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India: “Inland container depots” are “inland ports,” tax benefits

India: “Inland container depots” are “inland ports”

The Supreme Court of India held that “inland container depots” are “inland ports,” and that the taxpayer was eligible for a benefit under section 80-IA of the Income-tax Act, 1961 on profits earned from inland container depots.


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The case is: CIT v. Container Corporation of India Ltd.


The taxpayer (a “government company”) was engaged in handling and transporting cargo in containers under the direct administrative control of the Ministry of Railways, with operating activities mainly carried out at inland container depots, container freight stations, and port-side container terminals.

The taxpayer—during assessment years 2003-2004 to 2005-2006—claimed various deductions, including under section 80-IA of the Income-tax Act, 1961. The deduction, as claimed on the profits earned from the inland container depots and relating to rolling stocks, was rejected by the Assessing Officer, and also denied by the Commissioner of Income-tax (Appeals). The deductions were allowed by a tribunal with regard to rolling stocks, but not as to the inland container depots. A high court held that the taxpayer was entitled to claim a deduction on the income earned from the inland container depots. The tax department appealed to the Supreme Court.

The Supreme Court held that inland container depots are inland ports and are thus eligible for the tax benefits under section 80-IA of the Income-tax Act, 1961 on the profits earned from the inland container depots.


Read a May 2018 report [PDF 731 KB] prepared by the KPMG member firm in India

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