case of the assessee is squarely covered by the decision of the Hon’ble Calcutta High Court in assessee’s own case for the assessment year 2015-16 and 2016-17. The ld. AR further submits that the claim of the assessee for deduction of Rs.24,57,81,313/- u/s 80IA(4) of the Act for port handing system issued by Kakinada Sea Port Ltd., Andra Pradesh and in the own case of the assessee, the Tribunal has passed order in favour of the assessee for the assessment year 2015- 16 and 2016-17 confirmed by the Hon’ble High Court. The ld. AR submits that there is no illegality in the impugned order.
7. Upon hearing the submissions of counsels of the respective parties, we have perused the impugned order and find that the ld. CIT(A) allowed the appeal of the assessee regarding deduction u/s 80IA(4) of the Act on the basis of decision which is in favour of the assessee’s own case passed by the Tribunal and subsequently confirmed by the Hon’ble Jurisdictional High Court for the assessment year 2015-16 and 2016-17. There is no denial to the fact that the case of the assessee is squarely covered by the decision of the Hon’ble High Court of Calcutta in assessee’s own case for the assessment year 2015-16 and 2016-17 and the operative part of the order of the Hon’ble High Court has already discussed by the ld. CIT(A) in his order, hence it is needless to reproduce the same. The operative part of the order of the ld. CIT(A) is hereby reproduced as under:
“5.2 FINDINGS REGARDING GROUND OF APPEAL NO.1:
ITA No.780/Kol/2025 Bothra Shipping Services Pvt. Ltd 1. In the instant case of the appellant itself, as discussed above, the Hon'ble Calcutta High Court has passed an order for a previous AY where the Revenue was in appeal before it against the order of the Hon'ble ITAT. The High Court has passed an order dated 25/O9/2024 in ITAT Nos. 85 of 2024 and 86 of 2024 whereby the Hon'ble High Court has allowed the claim of the deduction made by the appellant u/s. 80IA (4) of the I.T. Act. This relief has been given to the appellant for the A.Y. 2015-16 and 2016- 17. This relief was granted against the appeal filed by the Revenue challenging the order of the Hon'ble Income Tax Appellate Tribunal, Kolkata in for AY. 2015-16 and for the A.Y 2016-17. The Hon'ble ITAT in this regard has held that 14. Considering the factual (matrix, documents placed on record, position of law and CBDT circulars, submissions -made by both the parties and judicial precedents, as discussed above, wo are of considered view to allow the claim of deduction the assessee under section 80IA(4) of the Act Accordingly, ground nos. 01 to 09 taken by the assessee in this respect are allowed.”
Further, it is seen from the assessment order that the facts of the case in both the Assessment Year's are same and the addition has been made on the same ground, which is that the appellant has not fulfilled the condition as required in section 801A(4)(i). The same has also been stated in the order of the Assessing Officer. The relevant extract from the Para 5.5 of the assessment order at Page no. 10 for the AY. 2020-21 is reproduced as below: "In this connection, this is pertinent to mention here that assessee had also claimed deduction uls 80IA of the Income Tax Act, 1961, 1961 to the tune of Rs.27,21,55,535/- during the FY 2014-15 relevant to the AY 2015- 16 on the same issue as discussed in the foregoing paragraphs and the said deduction also disallowed by the then AO vide its Draft Order dated 31.12.2018." Thus, from the same, it is clear that the addition made in A.Y. 2020-21 is on the same facts as made in the A.Y. 2015-16 for which relief has been provided by the Hon'ble Calcutta High Court.
3. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed by the subordinate authorities. 3.1 This has been held by the Hon'ble Supreme Court of India in Union of India v. Kamlakshi Finance Corporation Ltd. AIR 1992 SC 711. The Bothra Shipping Services Pvt. Ltd relevant extract of the order of the Hon'ble Supreme Court in this case is as follows: 8. We have dealt with this aspect at some length, because it has been suggested by the leaned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. It is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses-public without any benefit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations of the High. Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the higher appellate authorities which aro binding on them.
9. With the above observations, this Special Leave Petition is dismissed." (Emphasis supplied) 3.2 The Supreme Court drew support from Bhopal Sugar Industries Ltd. v. ITO 1961 SCR (1) 474 wherein it was held: “It must be remembered that the order of the Tribunal dated April 22, 1954, was not under challenge before the Judicial Commissioner. That order had become final and binding on the parties, and the respondent could not question it in any way. As a matter of fact the Commissioner of Income-tax had made an application for a reference, which application was subsequently withdrawn. The Judicial Commissioner was not sitting in appeal over the Tribunal and we do not think that in the circumstances of this case it was open to him to say that the order of the Tribunal was wrong and, therefore, there was no injustice in disregarding that order. As we have said earlier, such view is destructive of one of the basic principles of the administration of justice." (Emphasis supplied) 3.3 In Triveni Chemicals v. Union of India and Anr. (Arising out of S.L.P (Civil) No.2985/2005] vide its judgement dated 15/12/2006, the Hon'ble Supreme Court has reiterated the principle that adjudicating authorities are bound by the doctrine of judicial discipline. 3.4 Thus, keeping in view the Principle of judicial discipline and respectfully following the judgement of the Hon'ble High Court of Calcutta dated 25/09/2024 in ITAT Nos.85 of 2024 and 86 of 2024, in the case of the appellant itself, it is held that the claim of deduction u/s. 80IA(4) amounting to Rs. 24,57,81,31 3/-is allowable to the appellant for the A.Y. Bothra Shipping Services Pvt. Ltd 2020-21, as the fact of the case for the Assessment Year 2020-21 is the same as in the A.Y. 2015-16 and 2016-17. In view of the same, the addition made by the Assessing Officer in this regard is deleted and the appeal of the appellant as raised through ground of appeal no. 1 is allowed. 5.3 In the result, the ground of appeal no.1 is allowed.”
8. Keeping in view the above findings of the ld. CIT(A) and considering the Hon’ble Calcutta High Court’s decision in assessee’s own case, we do not find any infirmity in the impugned order and the appeal of the revenue is hereby dismissed.
In the result, the appeal of the revenue is dismissed.
Kolkata, the 12th September, 2025.