DCIT, CIRCLE-3(1), Hyderabad V. M/s Sealion Sparkle Maritime Service Ltd., Hyderabad

ITA 1259/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66101 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-06-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 04-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K GNANAPRAKASH
• Assessee Lawyers: A V RAGHURAM
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS.1259 &1260/HYD/2011 ASSESSMENT YEARS : 2007-08 & 2008-09 DCIT, CIRCLE-3(1), APPELLANT HYDERABAD. VS. M/S SEALION SPARKLE MARITIME SERVICES LTD. HYDERABAD. R ESPONDENT APPELLANT BY : SHRI K. GNANAPRAKASH RESPONDENT BY : SHRI A.V. RAGHURAM DATE OF HEARING : 07-06-2012 DATE OF PRONOUNCEMENT : 03-08-2012 ORDER PER SAKTIJIT DEY, J.M.: THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTE D AGAINST SEPARATE ORDERS OF CIT(A)-IV, HYDERABAD FOR THE ASS ESSMENT YEARS 2007-08 AND 2009-10. SINCE COMMON ISSUES ARE INVOLVED IN THESE TWO APPEALS, THESE ARE TAKEN UP TOGETHER A ND DISPOSED OF BY THIS COMBINED ORDER FOR THE SAKE OF CONVENIENCE. 2. SINCE FACTS ARE IDENTICAL, FOR THE SAKE OF BREVI TY, WE DEAL WITH THE FACTS AS MENTIONED IN ITA NO. 1259/HYD/200 1 PERTAINING TO THE ASSESSMENT YEAR 2007-08. BRIEFLY THE FACTS A RE THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF O & M OF PORTS AND OPERATING OF SHIPS. THE ASSESSEE FILED ITS RET URN CLAIMING DEDUCTION U/S 80IA OF THE ACT. FOR THE ASSESSMENT YEAR 2007-08, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30-10-2 007 DECLARING AN INCOME OF RS.1,24,31,122/- AFTER CLAIMING DEDUCT ION U/S 80IA 2 ITA NOS. 1259 AND 1260 OF 2011 SEALION SPARKLE MARITIME SERVICE LTD. OF AN AMOUNT OF RS.1,03,53,789/-. IN COURSE OF SCR UTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE EXPLAINED BEFO RE THE AO THAT IT HAS ENTERED INTO A CHARTER PARTY AGREEMENT DATED 1-5- 2003 WITH ENNORE PORT LIMITED FOR RENDERING VARIOUS SERVICES. THE AO ON INTERPRETATION OF DIFFERENT CLAUSES OF AGREEM ENT CAME TO A CONCLUSION THAT THE AGREEMENT IS BASICALLY FOR MAI NTAINING TUGS AND LAUNCHES TO BE PURCHASED BY THE ASSESSEE AND PL ACED AT THE DISPOSAL OF THE CHARTERER I.E., ENNORE PORT LIMITED . THE AO IN THE ASSESSMENT ORDER OBSERVED THAT WHAT IS MAINTAINED BY THE ASSESSEE IS ONLY A SET OF TUGS AND LAUCHES AND APPA RENTLY NOT PORT. THE AO ALSO OBSERVED AS PER THE TERMS AND CONDITIONS OF THE AGREEMENT THE ASSESSEE IS ONLY ELIGIBLE FOR REC EIPT OF RENT AND HIRE INDICATING THE LIMITED ROLE OF THE ASSESSEE. T HE ASSESSING OFFICER REJECTED THE CLAIM OF DEDUCTION OF THE ASS ESSEE U/S 80IA AND COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT. AGGRIEVED AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASS ESSEE WENT IN APPEAL BEFORE THE CIT (A). 3. THE CIT (A) FOLLOWING THE ORDER PASSED BY THE IT AT, HYDERABAD BENCH IN THE ASSESSEES OWN CASE FOR ASS ESSMENT YEAR 2006-07, ALLOWED THE ASSESSEES APPEAL BY OBSERVING THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S 80IA SU BJECT TO THE CONDITION THAT M/S ENNORE PORT HAS NOT AVAILED THE SAME DEDUCTION FOR THE RELEVANT ASSESSMENT YEAR. 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IDENTICAL DISPUTE WAS CONSIDE RED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO.697/HYD/2010. THE ITAT, HYDERABAD BENCH WHILE DISPOSING OF THE APPEAL HAS HELD IN THE FOLLOWING M ANNER:- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND A LSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE IS A JOINT VENTURE COMPANY OF 3 ITA NOS. 1259 AND 1260 OF 2011 SEALION SPARKLE MARITIME SERVICE LTD. M/S. OCEAN SPARKLE LTD. ASSESSEE ENTERED INTO AN AG REEMENT WITH M/S. ENNORE PORT LTD. FOR MAINTENANCE AND OPERATION. AS RIGHTLY SUBMITTED BY THE LEARNED REPRESENTATIVE FOR THE ASSESSEE FOR THE ASS ESSMENT YEAR 2003-04 IN ITA NO. 238/HYD/2007, IN THE CASE OF M/S. OCEAN SPA RKLE LIMITED, AFTER CONSIDERING SIMILAR AGREEMENT WITH M/S. ENNORE PORT LTD., THIS TRIBUNAL, VIDE ITS ORDER DATED 18.7.2008, FOUND THAT THE ASSESSEE HAS COMPLIED WITH ALL THE THREE CONDITIONS PRESCRIBED UNDER S. 80IA(4) OF THE ACT. ONE OF US, THE JUDICIAL MEMBER, WAS A PARTY TO THE ORDER OF THE TR IBUNAL DATED 18.7.2008. THIS TRIBUNAL AFTER EXAMINING THE AGREEMENT ENTERED INTO WITH M/S. ENNNORE PORT LTD. WITH SIMILAR TERMS AND CONDITIONS FOR CAR RYING OUT SIMILAR ACTIVITY FOUND THAT THE ASSESSEE WAS ENTITLED FOR DEDUCTION U/S. 80IA PROVIDED M/S. ENNORE PORT LTD. HAS NOT AVAILED THE SAME DEDUCTIO N UNDER S. 80IA OF THE ACT. IN THE CASE BEFORE US ALSO, INSTEAD OF M/S. O CEAN SPARKLE LIMITED, ASSESSEE, A JOINT VENTURE COMPANY OF M/S. OCEAN SPA RKLE LIMITED ENTERED INTO AGREEMENT WITH SIMILAR TERMS AS IN THE CASE OF M/S. OCEAN SPARKLE LIMITED AND M/S. ENNORE PORT LTD. HAS GIVEN A CERT IFICATE STAYING THAT THE ACTIVITY OF THE ASSESSEE AMOUNTS TO OPERATION AND M AINTENANCE OF ENNORE PORT. IN THE CIRCUMSTANCES, THEREFORE, AS FOUND BY THIS TRIBUNAL IN THE CASE OF M/S. OCEAN SPARKLE LIMITED, THE ASSESSEE HAS COMPLI ED WITH ALL THE THREE CONDITIONS REQUIRED FOR DEDUCTION UNDER S. 80IA(4) OF THE INCOME TAX ACT. THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER S. 80IA, PROVIDED M/S. ENNORE PORT LTD. HAS NOT AVAILED THE SAID RE LIEF FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IN VIEW OF THE ABOVE DIS CUSSION, WE ARE UNABLE TO SUSTAIN THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE, AND DIRECT THE ASSESSING OFFICER TO ALLOW ASSESSEE'S CLAIM FOR DEDUCTION UNDER S. 80IA OF THE ACT, IF M/S. ENNORE PORT LTD. HAS NOT AVAILED THE SAME FOR THE YEAR UNDER CONSIDERATION. IT IS SEEN FROM THE CIT (A)S ORDER THAT HE HAS PAS SED THE ORDER FOLLOWING THE REASONING OF THE ITAT, HYDERABAD BENC H. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT (A). ACCORDINGLY, WE UPHOLD THE SAME AND DISMISS THE GRO UNDS RAISED BY THE REVENUE FOR THE TWO YEARS UNDER CONSIDERATIO N. 4 ITA NOS. 1259 AND 1260 OF 2011 SEALION SPARKLE MARITIME SERVICE LTD. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE STAND DISMISSED. ORDER PRONOUNCED IN THE COURT ON -8-2012. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 3 RD AUGUST, 2012 JMR* COPY TO:- 1) DCIT, CIR-3(1), HYDERABAD. 2) M/S SEALION SPARKLE MARITIME SERVICE LTD., SRINA GAR COLONY, HYDERABAD. 3) THE CIT (A)-IV, HYDERABAD 4) THE CIT-IV, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D.