Mundra International Container Terminal Private Limited Vs DCIT (ITAT Ahmedabad)
Revenue Fails on ₹383 Cr 80IA Disallowance – Assessee’s DDT Claim Also Rejected; Section 14A Restricted, 80IA Deduction Allowed, Intangible assets Depreciation Sustained – Tribunal Follows Past Precedents
These were cross appeals for AY 2017-18 (by both assessee & Revenue) & Revenue’s appeal for AY 2018-19.
Section 14A disallowance:
AO disallowed ₹1.12 crore applying Rule 8D on investments of over ₹123 crore in shares & mutual funds. CIT(A) restricted disallowance to ₹24 lakh, considering only mutual fund investments where exempt income of ₹2.02 crore was earned. Tribunal upheld CIT(A)’s approach, holding that disallowance must relate only to income-yielding assets. Thus, both assessee’s plea against ₹24 lakh & Revenue’s plea for restoring ₹1.12 crore were dismissed.
Depreciation on intangible assets:
Revenue contested CIT(A)’s allowance of ₹2.40 crore depreciation on “Infrastructure Usage Facility.” Tribunal noted this issue had been consistently decided in assessee’s favour in earlier years (from AY 2004-05 onwards) & that depreciation allowed in past cannot be disturbed. Relying on precedents including Gujarat HC in S.K. Patel Family Trust, ITAT upheld CIT(A) & dismissed Revenue’s ground.
Deduction u/s 80IA(4):
Revenue challenged deletion of disallowance of ₹383.13 crore (AY 2017-18) & ₹388.83 crore (AY 2018-19). Tribunal held the issue was squarely covered in assessee’s own case for AY 2016-17, supported by Madras HC rulings in A.L. Logistics Pvt Ltd & Chettinad Lignite Transport Services Pvt Ltd. Since assessee operated & maintained infrastructure facilities under valid concession agreements, deduction u/s 80IA(4) was allowable. Revenue’s appeals were dismissed.
