Sravan Shipping Services Private Limited, Visakhapatnam V. The Assistant Commissioner of Income Tax, Central Circle-2, Visakhapatnam

CO 116/VIZ/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2675 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 07-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 22-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K SONOWAL
• Keywords: Assessment record; Set aside
• Section: 143(3); 80IA; 12

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO S . 430 - 433 /VIZ/201 8 ( / ASSESSMENT YEAR S : 2011 - 12 TO 2014 - 15 RESPECTIVELY ) THE ASST.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 2 VISAKHAPATNAM VS. M/S SRAVAN SHIPPING SERVICES PVT. LTD. 4 TH FLOOR, POTLURI CLASSIC D.NO.47 - 14 - 3, DWARAKANAGAR VISAKHAPATNAM [PAN :AADCS1257P] ( / APPELLANT) ( / RESPONDENT) CROSS OBJECTION NOS.113 - 116/VIZ/2018 (ARISING OUT OF I .T.A.NO S . 430 - 433/VIZ/2018) ( / ASSESSMENT YEAR S : 2011 - 12 TO 2014 - 15 RESPECTIVELY) M/S SRAVAN SHIPPING SERVICES PVT. LTD. 4 TH FLOOR, POTLURI CLASSIC D.NO.47 - 14 - 3, DWARAKANAGAR VISAKHAPATNAM [PAN :AADCS1257P] VS. THE ASST.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 2 VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) /REVENUE BY : SHRI D.K.SONOWAL, DR / ASSESSEE BY : SHRI G.V.N.HARI , A R / DATE OF HEARING : 03 . 0 6 . 201 9 / DATE OF PRONOUNCEMENT : 07 .06 . 201 9 2 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM / O R D E R P ER BENCH : THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] - 3, VISAKHAPATNAM DATED 17.05.2018 AND CROSS OBJECTIONS ARE FILED BY THE ASSESSEE FOR THE A.Y.2011 - 12 TO 2014 - 15. SINCE THE FACTS INVOLVED IN ALL T HESE APPEALS ARE IDENTICAL, THE APPEALS ARE CLUBBED, HEARD TOGETHER AND DISPOSED OF F IN A COMMON ORDER FOR THE SAKE OF CONVENIENCE AS UNDER : 2. WE FIRST TAKE UP THE APPEAL FOR THE A.Y. 2011 - 12 AND EXTRACT THE FACTS FROM THE SAID ASSESSMENT RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF STEVEDORING, TRANSPORTATION AND WAREHOUSING , F ILED ITS RETURN OF INCOME FOR THE A.Y.2011 - 12 THROUGH E - FILI NG ON 29.09.2011 DECLARING TOTAL INCOME OF RS.3,77,21,730/ - AFTER CLAIMING THE DEDUCTION OF RS.3,68,28,209/ - U/S 80IA OF THE INCOME TAX ACT, (IN SHORT ACT). THE ASSESSMENT WAS COMPLETED U/S 143(3) IN THIS CASE ON TOTAL IN COME OF RS.7,59,49,939/ - . IN THE ASSESSMENT MADE U/S 143(3), THE AO DISALLOWED DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IA OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HA S CLAIMED DEDUCTION U/S 80IA OF THE ACT FOR AN AMOUNT 3 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM OF R.3,6 8,28, 209/ - FOR OPERATING AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY I.E. CONTAINER FREIGHT STATION (CFS). THE AO CALLED FOR THE EXPLANATION OF THE ASSESSEE AS TO WHY THE DEDUCTION CLAIMED U/S 80IA SHOULD NOT BE DISALLOWED FOR NOT HAVING SATISFIED THE COND ITIONS LAID DOWN U/S 80IA, I.E. , NOT HAVING AN AGREEMENT WITH THE CENTRAL GOVERNMENT OR STATE GOVERNMENT OR LOCAL AUTHORITIES. SIMILARLY, THE AO WAS ALSO OF THE VIEW THAT CFS IS NOT A PORT FOR THE PURPOSE OF CLAIMING THE DEDUCTION U/S 80IA(4) AND RELIED ON BOARD CIRCULAR NO. 10/2005 DATED 16.12.2005 AND CIRCULAR NO.793 DATED 23.06.2000. THE ASSESSEE FILED EXPLANATION STATING THAT THE ASSESSEE HAD ESTABLISHED A CFS AT MULA GADA, MINDI, VISAKHAPATNAM FOR IMPORT AND EXPORT OF FREIGHT. NECESSARY PERMISSION WAS ACCORDED BY MIN ISTRY OF COMMERCE AND INDUSTRY, THE DEPARTMENT OF COMMERCE DIVISION, GOVT. OF INDIA VIDE LETTER N O.16/6/2001 - INFRA - I DATED 2 2 . 10 .200 1 . THE ASSESSEE ALSO HAS PRODUCED THE COPY OF THE SAID APPROVA L LETTER AN D SUBSEQUENT LETTER DATED 11.06.2004 AND THE LETTER OF INTENT TILL 31.07.2004 BEFORE THE AO. THE COMMISSIONER OF CUSTOMS, VISAKHAPATNAM PORT AREA HAS ALSO DECLARED THE CFS AREA OF THE ASSESSEE COMPANY AS CUSTOMS AREA FOR STORAGE OF CONTAINER GOODS IMPORTED THROUGH VISA KHAPATNAM PORT AND FOR STUFFING OF EXPORT CARGO AND DESTUFFING OF IMPORT CARGO EXPORTED / IMPORTED 4 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM THROUGH VISAKHAPATNAM PORT V IDE NOTIFICATION NO.1/2004 - CUS DATED 21.06.2004. SUBSEQUENTLY, THE COMMISSIONER OF CUSTOMS VIDE NOTIFICATIO N OF CARGO , IMPORTED AND EXPORTED THROUGH ITS CONTAINER FREIGHT STATION. A PUBLIC NOTICE WAS ALSO ISSUED TO THAT EFFECT VIDE NOTICE NO.29/2004 DATED 12.06.2004. THE ASSESSEE SUBMITTED ALL THE NECESSARY EVIDENCES, COPIES OF THE LETTERS WITH REGARD TO ELIG IBILITY FOR DEDUCTION U/S 80IA AND ARGUED THAT THE CFS IS TREATED AS INFRASTRUCTURE AND ENTITLED FOR DEDUCTION/S 80IA(4) OF THE I NCOME T AX A CT . THE ASSESSEE ALSO RELIED ON THE DECISION OF HONBLE INCOME TAX SETTLEMENT COMMISSION IN THE ASSESSEES OWN CASE. THE AO , NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE DISALLOWED THE DEDUCTION U/S 80IA FOR THE REASON THAT THE ASSESSEE HAS NO T ENTERED INTO AN A GREEMENT WITH GOVT. OF INDIA OR STATE OR LOCAL AUTHORITY FOR THE PURPOSE OF DEVELOPING THE INFRASTRUCTURE . THE AO FUR T HER HELD THAT THE ASSESSEE DOES NOT FALL UNDER THE PURVIEW OF INLAND PORT AND ALSO MADE OBSERVATION THAT CFS IS NOT AN EXTENSION OF PORT. THE LD.AO DID NOT FOLLOW THE DECISION OF INCOME TAX SETTLEMENT COMMISSION (ITSC) ON THE G ROUND THAT THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF ITSC AND FILED WRIT PETITION BEFORE THE HONBLE HIGH COURT, CHENNAI, CHALLENGING THE DECISION OF SETTLEMENT COMMISSION. ACCORDINGLY, DISALLOW ED THE DEDUCTION CL A IMED 5 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM U/S. 80IA(4) AND MADE THE ADDITION OF RS.3,68,28,209/ - FOR THE A.Y. 2011 - 12. IDENTICAL ADDITION WAS MADE FOR THE A.Y. 2012 - 13 TO 2014 - 15 AS UNDER: A.Y. AMOUNT OF ADDITION (RS.) 2012 - 13 4,77,64,091/ - 2013 - 14 11,29,27,668/ - 2014 - 15 13,66,14,719/ - 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE FOLLOWING THE DECISION OF THIS TRIBUNAL IN THE CASE OF GATEWAY EA S T INDIA (P) LTD, VS ACIT IN ITA NO.15/VIZAG/2015 DATED 29/04/2012 FOR THE A.Y.2011 - 12 . 4. AGAINST THE ORDER OF THE LD.CIT(A), THE REVENUE HAS FILED APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, THE LD.DR RELIED ON THE ORDER OF THE AO AND HEAVILY PLACED RELIANCE ON CBDT CIRCULAR NO.178/42/2010 DATED 06.01.20 1 1 AND ARGUED THAT THE CFS IS NOT A P O RT FOR CLAIMING DEDUCTION U/S 80IA(4) AND ALSO ARGUED THAT THE ASSESSEE HAS NOT SATISF I ED THE CONDITION WITH REGARD TO ENTERING AGREEMENT WITH THE GOVERNMENT OR LOCAL AUTHORITY FOR DEVELOPMENT OF INFRASTRUCTURE . 6 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM 5. ON THE OTHER HAND, THE LD.AR RELIED ON THE ORDERS OF THE LD.CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THIS CASE, THE AO DISALLOWED CLAIM FOR DEDUCTION U/S 80IA FOR THE FOLLOWING REASONS. (I) THE ASSESSEE HAS NO AGR EE MENT WITH THE GOVT. OF INDIA/ STATE GOVERNMENT OR ANY LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR (I) DEVELOPING (II) OPERATING AND MAINTENANCE (III) DEVELOPING, OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY. (II) THE ASSESSEE HAS ESTABLISHED CFS ON ITS OWN LAND WHICH IS OUTSIDE THE LIMITS OF THE PORT. THEREFORE, IT DOES NOT FALL UNDER THE PURVIEW OF INLAND PORT. (III) THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE TO STATE THAT CFS IS AN EXTENSION OF PORT. THE ASSESSEE R EPLIED BEFORE THE AO AND FURNISHED ALL THE DETAILS WITH REGARD TO APPROVAL FROM MINISTRY OF COMMERCE AND INDUSTRY AND ALSO NOTIFICATION ISSUED BY THE COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE WHO DECLARED THE CFS AREA OF THE ASSESSEE COMPANY AS CUSTOMS AREA. 7 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM THEREFORE, THE OBSERVATION OF THE AO WITH REGARD TO SUBMISSION OF EVIDENCE REGARDING CFS AS EXTENSION OF PORT WAS ADDRESSED BY DECLARATION / NOTIFICATION MADE BY THE COMMISSIONER OF CUSTOMS U/S 8(A) OF THE CUSTOMS A CT 1962 FOR STORAGE OF CONTAINERS AND GOODS CONTAINED THEREIN, IMPORTED THROUGH VISAKHAPATNAM P ORT VIDE NOTIFICATION NO.1/2004 - CUS DATED 21 . 06 . 2004. THE ASSESSEE FURTHER STATED BEFORE THE AO THAT SUBSEQUENTLY THE COMMISSIONER OF CUSTOMS VIDE NOTIFICATION OF CARGO , IMPORTED AND EXPORTED T HROUGH ITS CONTAINER FREIGHT STATION. A PUBLIC NOTICE WAS ALSO ISSUED TO THAT EFFECT VIDE NOTICE NO.29/2004 DATED 12.06.2004, HENCE THE OBSERVATION OF THE AO THAT THE CF S IS OUTSIDE THE PURVIEW OF THE INLAND PORT AND THE CFS IS NOT EXTENSION OF PORT HAS NO LEGS TO STAND . ONCE THE COMMISSIONER CUSTOMS ISSUES NOTIFICATION DECLARING THE CFS AREA AS CUSTOMS AREA , THE DISPUTE STANDS ADDRESSED AS HELD IN VARIOUS JUDGMENTS OF HON'BLE HIGH COURTS . 6.1. HONBLE SUPREME COURT IN THE CASE OF CONT AINER CORPORATION OF INDIA LTD., IN CIVIL APPEAL NO.8900 OF 2012 DATED 24. 04 . 2018 HELD THAT THE ICDS ARE INLAND PORT FOR THE PURPOSE OF DEDUCTION U/S 80IA(4). FOR THE SAKE OF CLARITY WE REPRODUCE THE RELEVANT PART OF THE ORDER OF THE APEX COURT WHICH READS AS UNDER: 8 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM 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 WIT HIN 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 CUSTOMS ACT, 1962, THROUGH AMENDMENT MA DE 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 NAT URE 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 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 DI FFERENT 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. 6.2. THE ISSUES RAISED BY THE AO WITH REGARD TO NOT HAVING AGREEMENT, LOCATION OF CFS IN ITS OWN LAND AND EXTENSION OF INLAND PORT HAVE BEEN ELABORATELY DISCUSSED BY THIS TRIBUNAL IN THE CASE OF GATEWAY EAST INDIA (P) 9 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM LTD. IN ITS ORDER DATED 29.04.2015 VIDE I.T.A. NO.15/VIZ/2015. THE FACTS IN GATEWAY EAST INDIA (P) LTD. ARE IDENTICAL TO THE FACTS OF THE ASSESSEES CASE. THE COORDINATE BENCH OF ITAT HAS CONSIDERED THE ISSUE WITH REGARD TO AGREEMENT, DEFINITION OF INLAND PORT AND WHETHER CFS FALLS UNDER INLA ND PORT OR NOT ? AND ALLOWED THE APPEAL OF THE ASSESSEE. THE LD.CIT(A) FOLLOWED THE DECISION OF THIS TRIBUNAL AND ALLOWED THE APPEAL OF THE ASSESSEE. FOR THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT RELEVANT PART OF THE ORDER OF THE LD. CIT(A) WHICH IS M ADE AVAILABLE IN PAGE NO.3 TO 8 IN PARA NO.6.1 TO 6.5 WHICH READS AS UNDER : 6.1) THERE ARE (4) GROUNDS RAISED IN THE APPEAL. GROUND NOS.(1) & (4) ARE GENERAL IN NATURE, HENCE, NO SEPARATE ADJUDICAT ION IS REQUIRED. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS GROUND NO.(2) WHICH IS WITH REGARD TO THE ADDITION MADE BY THE ASSESSING OFFICER BY DISALLOWING THE DEDUCTION CLAIMED U/S 80IA OF THE ACT. ON A CAREFUL CONSIDERATION OF THE SUBMISSIONS MADE BY THE APPELLANT, I FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF GATEWAY EAST INDIA PVT. LTD.(SUPRA). IN THAT CASE ALSO, THE ASSESSEE WAS OPERATING A CFS AT SHEELANAGAR, PORT ROAD, VISAKHAPATNAM. T HE ASSESSING OFFICER HAS DISALLOWED THE DEDUCTION CLAIMED U/S. 80IA EXACTLY ON SIMILAR GROUNDS. THE HONBLE BENCH HAS DISCUSSED ALL THE ISSUES AT LENGTH AND HELD THAT THE DEDUCTION U/S 80(IA) WAS RIGHTLY CLAIMED. THE RELEVANT PORTION OF THE ORDER IS E XTRACTED HEREUNDER: 7. RIVAL CONTENTIONS HEARD. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO ON PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAW CITED, WE HOLD AS FOLLOWS: 8. IN CIRCULAR NO . 18/2009 DATED 08/06/2009 ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS IN F.NO. 434/17/2009 - CUS.IV THE DIFFERENCE BETWEEN INLAND CONTAINER DEPOTS (ICD) AND CONTAINER FREIGHT STATIONS(CFS) HAS BEEN SPELT OUT IN THE FOLLOWING MANNER: (A) DEFINITION OF ICD: AN INLAND CONTAINER DEPOT MAY BE DEFINED AS: A COMMON USER FACILITY WITH PUBLIC AUTHORITY STATUS (EMPHASIS SUPPLIED) EQUIPPED WITH FIXED 10 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM INSTALLATIONS AND OFFERING SERVICES FOR HANDLING AND TEMPORARY STORAGE OF IMPORT/EXPORT LADEN AND EMPTY CONTAINER S CARRIED UNDER CUSTOMS CONTROL AND WITH CUSTOMS AND OTHER AGENCIES COMPETENT TO CLEAR GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE - EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT. TRANSSHIPMENT OF CARGO CAN ALSO TAKE PLACE FR OM SUCH STATIONS. (B) DEFINITION OF CFS: A CONTAINER FREIGHT STATION MAY BE DEFINED AS: CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARA NCE BY THE CUSTOMS. FIRSTLY, CFS DO NOT HAVE 'PUBLIC AUTHORITY STATUS' WHEREAS ICD IS A PLACE THAT ACTS AS A 'SELF CONTAINED CUSTOMS STATION' AS CATEGORICALLY SPELT IN CIRCULAR OF CBEC DT. 08.06.2009. FURTHER THE SAID CIRCULAR CLEARLY DISTINGUISHES ICD AND CFS AND MAKES IT VERY OBVIOUS THAT CFS IS NOTHING BUT A WAREHOUSE. (C) DISTINCTION BETWEEN ICD & CFS: 'INLAND CONTAINER DEPOT IS A PLACE THAT ACTS AS A 'SELF CONTAINED CUSTOMS STATION' LIKE A PORT OR AIR CARGO UNIT WHERE FILLING OF CUSTOMS MANIFES TS, BILLS OF ENTRY, SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE - EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT, TRANSSHIPMENT, ETC., TAKES PLACE.' 'CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS'. AN ICD IS A 'SELF CONTAINE D CUSTOMS STATION' LIKE A PORT OR AIR CARGO UNIT WHERE FILING OF CUSTOMS MANIFESTS, BILLS OF ENTRYS, SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE - EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT, TRANSSHIPMENT, ETC., TAKE PLACE. AN ICD WOULD HAVE ITS OWN AUTOMATED SYSTEM WITH A SEPARATE STATION CODE [SUCH AS INTKD 6, INSNF6 ETC.] BEING ALLOTTED BY DIRECTORATE GENERAL OF SYSTEMS AND W ITH IN - BUILT CAPACITY TO ENTER EXAMINATION REPORTS AND ENABLE ASSESSMENT OF DOCUMENTS, PROCESSING OF MANIFEST, AMENDMENTS, ETC. 11 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXP ORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS. A CFS IS ONLY A CUSTOMS AREA LOCATED IN THE JURISDICTION OF A COMMISSIONER OF CUSTOMS EXERCISING CONTROL OVER A SPECIFIED CUSTOMS PORT, AIRPORT, LCS/LCD. A CFS CANNOT HAVE AN INDEPENDENT EXISTE NCE AND HAS TO BE LINKED TO A CUSTOMS STATION WITHIN THE JURISDICTION OF THE COMMISSIONER OF CUSTOMS. IT IS AN EXTENSION OF A CUSTOMS STATION SET UP WITH THE MAIN OBJECTIVE OF DECONGESTING THE PORTS. IN A CFS ONLY A PART OF THE CUSTOMS PROCESSES MAINLY THE EXAMINATION OF GOODS IS NORMALLY CARRIED OUT BY CUSTOMS BESIDES STUFFING/DESTUFFING OF CONTAINERS AND AGGREGATION/SEGREGATION OF CARGO. THUS, CUSTOM'S FUNCTIONS RELATING TO PROCESSING OF MANIFEST, IMPORT/EXPORT DECLARATIONS AND ASSESSMENT OF BILL OF ENTRY /SHIPPING BILL ARE PERFORMED IN THE CUSTOM HOUSE/CUSTOM OFFICE THAT EXERCISES JURISDICTION OVER THE PARENT PORT/AIRPORT LICD/LCS TO WHICH THE SAID CFS IS ATTACHED. IN THE CASE OF CUSTOMS STATIONS HAVING FACILITY OF AUTOMATED PROCESSING OF DOCUMENTS, TERMIN ALS ARE PROVIDED AT SUCH CFSS FOR RECORDING THE RESULT OF EXAMINATION, ETC. IN SOME CFSS, EXTENSION SERVICE CENTERS ARE AVAILABLE FOR FILING DOCUMENTS, AMENDMENTS ETC. HOWEVER, THE ASSESSMENT OF THE DOCUMENTS ETC. IS CARRIED OUT CENTRALLY. AN ICD MAY AL SO HAVE A NUMBER OF CFSS ATTACHED TO IT WITHIN THE JURISDICTION OF THE COMMISSIONER OF CUSTOMS JUST AS IN THE CASE OF A PORT AND ITS CFSS (AS ON DATE THERE ARE 28 CFSS LINKED TO CHENNAI PORT) [REFER CIRCULAR NO. 18/2009 - CUS. , DATED 8 - 6 - 2009]. A STANDA LONE CUSTOMS CLEARANCE FACILITY IN AN INLAND COMMISSIONERATE CANNOT BE APPROVED BY THE COMMISSIONER AS A CFS, IF THERE IS NO ICD/PORT WITHIN ITS JURISDICTION TO WHICH THE SAID CFS CAN BE ATTACHED. SUCH A FACILITY CAN, HOWEVER, BE NOTIFIED AS AN ICD I.E., A S AN INDEPENDENT CUSTOMS STATION WITH PROVISION FOR FILING AND ASSESSMENT OF DOCUMENTS AND EXAMINATION OF GOODS. A CUSTOMS CLEARANCE FACILITY COULD BE ESTABLISHED AS A CFS AT A PORT CITY FOR EXAMINATION OF IMPORTED/EXPORT GOODS, SINCE THE CFS WOULD FALL UN DER THE JURISDICTION OF COMMISSIONER OF CUSTOMS, HAVING JURISDICTION OVER THE CUSTOMS PORT WITH WHICH THE CFS WOULD BE ATTACHED. FURTHER, IN A PORT CITY SUCH AS CHENNAI OR MUMBAI, IT MAY BE POSSIBLE TO DEVELOP AN ICD WITHIN THE TERRITORIAL JURISDICTION OF THE CONCERNED CUSTOMS COMMISSIONERATE IN ADDITION TO EXISTING CFSS. SUCH AN ICD SHOULD BE CAPABLE OF PROVIDING FULL - FLEDGED CUSTOMS SERVICES, INDEPENDENT EDI SYSTEM, AND ALL PROCEDURES MEANT FOR TRANSHIPMENT OF CARGO HAVE TO BE FOLLOWED FOR MOVEMENT OF GOO DS FROM THE PORT OF IMPORT TO THE ICD. FURTHER, SUCH AN ICD WOULD FUNCTION AS AN INDEPENDENT CUSTOMS STATION IN ALL RESPECTS AND WOULD NOT BE ATTACHED TO ANY OTHER PORT OR AIRPORT. THUS, IN RESPECT OF PROPOSALS FOR SETTING UP OF ICD/CONTAINER FREIGHT STATI ON FROM PROSPECTIVE OPERATORS IT HAS TO BE EXAMINED WHETHER THE PROPOSED FACILITY IS REQUIRED TO BE APPROVED AS AN ICD OR CFS. MOVEMENT OF GOODS FROM A PORT/AIRPORT/LCS TO AN ICD IS IN THE NATURE OF MOVEMENT FROM ONE CUSTOMS STATION TO ANOTHER, GOVERNED BY GOODS IMPORTED 12 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM (CONDITION OF TRANSSHIPMENT) REGULATIONS, 1995. ON THE OTHER HAND, MOVEMENT OF GOODS FROM A PORT/AIRPORT/LCS OR AN ICD TO A CFS IS AKIN TO LOCAL MOVEMENT FROM A CUSTOMS AREA OF THE CUSTOMS STATION TO ANOTHER CUSTOMS AREA OF THE SAME STAT ION, COVERED BY LOCAL PROCEDURE EVOLVED BY THE COMMISSIONER OF CUSTOMS AND COVERED BY BONDS, BANK GUARANTEE, ETC. FURTHER, THE PERSON UNDERTAKING THE TRANSSHIPMENT WOULD BE REQUIRED TO FOLLOW THE PRESCRIBED PROCEDURE. AS RIGHTLY CONTENDED BY THE LEARNED AR OF THE APPELLANT, THE ABOVE CIRCULAR ANSWERS IN A VERY CLEAR AND CATEGORICAL MANNER THE OBJECTIONS RAISED BY THE ASSESSING OFFICER. 9. AS FAR AS THE CONTENTION THAT THERE IS NO AGREEMENT WITH ANY GOVERNMENT OR STATUTORY AUTHORITY, WE FIND THAT THE ASSESSEE HAS PLACED ON RECORD LETTER OF INTENT. IN FACT THE MINISTRY OF COMMERCE AND INDUSTRY, VIDE LETTER DATED 10/02/2005, WRITTEN TO THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY REGARDING SETTING UP OF A CFS AT VISAKHAPATNAM APROPOS THE ASSESSEES CASE. 10. IN THE CASE OF A L LOGISTICS P. LTD. (SUPRA) THE CHENNAI BENCH OF THE TRIBUNAL AT PARA 7 HELD AS FOLLOWS: 7. NOW, WE PROCEED TO THE NEXT ISSUE, WHETHER IN THE ABSENCE OF SPECIFIC AGREEMENT WITH THE CENTRAL/STATE GOVERNMENT, LOCAL AUTHORITY OR STATUTORY BODY, THE ASSESSEE IS ENTITLED TO CLAIM THE BENEFIT OF SECTION 80IA( 4 )(I)? THE ASSESSEE HAD MADE AN APPLICATION FOR SETTING UP OF CF S AT HALDIA. IN RESPONSE TO THE APPLICATION OF ASSESSEE, THE DEPARTMENT OF COMMERCE, INFRASTRUCTURE DIVISION, MINISTRY OF COMMERCE AND INDUSTRY APPROVED THE PROPOSAL OF THE ASSESSEE FOR SETTING UP OF CFS AT HALDIA FOR HANDLING IMPORT/EXPORT OF CARGO SUBJEC T TO EXECUTION OF CERTAIN DOCUMENTS AND COMPLIANCE OF OTHER TERMS AND CONDITIONS AS STATED IN THE LETTER. THE ID. COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD LETTER DT.27 - 05 - 2003 FROM THE MINISTRY OF COMMERCE AND INDUSTRY PERMITTING THE ASSESSEE TO SET U P CFS AT H ALDIA. THE CONTENTS OF THE LETTER ARE REPRODUCED HEREIN BELOW: 'NO. 16/6/2003 - LNFRA - I GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPTT.OF COMMERCE INFRASTRUCTURE DIVISION UDYOGBHAWAN, NEW DELHI, DATED THE 27TH MAY,2003. TO THE DIRECTOR, MLS A L LOGISTICS PVT. LTD., CHENNAI. SUBJECT: SETTING UP OF AN CFS AT HALDIA. 13 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM SIR, I AM DIRECTED TO REFER TO YOUR APPLICATION DATED 8.2.2003 ON THE ABOVE SUBJECT AND TO SAY THAT THE GOVERNMENT HAS APPROVED YOUR PROPOSAL FOR SETTING UP O F AN CONTAINER FREIGHT STATION AT HALDIA FOR HANDLING IMPORT AND EXPORT CARGO. THE APPROVAL IS SUBJECT TO T LE FOLLOWING TERMS AND CONDITIONS: - (A) THE LETTER OF INTENT HOLDER SHALL TAKE ADEQUATE STEPS TO CREATE PROPER INFRASTRUCTURE KEEPING IN VIEW THE I NDICATIVE NORMS GIVEN IN PARTS A& B OF THE GUIDELINES FOR SETTING UP INLAND CONTAINER DEPOTS I CONTAINER FREIGHT STATIONS (ICDS/CFS) WITHIN A PERIOD OF ONE YEAR FROM THE DATE OF ISSUE OF THIS LETTER. (B) NECESSARY BOND AND GUARANTEES, AS REQUIRED, WOULD BE EXECUTED WITH THE CONCERNED COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE. (C) THE APPROVAL WOULD BE SUBJECT TO CANCELLATION IN THE EVENT OF VIOLATION OF THE CUSTOMS AND OTHER LAWS OF THE LAND AND RULES. (D) A QUARTERLY PROGRESS REPORT OF THE IMPLEMENTATIO N SHALL BE SENT TO THE MINISTRY OF COMMERCE. (E) THE WORKING OF THE CFS WILL BE OPEN TO REVIEW BY THE INTER MINISTERIAL COMMITTEE. (F) FORMALITIES IN RESPECT OF ACQUISITION/POSSESSION OF THE LAND SHALL BE COMPLETED WITHIN 60 DAYS AND INTIMATED TO THE MLO COMMERCE, FAILING WHICH THE APPROVAL GRANTED WOULD BE AUTOMATICALLY CANCELLED. 2. THE FACILITY TO BE SET UP SHALL BE FULL COMPUTERIZED, WITH EDI COMPATIBILITY AND A MINIMUM COMPLEMENT OF EQUIPMENT AND ACCESSORIES AS NECESSARY SHALL BE MADE AVAILABLE AT T HE FACILITY. THE INDICATIVE LIST OF EQUIPMENT/ACCESSORIES CONSIDERED NECESSARY IS ANNEXED. THE STATUS REGARDING CONFIRMATION OF THE INSTALLATION! AVAILABILITY OF THE ITEMS SHALL BE FURNISHED TO THE APPROPRIATE AUTHORITIES TO FACILITATE ISSUE OF REQUISITE N OTIFICATION. 3. PLEASE ACKNOWLEDGE RECEIPT OF THIS LETTER. YOURS FAITHFULLY, SD/ - (N.G. BISWAS) DIRECTOR' A PERUSAL OF CLAUSE 'B' OF THE ABOVE LETTER SHOWS THAT THE ASSESSEE WAS REQUIRED TO EXECUTE NECESSARY BOND AND GUARANTEES WITH THE CONCERNED COMMISSIONER OF CUSTOMS AN CENTRAL EXCISE. IT WAS ONLY ON THE COMPLIANCE OF ALL THE TERMS AND CONDITIONS MENTIONED IN THE AFORESAID LETTER THAT THE ASSESSEE WAS ALLOWED TO CARRY ON THE SERVICES OF CFS. THE ASSESSEE ON THE COMPLIANCE OF THE TERMS AND CONDITIONS AS MENTIONED IN THE LETTER, WAS NOTIFIED AS CFS COMPLEX FOR THE PURPOSE OF RECEIVING, 14 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM STORING, IMPORT CONTAIN ERS, RECEIVING/CONSOLIDATING EXPORT CARGO ETC. VIDE PUBLIC NOTICE OUO - 1L - 2013. THE PUBLIC NOTICES WERE ISSUED BY THE OFFICE OF THE COMMISSIONER OF CUSTOMS (PORT) KOLKATA. 8. THUS, IT IS EVIDENT THAT THE PROPOSAL OF THE ASSESSEE WAS ACCEPTED BY THE GOVERNM ENT ON CERTAIN CONDITIONS WHICH WERE DULY COMPLIED WITH BY THE ASSESSEE. THERE MAY NOT BE ANY SPECIFIC AGREEMENT, BUT THE SEQUENCES OF EVENTS CLEARLY SHOW THAT THE ASSESSEE IS PROVIDING CFS FACILITY IN ACCORDANCE WITH THE CONDITIONS LAID DOWN BY THE GOVERN MENT. IN SUCH CIRCUMSTANCES THERE IS NO NEED TO INSIST FOR THE SPECIFIC EXECUTION OF AGREEMENTS. THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF UNITED LINER AGENCIES OF INDIA (P.) LTD (SUPRA), HAS TAKEN A SIMILAR VIEW, WHERE NO SPECIFIC AGREEMENT WITH THE STATE GOVERNMENT WAS ENTERED INTO BUT FROM THE APPROVALS GRANTED TO THE ASSESSEE IT WAS INFERRED THAT ASSESSEE SHOULD BE DEEMED TO HAVE ENTERED INTO AN AGREEMENT WITH THE STATE GOVERNMENT. THUS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS COMP LIED WITH ALL THE PROVISIONS OF SECTION 80IA(4)(I) AND IS ELIGIBLE TO CLAIM DEDUCTION UNDER THE SAID SECTION. THE IMPUGNED ORDER IS SET ASIDE. THE APPEAL OF THE ASSESSEE IS ALLOWED. 11. RESPECTFULLY FOLLOWING THE COORDINATE BENCH ORDER, WE HOLD THAT THE CONTENTION OF THE AO THAT THERE IS NO AGREEMENT AND HENCE THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION IS NOT THE CORRECT POSITION OF LAW. 12. THE HONBLE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION LTD. (SUPRA) HELD AS FOLLOWS: THE TERM INFRAS TRUCTURE FACILITY WAS DEFINED IN SECTION 80 - IA(12)(CA) OF THE INCOME TAX ACT, 1961, TO MEAN A ROAD, HIGHWAY, BRIDGE, AIRPORT, PORT OR RAIL SYSTEM OR ANY OTHER PUBLIC FACILITY OF A SIMILAR NATURE AS MAY BE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES. THE FINANCE (NO. 2), 1998, INCLUDED THE WORDS INLAND WATER WAYS AND INLAND PORTS IN THE DEFINITION OF INFRASTRUCTURE FACILITY IN SUB - SECTION (12), CLAUSE (CA), WITH EFFECT FROM APRIL 1, 1999. WHEN THE ENTIRE SECTION WAS RECAST AND EVEN AFTER SEVERAL AMEND MENTS WERE THEREAFTER MADE TO THE SECTION, INLAND PORTS CONTINUED TO ENJOY THE DEDUCTION AS INFRASTRUCTURE FACILITY. THERE IS NO DEFINITION OF THE WORDS INLAND PORTS IN ANY OF THE DICTIONARIES. BUT THE WORDS INLAND CONTAINER DEPOT WERE INTRODUCED IN S EC. 2(12) OF THE CUSTOMS ACT, 1962, WHICH DEFINES CUSTOMS PORT. THIS WAS BY WAY OF AN AMENDMENT MADE BY THE FINANCE ACT, 1983, WITH EFFECT FROM MAY 13, 1983. SIMULTANEOUSLY, CLAUSE (AA) WAS INSERTED IN SEC. 7(1) OF THE ACT UNDER WHICH THE CCHI ISSUE NOTI FICATION APPOINTING THE PLACES WHICH ALONE SHALL BE CONSIDERED AS INLAND CONTAINER DEPOTS FOR THE UNLOADING OF IMPORTED GOODS AND LOADING OF EXPORTED GOODS. THE CENTRAL BOARD OF EXCISE AND CUSTOMS ISSUED A CLARIFICATION THAT INLAND CONTAINER DEPOTS WERE IN LAND PORTS. THE POWER TO NOTIFY INFRASTRUCTURE FACILITIES FOR THE PURPOSE OF THE SECTION WAS TAKEN AWAY FROM THE CENTRAL BOARD OF DIRECT TAXES W.E.F. APRIL 1,2002. HOWEVER, THERE WAS NO PROVISION MADE IN THE ACT SAYING THAT NOTIFICATIONS ISSUED EARLIER WOU LD CEASE TO HAVE FROM APRIL 1, 2002.THE ASSESSEE, A PUBLIC SECTOR 15 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM UNDERTAKING, WAS ENGAGED IN THE BUSINESS OF HANDLING AND TRANSPORTATION OF CONTAINERISED CARGO. THE ACTIVITY OF THE ASSESSEE WAS CARRIED OUT MAINLY ON ITS INLAND CONTAINER DEPORTS, CENTRAL F REIGHT STATIONS SEE HAD A TOTAL OF 45 INLAND CONTAINER DEPOTS. IT CLAIMED SPECIAL DEDUCTION UNDER SECTION 80 - IA(4) FOR THE ASSESSMENT YEARS 2003 - 04 TO 2005 - 06. THE ASSESSING OFFICER DENIED SPECIAL DEDUCTION BUT THE TRIBUNAL ALLOWED IT. ON APPEAL TO THE HIGH COURT: HELD, ALLOWING THE APPEALS, THAT OUT OF THE TOTAL 45 INLAND CONTAINER DEPOTS OPERATED BY THE ASSESSEE, EXCEPT TWO ALL OTHERS WERE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES FOR THE PURPOSE OF SEC. 80IA(12)(CA). HAVING REGARD TO THE PROVISION S OF THE CUSTOMS ACT, THE COMMUNICATION ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS AS WELL AS THE MINISTRY OF COMMERCE AND INDUSTRY, THE OBJECT OF INCLUDING INLAND PORT AS AN INFRASTRUCTURE FACILITY AND ALSO THAT CUSTOMS CLEARANCE ALSO TAKES PLACE IN THE INLAND CONTAINER DEPOT, THE ASSESSEES CLAIM THAT THE INLAND CONTAINER DEPOTS WERE INLAND PORTS UNDER EXPLANATION (D) TO SEC. 80IA(4) REQUIRED TO BE UPHELD. 13. THE ISSUE HAS ALSO BEEN CLARIFIED BY THE GOVERNMENT VIDE CBEC CIRCULAR NO. 18/2009 DA TED 08/06/2009. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE ALLOW THIS APPEAL OF THE ASSESSEE. ALL THE MATERIAL FACTS IN THE ABOVE CASE AND THAT OF THE APPELLANT ARE IDENTICAL. IN VIEW OF COMPLETE PARITY OF FACTS, RESPECTFULLY FOLLOWING THE DECISION O F THE JURISDICTIONAL BENCH, I HOLD THAT THE APPELLANT IS ENTITLED TO DEDUCTION U/S. 80(IA)(4) IN RESPECT OF INCOME FROM OPERATION OF THE CONTAINER FREIGHT STATION. 6.2) FURTHER TO THE ABOVE, THE ISSUE HAS BEEN ALREADY CONSIDERED BY THE INCOME TAX SETTLEME NT COMMISSION, CHENNAI BENCH AND IT WAS HELD THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S 80(IA) IN RESPECT OF THE CFS. THE ASSESSING OFFICER HAS DECLINED TO FOLLOW THIS DECISION SIMPLY ON THE GROUND THAT THE DECISION OF THE SETTLEMENT COMMISSION IS C HALLENGED BY THE REVENUE BEFORE THE HONBLE CHENNAI HIGH COURT. I AM UNABLE TO AGREE WITH THE VIEW TAKEN BY THE ASSESSING OFFICER. THE HONBLE MADRAS HIGH COURT WHILE DELIVERING THE JUDGEMENT IN THE CASE OF VELAYUDA SWAMY SPINNING MILLS (P) LTD. 348 ITR 477 (MAD) HELD THAT PENDENCY OF SLP BEFORE THE HONBLE SUPREME COURT WOULD NOT REVERSE OR ERASE THE DICTUM. TILL SUCH TIME, THE DECISION RENDERED BY THE HONBLE SETTLEMENT COMMISSION WILL HOLD GOOD. 6.3) MORE THAN ANYTHING ELSE, THE HONBLE SUPREME COURT I N THEIR ORDER DT.24.4.2018 IN THE CASE OF CONTAINER CORPORATION OF INDIA LIMITED (SUPRA) APPROVED THE VIEW TAKEN BY THE HONBLE DELHI HIGH COURT. WHILE DEALING WITH THE ISSUE, THE HONBLE SUPREME COURT HAS EXAMINED THE FINANCE ACT, 1995 & 1998 AND ALSO TH E NOTIFICATION ISSUED BY THE CBDT IN NO.744(E), DATED 01.09.1998 HAS COME TO THE CONCLUSION THAT ICD AS WELL AS CFS IS AN INFRASTRUCTURE FACILITY AND THEY CAN BE CATEGORIZED AS INLAND PORT. THE HONBLE SUPREME COURT AGREED WITH THE VIEW EXPRESSED BY THE HO NBLE DELHI HIGH COURT IN THE SAME CASE REPORTED IN 346 ITR 140 (DEL.). THE JURISDICTIONAL BENCH OF ITAT (VIZAG) FOLLOWED THIS HIGH COURT ORDER WHILE RENDERING THEIR 16 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM DECISION. THUS, THE ISSUE STANDS SETTLED IN VIEW OF THE DECISION OF THE HONBLE SUPREME CO URT. 6.5) IN THE LIGHT OF THE ABOVE DISCUSSION, THE ASSESSING OFFICER IS DIRECTED TO DELETE T HE ADDITION OF RS.3,68,28,209/ - MADE TOWARDS DISALLOWANCE OF DEDUCTION CLAIMED U/S. 80(IA) OF THE ACT. THUS, THE ORDER OF THIS TRIBUNAL IN THE CASE SUPR A ANSWERED BOTH THE OBJECTIONS OF THE ASSESSING OFFICER WITH REGARD TO AGREEMENT WITH THE GOVERNMENT AND THE STATUS OF CFS AS P O RT. 6.3. THE ASSESSEE RELIED ON THE DECISION OF CIT VS. A.L.LOGISTICS (P) LTD. VIDE 374 ITR 0609 OF HONBLE MADRAS HIGH COURT. THE ISSUE RAISED BY THE REVENUE BEFORE THE HONBLE HIGH COURT IS AS UNDER : 5. BEFORE THE TRIBUNAL, THE DEPARTMENT CONTENDED THAT THERE IS NO PROPER AGREEMENT WITH THE CENTRAL OR THE STATE GOVERNMENT AND EVEN IN THE APPROVED PROPOSAL, CERTAIN OTHER REQUIR EMENTS ARE YET TO BE COMPLIED WITH. ON THIS PREMISE, THE DEPARTMENT CONTENDED THAT THE BENEFIT OF SE C T I ON 890IA(4)(I) WOULD NOT ENDURE TO THE BENEFIT OF THE ASSESSEE. THE HONBLE HIGH COURT OF MADRAS HAS ANSWERED THE ISSUE IN FAVOUR OF THE ASSESSEE IN PARA NO.10 WHICH READS AS UNDER : 10. AS HAS BEEN OBSERVED BY THE TRIBUNAL, IN THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD., VS. A CIT REPORTED IN 346 ITR 140 (DEL), CONTAINER FREIGHT STATION IS HELD TO BE FALLING WITHIN THE CUSTOMS AREA ATTACHED TO THE PORT. AS THE WORK RELATING TO CUSTOMS IS PERFORMED AT THESE INLAND CONTAINER DEPOTS/CONTAINER FREIGHT STATIONS, IT WOULD FALL UNDER T HE PROVISION OF SECTION 80IA(4)(I) EXPLANATION (D) OF THE INCOME TAX ACT, THE PLEA OF MR.T.RAVIKUMAR, LEARNED STANDING COUNSEL APPEARING FOR THE REVENUE THAT ANY OTHER PUBLIC FACILITY ON SIMILAR NATURE HAS BEEN OMITTED WITH EFFECT FROM 1.4.2002 WILL NOT MA KE THE CASE ANY DIFFERENT IN VIEW OF THE DECISION OF THE DELHI HIGH COURT (SUPRA) WHICH HOLDS THAT C F S IS PART OF AN INLAND PORT AND THERE IS NO SPECIFIC EXCLUSION OF C F S I N CLAUSE (D) OF EXPLANATION TO SECTION 80IA(4)(I), THEREFORE, ON FACT WHEN IT HAS BEEN FOUND BY THE TRIBUNAL THAT C F S IS AN INFRASTRUCTURE FACILITY, WE FIND NO GOOD REASON TO DIFFER ON FACT. WE RESPECTFULLY AGREE WITH THE DELHI HIGH COURT. 17 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM 6.4. THE LD.DR HEAVILY PLACED RELIANCE ON THE BOARD CIRCULAR NO.178/42/2010 - ITA - 1 DATED 06.01.201 1 . HON'BLE BOMBAY HIGH COURT CONSIDERED THE BOARD CIRCULAR AND DECIDED THE ISSUE IN FAVOUR OF ASSESSEE HOLDING THAT CFS IS A PORT FOR THE PURPOSE OF DEDUCTION U/S 80IA(4) AND ACCORDINGLY DISMISSED THE APPEALS OF THE REVE NUE IN THE CASE OF PR.CIT VS. JWC LOGISTIC PARK (P) LTD. REPORTED IN 404 ITR 0310. HONBLE SUPREME COURT HAS DISMISSED THE SLP FILED BY THE REVENUE AGAINST THE JUDGEMENT OF HONBLE BOMBAY HIGH COURT IN JWC LOGISTIC PARK (P) LTD. WHICH IS REPORTED IN [ 2018 ] 100 TAXMANN.COM 356 (SC). 7. SIMILARLY, THE ASSESSEE RELIED ON THE DECISION OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION (2015) 374 ITR 0645, HONBLE BOMBAY HIGH COURT HAS DISCUSSED THE ISSUE WITH REGARD TO THE AGREEMENT AND D ECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. WE EXTRACT RELEVANT PART OF THE ORDER OF THE HON'BLE BOMBAY HIGH COURT WHICH READS AS UNDER : 47. WE DO NOT FIND THAT ANYTHING OTHER AND FURTHER THAN THIS MATERIAL IS RELIED. HOWEVER, - EVEN THE HIGH COURT OF JUDICATURE AT MADRAS HAS REFERRED IN ITS DIVISION BENCH DECISION TO THE VIEW TAKEN BY THE DELHI HIGH COURT. THE DIVISION BENCH IN PARAGRAPHS 10 AND 12 OF IT JUDGMENT EXTENSIVELY REFERRED TO THE TRIBUNALS CONCLUSIONS; IT ALSO REFERRED TO THE SPECIAL BENCH DECISION OF THE TRIBUNAL. THUS, WHEN THE PROPOSAL TO SET UP A C F S HAS BEEN ACCEPTED BY THE GOVERNMENT, THERE IS NO REQUIREMENT OF EITHER A SPECIFIC AGREEMENT AS CONTENDED BY MR. SURESH KUMAR, NOR CAN IT BE SAID THAT BY VIRTUE OF ANY: CERTIFICATION OF THE JNPT AND ITS SUBSEQUENT WITHDRAWAL THE POSITION UNDERGOES ANY CHANGE. ONCE THE FACILITY IS NOTHING BUT A INFRASTRUCTURE FACILITY SET UP AND WITHIN TH E PRECINCTS OF THE PORT, THEN, CONSIDERING AND EVEN OTHERWISE HAVING CONSIDERED ITS PROXIMITY TO THE SEA PORT AND ITS ACTIVITIES THAT WE HAVE NO DOUBT AND IT CAN BE SAFELY CONCLUDED THAT THE DEDUCTION ADMISSIBLE UNDER SUB - SECTION (4) OF SECTION 80 - IA CAN B E CLAIMED BY BOTH THE ICDS AND CFSS . 18 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM 8. SINCE THE FACTS ARE IDENTICAL AND THE DEPARTMENT COULD NOT PLACE ANY DECISION TO CONTROVERT THE CASE LAWS RELIED UPON BY THE AS SESS EE , RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THIS TRIBUNAL AND THE DECISION OF HONBL E MADRAS HIGH COURT IN CIT VS. AL LOGISTICS (P) LTD. SUPRA AND CIT VS. CONTINENTAL WAREHOUSING CORPORATION OF HONBLE BOMBAY HIGH COURT, WE HOLD THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IA(4). ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD.CIT(A) AND DIS MISS THE APPEALS OF THE REVENUE FOR THE A.YS. 2011 - 12 TO 2014 - 15 . 9. SINCE THE APPEALS OF THE REVENUE ARE DISMISSED, CROSS OBJECTIONS FILED BY THE ASSESSEE BECOMES INFRUCTUOUS, HENCE DISMISSED. 10. IN THE RESULT, APPEALS OF THE REVENUE AND THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. S D/ - SD/ - ( . . ) ( . ) ( D.S. SUNDER SINGH ) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /VISAKHAPATNAM /DATED : 07 .0 6 .2019 L.RAMA, SPS 19 I.T.A. NO .430 - 433/VIZ/2018 AND CO NOS.113 - 116/VIZ/2018 M/S SRAVAN SHIPPING SERVICES PVT. LTD., VISAKHAPATNAM / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - M/S SRAVAN SHIPPING SERVICES PVT. LTD., 4 TH FLOOR, POTLURI CLASSIC, D.NO.47 - 14 - 3, DWARAKANAGAR, VISAKHAPATNAM 2. / THE REVENUE THE ASST.COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE - 2 , VISAKHAPATNAM 3. THE PR. COMMISSIONER OF INCOME TAX ( CENTRAL ), VISAKHAPATNAM 4. THE COMMISSIONER OF TAX (APPEALS) - 3, VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM