DCIT CEN CIR 8(1), MUMBAI V. ALLCARGO LOGISTICS LTD, MUMBAI

ITA 1306/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3085 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 05-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANADI VARMA
• Assessee Lawyers: B V JHAVERI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO. 1306/MUM/2018 (ASSESSMENT YEAR: 2014-15) DCIT, CENTRAL CIRCLE - 8(1) ROOM NO. 656, 6TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 VS. M/S. ALLCARGO LOGISTIC LTD. DIAMOND SQUARE, 5TH FLOOR CST ROAD, KALINA SANTACRUZ (E), MUMBAI 400098 PAN AACCA2894D APPELLANT RESPONDENT APPELLANT BY: SHRI ANADI VARMA RESPONDENT BY: SHRI B.V. JHAVERI DATE OF HEARING: 05.03.2019 DATE OF PRONOUNCEMENT: 06.03.2019 O R D E R PER SHAMIM YAHYA, AM THIS APPEAL FILED BY REVENUE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-50, MUMBAI DATED 28.12.2017 AND IT PERTAINS TO A.Y. 2014-15. 2. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE ITAT IS RIGHT IN HOLDING THAT THE ASSESSEE IS ENTITLED TO DEDUCTION OF RS. 29,71,38,464/- UNDER S ECTION 80-IA OF THE INCOME TAX ACT, 1961 EVEN THOUGH ACTIVITIES UND ERTAKEN BY THE ASSESSEE DO NOT FALL WITHIN CLAUSE (D) OF THE E XPLANATION TO 80-IA(4) DEFINING THE TERM INFRASTRUCTURE FACILITIE S. II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE TRIBUNAL ERRED IN HOLDING THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION OF RS. 29,71,38,464/- U/S. 80 IA(4) WHICH WAS CONTRARY TO THE CIRCULAR OF THE CBDT NO. 10/200 5 AS ALSO CONTRARY TO THE FACT THAT JNPT PORT HAD WITHDRAWN I TS CERTIFICATION OF THE COMPANY ?' ITA NO. 1306/MUM/2018 M/S. ALLCARGO LOGISTIC LTD. 2 3. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSE SSEE BY THE DECISION OF THE ITAT AND HON'BLE BOMBAY HIGH COURT IN ASSESSEE S OWN CASE. 4. PER CONTRA, THE LEARNED D.R. COULD NOT DISPUTE THE PROPOSITION. 5. UPON CAREFUL CONSIDERATION WE NOTE THAT THE CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER : - 9.0 I HAVE GONE THROUGH THE ASST. ORDER AND THE PA PER BOOK AND THE WRITTEN SUBMISSION OF THE APPELLANT. 9.1 IT HAS BEEN NOTED THAT THE A.O. HAS NOT AT ALL REFERRED TO THE ORDER OF THE SPECIAL BENCH OF THE ITAT AS WELL AS THE JUD GMENT OF THE BOMBAY HIGH COURT IN THE APPELLANT COMPANY'S OWN CA SE FOR THE A.YS. 2004-05 TO 2009-10, WHEREIN THE ISSUE OF DEDU CTION U/S. 80IA(4) OF THE ACT HAS BEEN DISCUSSED AND DECIDED I N FAVOUR OF THE APPELLANT. THE HON'BLE HIGH COURT AT BOMBAY IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION (NHAVASEVA) LIM ITED AND ALLCARGO GLOBAL LOGISTICS LIMITED (374 ITR 645) HAS CLEARLY HELD AS UNDER:- 'HOWEVER, AFTER CONSIDERING THESE CONTENTIONS, WHAT THE SPECIAL BENCH OBSERVES IS THAT THE DELHI HIGH COURT'S VIEW IN THE CASE OF CONTAINER CORPN. OF INDIA LTD. (SUPRA) WOULD ENABLE IT TO CONCLUDE THAT ICD MAY NOT BE A PORT BUT IT IS AN INLAND PORT. THE CASE OF CONTAINER FREIGHT STATION (CFS) IS SIMILARLY SITUATED IN THE SENSE THAT BOTH CARRY OUT SIMILAR FUNCTIONS VIZ. WAREHOUSING, CUSTOMS CLE ARANCE AND TRANSPORT OF GOODS FROM ITS LOCATION TO THE SEA-POR TS AND VICE VERSA BY RAIL OR BY TRUCKS IN CONTAINERS. THE ISSUE IS NO LO NGER RES INTEGRA.' (PAGE 373 & 374) 'WE HAVE FOUND THAT THERE IS A SPECIFIC REFERENCE M ADE BY THE DELHI HIGH COURT TO THE COMMUNICATION DATED 24TH APRIL, 2 007, FROM THE GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMEN T OF REVENUE. THESE ARE THEN CLASSIFIED AS INLAND PORTS AND ACCOR DINGLY. THERE IS A FURTHER COMMUNICATION FROM THE MINISTRY OF COMMERCE AND INDUSTRY AS WELL. WE DO NOT FIND THAT A VIEW DIFFERENT THAN THE ONE TAKEN BY THE DELHI HIGH COURT IS POSSIBLE. BEARING IN MIND THE F ACILITIES THAT ARE EXTENDED AND FOR PURPOSES OF LOADING, UNLOADING, ST ORAGE AND WAREHOUSING OF THE GOODS THAT THE FACILITY IS A INF RASTRUCTURE FACILITY. THAT IT HAS EASY ACCESSIBILITY TO THE PORT AND PART ICULARLY THE SEA-PORT GIVES IT CERTAIN ADVANTAGES AND BENEFITS AND WHICH CLEARLY ACCRUE TO {HOSE USING THE PORT FOR IMPORT AND EXPORT OF CARGO . FURTHER, THE LOCATION THEREOF IS ALSO A RELEVANT FACTOR AS NOTED . IN SUCH CIRCUMSTANCES, THE RELIANCE BY THE SPECIAL BENCH AN D EQUALLY BY THE BENCH OF THE TRIBUNAL IN THE IMPUGNED ORDERS ON THE DIVISION BENCH JUDGMENT OF THE DELHI HIGH COURT IS THUS WELL PLACE D. ITA NO. 1306/MUM/2018 M/S. ALLCARGO LOGISTIC LTD. 3 'WE DO NOT FIND THAT ANYTHING OTHER AND FURTHER THA N 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 ITS JUDGMENT EXTENSIVELY REFERRED TO THE TRIBUNAL'S CON CLUSIONS. IT ALSO REFERRED TO THE SPECIAL BENCH DECISION OF THE TRIBU NAL. THUS, WHEN THE PROPOSAL TO SET UP A CFS HAS BEEN ACCEPTED BY THE G OVERNMENT, 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 INFRASTR UCTURAL FACILITY SET UP AND WITHIN THE PRECINCTS OF THE PORT, THEN, CONSIDE RING AND EVEN OTHERWISE HAVING CONSIDERED ITS PROXIMITY TO THE SE A PORT AND ITS ACTIVITIES THAT WE HAVE NO DOUBT AND IT CAN BE SAFE LY CONCLUDED THAT THE DEDUCTION ADMISSIBLE UNDER SUB-SECTION (4) OF S ECTION 80-IA CAN BE CLAIMED BY BOTH THE ICDS AND CFSS. 'WE DO NOT THINK THAT THE VIEW TAKEN BY THE TRIBUNA L IS IN ANY WAY PERVERSE OR RUNS CONTRARY TO THE LANGUAGE OF SUB-SE CTION (4) OF SECTION 80-IA OR THE OBJECT OF THE INCOME TAX ACT, 1961, AS A WHOLE. ONCE SUCH A CONCLUSION IS REACHED, THEN, IT IS NOT NECES SARY TO REFER TO ANY OTHER MATERIAL, PARTICULARLY ANY CIRCULARS OF THE B OARD OR OTHERWISE OR THE CERTIFICATES ISSUED BY THE AUTHORITIES. EVEN TH EIR CONTENTS NEED NOT BE REFERRED TO. WE ARE OF THE VIEW THAT THE EXTENSI VE REASONING IN THE JUDGMENT OF THE DIVISION BENCH OF THE DELHI HIGH CO URT AND WHICH FINDS APPROVAL EVEN OF THE HIGH COURT OF MADRAS AND WITH WHICH WE BROADLY AGREE THAT THE SUBSTANTIAL QUESTIONS OF LAW ON BOTH TO BE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 9.2 IN VIEW OF THE AFORESAID BINDING DECISION OF T HE HON'BLE BOMBAY HIGH COURT IN THE APPELLANT'S OWN CASE ON THE SAME ISSUE, THE ACTION OF THE AO IN DISALLOWING DEDUCTION U/S.80IA(4) OF T HE ACT IS NOT JUSTIFIED. FOLLOWING THE DECISION OF THE HON'BLE BO MBAY HIGH COURT, REFERRED SUPRA, THE DISALLOWANCE OF DEDUCTION U/S. 80IA(4) OF THE ACT AMOUNTING TO RS. 29,71,38,464/- IS DELETED. 6. THUS, WE NOTE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. HENCE WE UPHOLD THE ORDER OF THE CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MARCH, 2019. SD / - SD/ - (RAM LAL NEGI) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 6 TH MARCH, 2019 ITA NO. 1306/MUM/2018 M/S. ALLCARGO LOGISTIC LTD. 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -50, MUMBAI 4. THE PR.CIT - 4, MUMBAI 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.