DCIT, Nizamabad V. M/s Sarang Hitech Cold Storage (P) ltd., Nizamabad

ITA 1045/HYD/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7121 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 26-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: S RAMA RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBE R. ITA NO.1045/HYD/2010 : ASSESSMENT YEAR 2005-06 DY. COMMISSIONER OF INCOME - TAX , CIRCLE-1, NIZAMABAD V/S M/S. SARANG HITECH COLD STORAGE (P)LTD., NIZAMABAD. (PAN - AAVFS 0168 A ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.V. PRASAD REDDY RESPONDENT BY : SHRI S. RAMA RAO DATE OF HEARING 17 11 .2011 DATE OF PRONOUNCEMENT 22.11.2011 O R D E R PER ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A) VI HYDERABAD DATED 15.6.2010 FOR THE AS SESSMENT YEAR 2005-06. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO T HE CLAIM OF THE ASSESSEE FOR RELIEF UNDER S.80IB(11) OF THE ACT, WHICH HAS BEEN ALLOWED BY THE CIT(A). 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE CO MPANY IS ENGAGED IN THE BUSINESS OF PROVIDING COLD CHAIN FACILITY FOR THE AGRICULTURAL PRODUCE. IT FILED THE RETURN OF INCOM E ON 26.10.2005. ADMITTING AN INCOME OF NIL INCOME AFTER CLAIMING DEDUCTION UNDER S.80IB OF RS.35,57,768. THOUGH THE RETURN OF INCOME WAS INITIALLY PROCESSED UNDER S.143(1) OF THE ACT ON 30.12.2005, THEREAFTER THE ITA NO.1045/HYD/2010 M/S. SARANG HITECH COLD STORAGE (P)LTD., NIZAMABAD . 2 ASSESSING OFFICER ISSUED NOTICE UNDER S.148 DATED 2 .5.2008, ON THE GROUND THAT THE ASSESSEE DID NOT PROVIDE COLD CHAIN FACILITY ENABLING IT TO CLAIM DEDUCTION UNDER S.80IB(11) OF THE ACT. 4. IN THE RE-ASSESSMENT PROCEEDINGS THAT FOLLOWED, TH E ASSESSING OFFICER WAS OF THE VIEW THAT THE COLD CHA IN FACILITY CONSISTS OF A SERIES OF FACILITIES AND SUCH FACILITIES MUST FOR M A SEQUENCE RIGHT FROM THE HARVESTING OF THE AGRICULTURAL CROP TO THE TIME OF DISTRIBUTION THROUGH RETAIL OUTLETS; AND THAT THE POPULAR MEANIN G OF COLD CHAIN IN A TRADE AND SCIENTIFIC WORLD IS THAT A SERIES OF FACI LITIES FOR MAINTAINING IDEAL COLD STORAGE SYSTEMS FOR PERISHABLES FROM THE POINT OF ORIGIN TO THE POINT OF CONSUMPTION; AND THE COLD CHAIN LOGIST IC INFRASTRUCTURE GENERALLY SHALL CONSIST OF PRE-COOLING FACILITY, CO LD STORAGE, REFRIGERATED CARRIERS, PACKING, WAREHOUSING AND INFORMATION MANA GEMENT SYSTEM. THE ASSESSING OFFICER RELIED ON THE STATEMENTS RECO RDED FORM ONE SHRI P.UPENDER RAO, MANAGING DIRECTOR, COLD CARE SERVICE S PVT. LTD. AND SHRI MURLIDHAR GUPTA, MANAGING DIRECTOR OF VINEET C OLD STORAGE PVT. LTD., WHO MENTIONED THAT THE COLD CHAIN FACILITY C ONSISTED OF STORAGE AND TRANSPORTATION. HE ALSO NOTED THAT SHRI P.UPE NDER RAO STATED THAT THE ASSESSEE COMPANY DOES NOT POSSESS ANY OTHER FAC ILITY EXCEPT COLD STORAGE. ACCORDINGLY, THE ASSESSING OFFICER ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN AS TO WHY THE CLAIM FOR DEDUCTION/S. 80IB(11) OF THE ACT SHOULD NOT BE DISALLOWED. 5. IN THE EXPLANATION FILED IN RESPONSE THERETO, THE A SSESSEE CONTENDED THAT THE DEFINITION OF THE COLD CHAIN FAC ILITY IS PROVIDED IN S.80IB(14)(AA) WHICH CLEARLY MENTION THAT A CHAIN O F FACILITIES FOR STORAGE OR TRANSPORTATION OF AGRICULTURAL PRODUCE; THE DEFINI TION GIVEN TO THE WORDS BY ANY OTHER PERSON OR A CORPORATE BOD Y OR OTHER ORGANIZATIONS ARE NOT RELEVANT FOR THE PURPOSE WHE N THE INCOME-TAX ACT ITSELF DEFINED THE WORD FOR PURPOSE OF S.80IB(1 1) OF THE ACT. IT WAS ITA NO.1045/HYD/2010 M/S. SARANG HITECH COLD STORAGE (P)LTD., NIZAMABAD . 3 ALSO EXPLAINED THAT THE ASSESSEE HAD FACILITIES LIK E PRE-COOLING, FACILITY FOR FUMIGATION OF THE STOCKS, DRYING OF THE GOODS O N THE PLATFORMS, GRADING OF THE COMMODITIES; WHILE HANDLING OVER THE STOCKS TO BRING THEM TO THE NORMAL TEMPERATURE ETC. AND THE STATEME NT OF SHRI P. UPENDER RAO IS FACTUALLY NOT CORRECT AND NOT RELIAB LE. RELIANCE WAS PLACED ON THE DECISION OF THE AGRA BENCH OF THE TRI BUNAL IN THE CASE OF ITO V/S. AMBIKA SHEET GRAH(P)LTD.(314 ITR 123), WHE REIN IT WAS HELD THAT THE DEFINITION OF A WORD PROVIDED BY ANY AUTHO RITY OR CORPORATE BODY IS NOT RELEVANT, WHEN THERE IS A SPECIFIC DEFI NITION UNDER THE ACT AS PER S.80IB(14)(AA); AND ALSO THAT IN A TAXING ST ATUE ONE HAS TO LOOK MERELY AT WHAT IS CLEARLY STATED BY THE SAID ACT AN D NOT WHAT IS STATED BY OTHERS. 6. NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND HOLDING THAT THE ASSESSEE DOES NOT HAVE ANY FACILIT Y OTHER THAN AS A COLD STORAGE; AND THAT SUCH COLD STORAGE CANNOT BE TERMED AS COLD CHAIN FACILITY WITHIN THE MEANING OF S.80IB(11) OF THE ACT, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSE E FOR DEDUCTION UNDER S.80IB(11) OF THE ACT, AND COMPLETED THE RE-ASSESSM ENT ON A TOTAL INCOME OF RS.35,57,768, VIDE ORDER OF ASSESSMENT D ATED 31.12.2009 PASSED UNDER S.143(3) READ WITH S.148 OF THE ACT. 7. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE T HE CIT(A). THE CIT(A), FOLLOWING THE DECISION OF THE AGRA BEN CH DECISION OF THE TRIBUNAL IN THE CASE OF ITO V/S. AMBIKA SHEET GRAH (P) LTD. (SUPRA), THE VIEW TAKEN IN WHICH, ACCORDING TO HIM, WAS REAF FIRMED BY THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE ITO JAIPUR V/S. MEFCO ENTERPRISES P. LTD. (ITA NO.1434/JP/2008) AND BY TH E AGRA BENCH OF THE TRIBUNAL IN THE CASE OF PALIWAL ICE & COLD STOR E V/S. ITO (ITA ITA NO.1045/HYD/2010 M/S. SARANG HITECH COLD STORAGE (P)LTD., NIZAMABAD . 4 NO.231/AGR/2007), HELD THAT THE ASSESSEE WHO IS MAI NTAINING THE COLD CHAIN STORAGE FACILITY IS ENTITLED FOR DEDUCTION UN DER S.80IB OF THE ACT. 8. AGGRIEVED BY THE ORDER OF THE CIT(A), REVEN UE IS IN APPEAL BEFORE US. 9. WE HEARD BOTH THE PARTIES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. WE FIND THAT THE ISSUE INVOLV ED IN THIS APPEAL, AS TO WHETHER THE ASSESSEE, MAINTAINING COLD CHAIN STO RAGE FACILITY, IS ELIGIBLE FOR DEDUCTION UNDER S.80IB OF THE ACT, IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE AGRA BENCH OF THE TRIBUNAL IN THE CASE OF PALIWAL ICE & COLD STORE V/S. ITO(ITA LNO.2 31/AGR/2007 DATED 24.10.2008), A COPY OF WHICH HAS ALSO BEEN FILED BE FORE US. IT HAS ALSO BEEN BROUGHT TO OUR NOTICE THAT THE SAID DECISION O F THE AGRA BENCH OF THE TRIBUNAL HAS ALSO BEEN AFFIRMED BY THE HONBLE ALLAHABAD HIGH COURT, VIDE ITS ORDER DATED 3.11.2011 IN INCOME TAX APPEAL NO.288 OF 2009. IN THIS VIEW OF THE MATTER AND IN THE ABSENC E OF ANY DECISION TO THE CONTRARY BROUGHT TO OUR NOTICE, WE FIND NO INFI RMITY IN THE ORDER OF THE CIT(A). WE ACCORDINGLY UPHOLD THE SAME REJECTI NG THE GROUNDS OF THE REVENUE IN THIS APPEAL. 10. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 22.11.2011 SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DT/- 22ND NOVEMBER, 2011 COPY FORWARDED TO: 1. M/S. SARANG HITECH COLD STORAGE (P)LTD., 5-6-57 0/7, HYDERABAD ROAD, NIZAMABAD. ITA NO.1045/HYD/2010 M/S. SARANG HITECH COLD STORAGE (P)LTD., NIZAMABAD . 5 2. DY. COMMISSIONER OF INCOME - TAX CIRCLE 1, NIZAMABAD. 3. COMMISSIONER OF INCOME - TAX(A) - V I HYDERABAD 4. COMMISSIONER OF INCOME-TAX V, HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S.