COMMISSIONER OF INCOME TAX, DELHI-1 versus M/S CONTAINER CORPORATION OF INDIA LTD.

Citation: [2018] 5 S.C.R. 607 · Decided: 24-04-2018 · Supreme Court of India · Bench: R.K. AGRAWAL · Disposal: Disposed off

Judgment (excerpt)

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COMMISSIONER OF INCOME TAX, DELHI-1
v.
M/S CONTAINER CORPORATION OF INDIA LTD.
(Civil Appeal No. 8900 of 2012)
APRIL 24, 2018
[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]
Income Tax Act, 1961 – s.80-IA – Deduction under s.80-IA
on the profits earned from the Inland Container Depots – Held:
The ICDs are Inland Ports and are subject to the provisions of
s.80-IA – Deduction can be claimed for the income earned out of
these Depots – Customs Act, 1962 – s.2(12), 7(1)(aa).
Disposing of the appeals, the Court
HELD: 1. The Inland Container Depots (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 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 ICDs for the unloading of imported
goods and the loading of export goods. [Para 10][613-F-H;
614-A-B]
2. 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 profits and gains
   [2018] 5 S.C.R. 607
   607
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SUPREME COURT REPORTS
[2018] 5 S.C.R.
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.  Section 80 IA (12) (a)
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. 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.  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.  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.
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, the Notifications which
were issued in legitimate exercise of the power conferred on the
Board would not cease to have effect after the Assessment Year
2002-03.  [Paras 11, 13, 15, 16, 18] [614-B-D; 615-A-C, D-E;
616-A-C]
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3. The Respondent has been held e

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