R  EPORTABLE  

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

    CIVIL APPEAL NO. 8900 OF 2012

Commissioner of Income Tax, Delhi-1            …..Appellant(s)

    Versus

M/s Container Corporation of India Ltd.       …..Respondent(s)

WITH  

CIVIL APPEAL No. 8901 of 2012 CIVIL APPEAL No. 4409 of 2014 CIVIL APPEAL No. 4983 of 2015 CIVIL APPEAL No. 8546 of 2015 CIVIL APPEAL No. 66 of 2016 CIVIL APPEAL No. 8034 of 2016 CIVIL APPEAL No. 6982 of 2016 CIVIL APPEAL No. 6635 of 2016 CIVIL APPEAL No. 9651 of 2016 CIVIL APPEAL No. 7211 of 2016 CIVIL APPEAL No. 7210 of 2016 CIVIL APPEAL No. 7209 of 2016 CIVIL APPEAL No. 8033 of 2016 CIVIL APPEAL No. 8032 of 2016 CIVIL APPEAL No. 10336 of 2016

                    CIVIL APPEAL NO. 4487 OF 2018                    (Arising out of Special Leave Petition (C)  

 No. 24512 OF 2016) CIVIL APPEAL No. 8755 of 2016 CIVIL APPEAL No. 9158 of 2016

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CIVIL APPEAL No. 9157 of 2016 CIVIL APPEAL No. 8352 of 2016 CIVIL APPEAL No. 9159 of 2016 CIVIL APPEAL No. 10307 of 2016 CIVIL APPEAL No. 9744 of 2016 CIVIL APPEAL No. 9743 of 2016 CIVIL APPEAL No. 10308 of 2016 CIVIL APPEAL NO. 4543 OF 2018  

 (Arising out of Special Leave Petition (C)    No. 30630 OF 2016)

CIVIL APPEAL No. 10662 of 2016 CIVIL APPEAL No. 11709 of 2016

CIVIL APPEAL (C) NO. 4484 OF 2018    (Arising out of Special Leave Petition (C)  

No.1106 OF 2018 @ SLP(C)... (CC) No. 3354 OF 2017)

CIVIL APPEAL No. 1441 of 2017 CIVIL APPEAL No. 4458 of 2017 CIVIL APPEAL NOs. 4493-4494 OF 2018  

 (Arising out of Special Leave Petition (C)  Nos. 17056-17057 OF 2017)

CIVIL APPEAL No. 4459 of 2017 CIVIL APPEAL No. 5571 of 2017 CIVIL APPEAL No. 5573 of 2017 CIVIL APPEAL No. 6800 of 2017 CIVIL APPEAL No. 11075 of 2017 CIVIL APPEAL NO. 4499 OF 2018  

 (Arising out of Special Leave Petition (C)  No. 18849 OF 2017)

CIVIL APPEAL No. 9364 of 2017 CIVIL APPEAL No. 9487 of 2017 CIVIL APPEAL No. 9277 of 2017 CIVIL APPEAL No. 10236 of 2017

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CIVIL APPEAL No. 14900 of 2017 CIVIL APPEAL No. 16162 of 2017 CIVIL APPEAL No. 11202 of 2017 CIVIL APPEAL NO. 4548 OF 2018  

 (Arising out of Special Leave Petition (C)  No. 23116 OF 2017)

CIVIL APPEAL No. 15028 of 2017 CIVIL APPEAL No. 11117 of 2017 CIVIL APPEAL No. 15033 of 2017 CIVIL APPEAL No. 11160 of 2017 CIVIL APPEAL NO. 4547 OF 2018  

 (Arising out of Special Leave Petition (C)  No. 23115 OF 2017)

CIVIL APPEAL No. 15494 of 2017 CIVIL APPEAL No. 15497 of 2017 CIVIL APPEAL No. 17315 of 2017

   CIVIL APPEAL NO. 4655 OF 2018    (Arising out of Special Leave Petition (C)  

No. 11535 OF 2018) (DIARY NO. (s) 26081 of 2017)

CIVIL APPEAL No. 17534 of 2017 CIVIL APPEAL No. 17317 of 2017 CIVIL APPEAL No. 17318 of 2017 CIVIL APPEAL No. 18272 of 2017 CIVIL APPEAL No. 19491 of 2017

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CIVIL APPEAL No. 19535 of 2017 CIVIL APPEAL No. 19935 of 2017

CIVIL APPEAL NO. 4645 OF 2018    (Arising out of Special Leave Petition (C)  

No. 32825 OF 2017)

J U D G M E N T

R.K.Agrawal, J.

1) Leave granted.

2) The present appeal has been filed against the judgment

and order dated 11.05.2012 passed by the High Court of Delhi

in  ITA  Nos.1411  of  2009,  ITA  Nos.  967  and  968  of  2011

wherein the Division Bench of the High Court while allowing

the above appeals filed by the respondent herein set aside the

order dated 27.02.2009 passed by the Income Tax Appellate

Tribunal (in short ‘the Tribunal’) holding that the respondent

herein is entitled to claim the benefit of Section 80-IA of the

Income Tax Act,1961(in short ‘the IT Act’).

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3) Brief facts:

(a) M/s Container Corporation of India Ltd. (CONCOR)-the

respondent herein is a government Company and is engaged

in  the  business  of  handling  and  transportation  of

containerized  cargo  and  is  under  the  direct  administrative

control  of  Ministry  of  Railways.  Its  operating  activities  are

mainly  carried  out  at  its  Inland  Container  Depots  (ICDs),

Container  Freight  Stations  (CFSs)  and  Port  Side  Container

Terminals (PSCTs) spread all over the country.

(b) The issue in the present case pertains to the assessment

year  2003-04  to  2005-06.  The  respondent  herein  filed  the

returns  on  the  income  for  all  these  years  and  claimed

deduction  under  various  heads  including  deduction  under

Section 80-IA of the IT Act. This issue is with regard to the

deduction claimed under Section 80-IA on the profits earned

from the Inland Container Depots (ICDs) and on rolling stocks.

The claim for deduction on the profits earned from the ICDs

and further  the  deduction on account  of  rolling stocks has

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been rejected by the Assessing Officer vide Assessment Order

dated 28.02.2006.  

(c) The  respondent  herein,  being  aggrieved  with  the

aforesaid order,  filed an appeal  being No.  325/05-06 to the

Commissioner of Income Tax (Appeals)-VI, New Delhi. Learned

CIT (Appeals), vide order dated 29.05.2007, partly allowed the

appeal  while  rejecting  the  deduction  claimed under  Section

80-IA of  the  IT Act.  Being aggrieved,  the  respondent  herein

further preferred ITA Nos. 2851 & 3680/DEL./2007, 2753 &

4477/DEL/2007 before the Tribunal. The Tribunal, vide order

dated 27.02.2009, partly allowed the appeal and held that the

deduction under Section 80-IA can be claimed with regard to

the rolling stocks of the company but not with regard to the

ICDs.

(d) Being  aggrieved  by  the  order  dated  27.02.2009,  the

respondent herein challenged the same before the High Court

by filing three Income Tax Appeals being Nos. 967 of 2011,

1411 of 2009 and 968 of 2011. The Division Bench of the High

Court, vide judgment and order dated 11.05.2012, allowed the

appeals  and held  that  the  Respondent  herein  is  entitled  to

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claim deduction on the income earned from the ICDs for the

relevant period under consideration under Section 80-IA of the

IT  Act.  Being  aggrieved  by  the  judgment  and  order  dated

11.05.2012, the Revenue has preferred this appeal before this

Court.

4) Heard learned senior counsel for the parties and perused

the factual matrix of the case.

Points for consideration:-

5) The  only  point  for  consideration  before  this  Court  is

whether in the facts and circumstances of the case the Inland

Container Depots (ICDs) under the control of the Respondent,

during  the  relevant  period,  qualified  for  deduction  under

Section 80-IA(4) of the IT Act or not.

Rival contentions:-  

6) Learned  senior  counsel  appearing  for  the  appellant

contended that the High Court was not right in holding that

the Respondent is entitled to deduction under Section 80-IA of

the IT Act as the activities undertaken by the assessee cannot

be  said  to  fall  within  Explanation  (d)  of  Section  80-IA(4)

defining the term infrastructure facility.  

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7) Learned senior counsel further contended that the High

Court was wrong in placing reliance on the Notification dated

01.09.1998  issued  by  the  Central  Board  of  Direct  Taxes

(CBDT)  to  hold  that  the  Respondent  is  allowed  to  claim

deduction under Section 80-IA of the IT Act as the power of

the said Board was taken away by the Finance Act, 2001 with

effect  from  01.04.2002.   Learned  senior  counsel  further

contended  that  in  view  of  the  aforesaid  amendment,  the

Notifications issued by the CBDT with regard to treating the

ICDs as infrastructure facility were applicable only upto the

Assessment Year 2002-03.   

8) Learned senior counsel finally contended that the ICDs

cannot be termed as ports or inland ports within the meaning

of  Section 80-IA(4)  so  as  to  allow them to  claim deduction

under the said Section and the judgment rendered by the High

Court is erroneous in the eyes of the law and is liable to be set

aside.

9) Per  contra,  learned  senior  counsel  appearing  for  the

Respondent  contended  that  the  High  Court  has  rightly  set

aside the judgment and order dated 27.02.2009 passed by the

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Tribunal.  Learned senior counsel further contended that once

the ICDs have been notified validly by the CBDT, by virtue of

the powers conferred upon them, the fact that at a later point

of time the power was taken away does not put an end to the

validity  or  effect  of  the  notification and as per  the  relevant

Section  as  it  stood  at  the  time  when  the  notification  was

issued, the Respondent was eligible for deduction for a period

of  10  successive  assessment  years  which  covers  the

Assessment Years 2003-04 to  2005-06 which are  the  years

under appeal.  Learned senior counsel finally contended that

the judgment and order passed by the High Court does not

call for any interference.

Discussion:

10) As the whole point in dispute revolves around the ICDs,

it would be appropriate to have an understanding about the

same.  The  ICDs  function  for  the  benefit  of  exporters  and

importers located in industrial centers which are situated at

distance from sea ports. The purpose of introducing them was

to  promote  the  export  and  import  in  the  country  as  these

depots acts as a facilitator and reduce inconvenience to the

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person  who  wishes  to  export  or  import  but  place  of  his

business is situated in a land locked area i.e., away from the

sea.  These  depots  reduce  the  inconvenience  in  import  and

export in the sense that it  reduces the bottlenecks that are

arising  out  of  handling  and  customs  formalities  that  are

required to be done at the sea ports by allowing the same to be

done at these depots only that are situated near to them. The

term ICDs was inserted in 1983 under Section 2(12)  of  the

Customs Act, 1962 which defines ‘customs port’ and by the

provisions of Section 7(1)(aa) of the Customs Act,1962 power

has  been  given  to  the  Central  Board  of  Excise  and

Custom(CBEC) to notify which place alone to be considered as

Inland Container Depots for the unloading of imported goods

and the loading of export goods by Notification in the official

Gazette.

11) With  the  purpose  of  boosting  country’s  infrastructure

and  specially  the  transport  infrastructure,  the  Finance  Act,

1995  which  came  into  effect  from  01.04.1996  brought  an

amendment to the provisions of Section 80-IA of the IT Act.

Section 80-IA of the IT Act talks about deduction in respect of

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profits and gains from industrial  undertaking or enterprises

engaged  in  the  infrastructure  development  etc.   The  said

amendment for the first time brought a provision under which

a  percentage  of  profits  derived  from  the  operation  of

infrastructure  facility  was  allowed  a  deduction  while

computing  the  income  of  the  assessee.  A  ten  years  tax

concession allowed to the enterprises in accordance with the

provisions of  the Section subject to fulfillment of  conditions

given  therein,  which  develops,  maintains  and  operates  any

new  infrastructure  facility  such  as  roads,  highways,

expressways, bridges, airports, ports and rail system or any

other public facility of similar nature as notified.

12) The relevant  portion of  Section 80IA (as it  stood then)

reads as under:

“Section 80-IA(4A):This section applies to:--  any enterprise carrying on the business of developing, maintaining and operating any infrastructure facility which fulfills the following conditions, viz.,

Section 80-IA(5)  clause(ia):  in  the  case  of  enterprise referred  to  in  sub-section  (4A)  hundred  percent  of profits and gains derived from such business for the initial five assessment years and thereafter thirty per cent of such profits and gains.”

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13) The term infrastructure facility had also been defined

which at the relevant time stood as follows:-  

“Section 80-IA(12)(ca): Infrastructure facility means:-   a road, highway, bridge, airport, port or rail system or any other public facility of similar nature as may be notified by the Board in this behalf in Official Gazette;”

The  said  provision  gives  the  power  to  the  Board  to  notify

certain other enterprises which can avail the benefit of Section

80-IA of the IT Act, which do not fall within any of the specified

categories but carries out activities of similar nature.

14) Further,  Central  Board  of  Direct  Taxes  (CBDT),  in

exercise  of  its  power  under  Section  80-IA(12)(ca),  vide

Notification No.S.O.744(E) dated 01.09.1998 notified ICDs and

CFSs as infrastructure facility.

15) In addition to the above, the Finance Act, 1998, which

came  into  effect  on  01.04.1999,  made  a  change  in  the

definition  of  ‘Infrastructure  facility’  as  is  relevant  to  the

present case. The words ‘Inland water ways and inland ports’

were added in the definition of infrastructure facility. Now, the

definition reads as under:

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“Infrastructure  Facility  means  road,  bridge,  airport,  port, inland waterways and inland ports, rail system by any other public facility of  similar nature as may be notified by the Board in this behalf in official Gazette.”

16) A noticeable change was further brought by the Finance

Act,  2001,  which  came  into  effect  from 01.04.2002,  in  the

terms that the power of the Board to extend the benefit of the

said provisions to any infrastructure facility of similar nature

by issuing a Notification was taken away. The new explanation

to  Section  80-IA(4)  of  the  IT  Act  as  is  substituted  by  the

Finance Act, 2001 reads as under:

For the purpose of this clause “infrastructure facility” means- (a) a road including  toll road, a bridge or a rail system; (b)  a highway project  including housing or  other activities being an integral part of the highway project; (c) a water supply project, water treatment system, irrigation project,  sanitation  and  sewerage  system  or  solid  waste management system; (d) a port, airport, inland waterways or inland port;

17) It was contended on behalf of the appellant that the High

Court erred in relying on the Notification issued by CBDT to

hold that the enterprises holding ICDs are allowed to claim

deductions under Section 80-IA of  the  IT Act.   As the  said

power  of  the  Board  was  specifically  taken  away  by  the

amendment made by Finance Act, 2001, in light of the said

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amendment, the Notifications which were issued by the CBDT

would cease to operate after the Assessment Year 2002-03.  

18) The argument put forward by learned senior counsel for

the  appellant  does  not  have  much  force  as  the  said

amendment is silent with regard to any effect it would have

upon  the  Notifications  issued  earlier  by  the  Board  in  due

exercise  of  its  power.  Had  it  been  the  intention  of  the

legislature that the Notifications issued by the Board earlier

are of no effect after 2002-03, it would have had found a place

in the said amendment. In the absence of the same, we are

unable  to  concur  with  learned  senior  counsel  that  the

Notifications which were issued in legitimate exercise of  the

power conferred on the Board would cease to have effect after

the Assessment Year 2002-03.

19) Learned senior counsel for the appellant contended that

the High Court committed a grave error in holding ICDs as

Inland Ports. It was further contended that the ICDs are never

understood to fall  in the category of  ‘Inland Port’  under the

scheme  of  the  IT  Act.  The  argument  in  support  of  this

contention is  that  if  the  word ‘Inland Port’,  as  used in the

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Explanation attached to Section 80-IA(4) of the IT Act defining

‘infrastructure facility’  includes ICDs, there would have been

no need for the CBDT to separately exercise its power given

under  the  said  Section,  as  it  stood  then,  to  notify  it  as

infrastructure facility.  However, the argument does not hold

much weight behind it as the Notification which was issued by

the CBDT came into effect on 01.09.1998 i.e., the time when

the  term  ‘Inland  Port’  was  not  in  itself  inserted  in  the

provisions of Explanation attached to Section 80-IA(4) of the IT

Act defining the term ‘infrastructure facility’.  It was inserted

through  Finance  Act,  1998  which  came  into  effect  from

01.04.1999.  So  there  seems  to  be  no  conflict  within  the

Notification issued by the Board and the fact that the ICDs are

Inland Ports or not.

20) Moreover,  we  find  that  the  Respondent  has  been held

entitled  for  the  benefit  of  Section 80IA of  the  IT Act  much

before  the  Finance  Act,  2001  which  came  into  force  on

01.04.2002 and exemption for the period of 10 years cannot

be  curtailed  or  denied  by  any  subsequent  amendment

regarding the eligibility conditions under the period is modified

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or specific provision is made that the benefit from 01.04.2002

onwards shall only be claimed by the existing eligible units if

they fulfill the new conditions.   

21) Moving  further  to  the  issue  whether  the  ICDs  can  be

termed  as  Inland  Ports  so  as  to  entitle  deduction  under

Section  80-IA  of  the  IT  Act.  The  term  port,  in  commercial

terms, is a place where vessels are in a habit of loading and

unloading goods. The term ‘Port’ as is used in the Explanation

attached  to  Section  80-IA(4)  seems  to  have  maritime

connotation perhaps that is the reason why  the word airport

is found separately in the Explanation. Considering the nature

of work that is performed at ICDs, they cannot be termed as

Ports. However, taking into consideration the fact that a part

of  activities  that  are  carried  out  at  ports  such  as  custom

clearance are also carried out at these ICDs, the claim of the

respondent herein can be considered within the term ‘Inland

port’ as is used in the Explanation. It is significant to note that

the word ‘Inland Container Depots’ was first introduced in the

definition of ‘Customs Port’ as is given in Section 2(12) of the

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Customs Act, 1962, through amendment made by the Finance

Act, 1983 with effect from 13.05.1983.  

22) The term ‘Inland Port’ has been defined nowhere. But the

Notification  that  has  been  issued  by  the  Central  Board  of

Excise & Customs (CBEC) dated 24.04.2007 in terms holds

that considering the nature of work carried out at these ICDs

they  can  be  termed  as  Inland  Ports.  Further,  the

communication  dated  25.05.2009  issued  on  behalf  of  the

Ministry of Commerce and Industry confirming that the ICDs

are Inland Ports, fortifies the claim of the respondent herein.

Though  both  the  Notification  and  communication  are  not

binding on CBDT to decide whether ICDs can be termed as

Inland Ports within the meaning of Section 80-IA of the IT Act,

the appellant herein is unable to put forward any reasonable

explanation as to why these notifications and communication

should  not  be  relied  to  hold  ICDs  as  Inland  Ports.  Unless

shown otherwise, it cannot be held that the term ‘Inland Ports’

is used differently under Section 80-IA of the IT Act. All these

facts taken together clear the position beyond any doubt that

the ICDs are Inland Ports and subject to the provisions of the

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Section and deduction can be claimed for the income earned

out of these Depots.  However, the actual computation is to be

made in accordance with the different Notifications issued by

the Customs department with regard to different ICDs located

at different places.

23) In light of the forgoing discussion, we are of the view that

judgment of the High Court does not call for any interference

and,  hence,  the  appeal  is  accordingly  dismissed.   All  the

connected appeals are disposed of accordingly. The parties to

bear cost on their own.

…….....…………………………………J.      (R.K. AGRAWAL)

…….…………….………………………J.   (ABHAY MANOHAR SAPRE)

NEW DELHI; APRIL  24, 2018.  

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