Sunday, July 8, 2012

Scope of s. 153A assessment & 80IA(4) deduction Explained

All Cargo Global Logistics Ltd vs. DCIT (ITAT Mumbai Special Bench)
The Special bench had to consider two issues (i) whether an assessment u/s 153A encompassed additions not based on any incriminating material found during the search and (ii) whether a “Container Freight Station” was an “Inland Port/ Infrastructure facility” for purposes of deduction u/s 80IA(4). HELD by the Special Bench:

(i) In assessments that are abated, the AO retains the original jurisdiction as well as the jurisdiction conferred on him by s. 153A for which assessments shall be made for each of the 6 assessment years separately;

(ii) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material i.e. (a) the books of accounts and other documents found in the course of the search but not produced in the course of original assessment and (b) undisclosed income or property disclosed in the course of search;

(iii) A Container Freight Station, like an Inland Container Depot, is an “Inland Port” having regard to the fact that it is referred to as such in the statutory provisions and in the understanding of the CBEC, which administers the Customs Act. It has also been treated as part of the customs port for purpose of customs formalities and clearances. Accordingly, it is an “infrastructure facility” for purposes of s. 80IA(4)

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