The Assistant Commissioner of Income Tax, Circle-3(1), Visakhapatnam V. Gateway East India Private Limited, Visakhapatnam

ITA 149/VIZ/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1662 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 01-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SONAWAL
• Keywords: Set aside
• Section: 143(3); 153A; 143(1); 80IA; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 149 / VIZ /201 9 (ASST. YEAR : 20 14 - 15 ) ACIT, CIRCLE - 3(1), VISAKHAPATNAM. V S . M/S. GATEWAY EAST INDIA PVT. LTD., CONTAINER FREIGHT STATION, VPT EXIM PAR K , OPP. GAIL, NEAR AYYAPPA SWAMI TEMPLE, SHEELANAGAR, VISAKHAPATNAM . PAN NO. AABCV 1938 N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MADHUR AGRAWAL ADV. DEPARTMENT BY : SHRI D.K. SONAWAL CIT DR DATE OF HEARING : 19 / 0 8 /201 9 . DATE OF PRONOUNCEMENT : 06 / 0 9 /201 9 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , VISAKHAPATNAM , DATED 24 /0 1 /201 9 FOR THE ASSESSMENT YEAR 2014 - 15 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE ORDER OF THE LD. CIT(A) - 1, VISAKHAPATNAM IS ERRONEOUS IN LAW. 2. THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 801A(4) OF I.T.ACT. 2 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) 3. THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THAT THE DEFINITION OF 'INFRASTRUCTURAL FACILITY' AS DEFINED ULS.801A(4) INCLUDES' A PORT, AIRPORT, INLAND WATER WAY, INLAND PORT OR NAVIGATIONAL CHANNEL IN THE SEA' BUT DOES NOT INCLUDE CONTAINER FREIGHT STATION(CFS). 4. THE LD.C IT(A) OUGHT TO HAVE CONSIDERED THAT EVEN AS PER THE LETTER ISSUED BY THE. VISHAKHAPATNAM PORT TRUST, THE STRUCTURE (CFS) DOES NOT FORM PART OF THE PORT. 5. THE LD.CIT(A) OUGHT TO HAVE SEEN THAT THE BOARD, VIDE CIRCULAR DATED 06 - 01 - 2011, CLARIFIED THAT AN L CD OR A CFS IS USUALLY NOT LOCATED AT THE PORT AND THEREFORE, IS NOT A PART OF THE 'PORT' FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S. 801A(4)(I) OF THE ACT. 6. THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSING OFFICER HAD CATEGORICALLY POINTE D OUT THAT THE CFS IS LOCATED FAR AWAY FROM THE PORT PREMISES, AND THEREFORE, DOES NOT FORM PART OF PORT AS CONTEMPLATED U/S. 801A(4)(I) OF THE ACT. 7. THE LD.CIT(A) ERRED IN ALLOWING THE ASSESSEE'S APPEAL SOLELY RELYING ON A CIRCULAR ISSUED BY CENTRAL BOA RD OF EXCISE & CUSTOMS ISSUED UNDER THE PROVISIONS OF CENTRAL EXCISE & CUSTOMS ACT, WHICH HAS NO RELEVANCE TO THE PROVISIONS OF THE INCOME - TAX ACT, 1961, OR THE RELIEFS SOUGHT BY THE ASSESSEE UNDER THE PROVISIONS OF THE INCOME - TAX ACT. 8. THE APPELLANT CRA VES LEAVE TO ADD OR AMEND OR ALTER OR DELETE ANY GROUND AT THE TIME OF HEARING OF THE APPEAL. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE ADDITION TO THE TOTAL INCOME MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CLAIMED U/SEC. 80IA(4) BE RESTORED. 3 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE OPERATION OF CONTAINER FREIGHT STATION (CFS) , FILED ITS RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS. 1,09,03,800/ - AFTER CLAIMING DEDUCTION U/SEC. 80IA(4) OF RS. 16,30,74,430/ - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/SEC. 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND AFTER 3 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) FOLLOWING DUE PROCEDURE , ASSESSMENT WAS COMPLETED U/SEC. 143(3) OF THE ACT, DATED 05/12/201 6 . THE ASSESSING OFFICER HAS ASKED THE ASSESSEE AS TO HOW ASSESSEE IS ELIGIBLE FOR DEDUCTION U/SEC. 80IA(4) OF THE ACT. THE ASSESSEE HAS SUBMITTED A DETAILED SUBMISSION WHICH WAS REPRODUCED BY THE ASSESSING OFFICER IN HIS ORDER AT PARA NOS. 4 TO 7 . 4 . THE ASSESSING OFFICER AFTER CONSIDERING THE ASSESSEES EXPLANATION NOTED THAT A PERUSAL OF THE CERTIFICATE ISSUED BY THE VISAKHAPATNAM PORT TRUST INDICATES THAT THE STRUCTURE ON WHICH THE ASSESSEE HAS CLAIMED DEDUCTION U/SEC. 80IA(4) DOES NOT FULFIL THE CONDITIONS ENUMERATED IN CIRCULAR NO. 793, DATED 23/06/2000 SUCH AS THE CFS HAS NOT BEEN BUILT UNDER BOT AND BOLT SCHEME AND THERE IS NO AGREEMENT THAT THE SAME WOULD BE TRANSFERRED TO VPT ON EXPIRY OF TIME STIPULATED IN THE AGREEMENT AS MENTIONED IN CIRCULAR NO.793, DATED 23/06/2000 OR CIRCULAR N O .10/2005 , DATED 16/12/2005 . IT CAN BE SEEN FROM THE ABOVE THAT THE CONDITIONS ENUMERATED VIDE CIRCULAR NO.793, DATED 23/06/2000 FOR SUCH STRUCTURES TO BE INCLUDED IN THE DEFINITION OF PORT IS NOT FULFILLED BY THE ASSESSEE - COMPANY . COMING TO CIRCULAR NO.10/2005 , THE CONDITIONS LAID DOWN FOR SUCH STRUCTURE TO BE ELIGIBLE FOR DEDUCTION IS THAT THE C ONCERNED PORT AUTHORITY HAS ISSUED A CERTIFICATE, THAT THE SAID STRUCTURES FORM PART OF THE PORT . IN SUPPORT OF THE ABOVE, 4 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) THE ASSESSEE SUBMITTED A CERTIFICATE FROM THE VISAKHAPATNAM PORT TRUST WHICH MENTIONS THAT THE CFS M/S. GATE EAST INDIA PVT. LTD. M A Y BE CONSIDERED AS EXTENDED ARM OF THE PORT IN ACCORDANCE WITH CBDT CIRCULAR NO. 793, DATED 23/06/2000 READ WITH CLARIFICATION DATED 24/04/2007 ISSUED BY THE CENTRAL BOARD OF CUSTOMS AND EXCISE, NEW DELHI. 5. ON PERUSAL OF THE SAID CERTIFICATE ISSUED BY THE VISAKHAPATNAM PORT TRUST , IT CAN BE SEEN THAT THE STRUCTURE DOES NOT FORM PART OF THE PORT INASMUCH AS IT IS NOT LOCATED IN THE PORT. THERE IS NO AMBIGUITY IN CIRCULAR NO.10/2005 WHEREIN IT IS CLARIFIED THAT THE STRUCTURE MUST BE A PART OF THE PORT. THE LITERAL MEANING OF PART OF THE PORT IS THAT IT IS WITHIN THE PRECINCTS OR PREMISES OF THE PORT . THIS ASPECT WILL BE CLARIFIED UNDER SUBSEQUENT PARAGRAPHS AFTER TAKING INTO CONSIDERATION A CLARIFICATION ISSUED BY THE BOARD ON DEFINITION OF INLAND PORTS FOR CFS AND ICDS . AT THIS JUNCTURE , IT IS IMPORTANT TO TAKE A LOOK AT THE CERTIFICATE ISSUED BY THE VISAKHAPATNAM PORT TRUST STATING THAT THE STRUCTURE IS AN EXTENDED ARM OF THE PORT . THIS DEFINITION CLEARLY REVEALS THE FACT THAT THE INFRASTRUCTURE FACILITY OF THE ASSESSEE IS NOT LOCATED IN THE PORT BUT AN EXTENDED ARM OF THE PORT I.E. IN THE PREMISES AWAY FROM THE PORT . SINCE IT IS AN EXTENDED ARM WHICH MEANS AWAY 5 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) FROM THE PORT IT IS CLEAR THAT IT IS NOT A PART OF THE PORT AS ENJOINED IN THE CIRCUL AR. 6 . THE ASSESSING OFFICER FURTHER OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE LD.AR RELIED ON THE DECISION OF THE HON'BLE ITAT SPECIAL BENCH, MUMBAI AND THE SAID CASE LAW HAS BEEN CAREFULLY PERUSED. THE DECISION OF THE HON'BLE ITAT SPECIAL BENCH, MUMBAI IN THE CASE OF M/S. ALL CARGO GLOBAL LOGISTICS LTD., VS. DCIT FOR THE A.YS. 2004 - 05 TO 2009 - 10 INVOLVED GROUNDS REGARDIN G INTERPRETATION OF SECTION 153A AND DEDUCTION U/SEC. 80IA(4) OF THE ACT AND ARE DISTINGUISHABLE ON SALIENT FEATUR ES AND FACTS OF THE CASE. THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF THE HON'BLE ITAT SPECIAL BENCH, MUMBAI ON THE ABOVE ISSUE AND HAS PREFERRED AN APPEAL BEFORE THE HON'BLE HIGH COURT , MUMBAI . THE ASSESSEE HAS ALSO RELIED ON ANOTHER RECENT DECISION OF THE ITAT, VISAKHAPATNAM BENCH IN ASSESSEES OWN CASE IN ITA NO.15/VIZ/2015, DATED 29/04/2015 FOR THE A.Y. 2011 - 12 IN WHICH THE HON'BLE TRIBUNAL HAS ALLOWED THE ASSESSEES APPEAL REGARDING DEDUCTION U/SEC. 80IA(4) OF THE ACT. HOWEVER, EVEN ON THIS ISSUE, THE REVENUE HAS PREFERRED APPEAL BEFORE THE HON'BLE HIGH COURT OF ANDHRA PRADESH. 7 . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER FURTHER OBSERVED THAT T HE SOLE CONTROVERSY IN THE INSTANT CASE IS WHETHER 6 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) CONTAINER FREIGHT STATIONS (CFS) OPERATED BY THE ASSESSEE FOR SHIPPING COMPANIES DURING THE SUBJECT YEAR IS 'INFRASTRUCTURE FACILITY' AND WHETHER THE INCOME DERIVED FROM CFS IS ELIGIBLE FOR DEDUCTION U/S 8 0IA(4)(I). UNDER SEC. 80I A(4)(I) O F THE I . T . ACT, A DEDUCTION IS ADMISSIBLE IN RESPECT OF THE INCOME OF AN UNDERTAKING ENGAGED IN SETTING UP AN INFRASTRUCTURE FACILITY. THE EXPRESSION 'INFRASTRUCTURE FACILITY' HAS BEEN DEFINED IN SEC. 801A(4), WHICH INCLUDES 'A PORT, AIRPORT, INLAND WATER WAY, INLAN D PORT OR NAVIGATIONAL CHANNEL IN THE SEA'. ON THIS SUBJECT, CBDT ISSUED A CIRCULAR DATED 06.01.2011, IN WHICH EARLIER CIRCULARS DATED 16.12.2005 AND 23.6.2000 WERE CONSIDERED. THE CLARIFICATION PROVIDED IN BOARD'S CIRCULAR IS A USEFUL AID FOR INTERPRETATI ON OF THE PROVISIONS OF SECTION 80I A(4)(I) AND TO DECIDE WHETHER CFS IS AN 'INFRASTRUCTURE FACILITY ' WITHIN THE MEANING OF SEC. 80I A(4)(I). IT HAS BEEN CLARIFIED IN THE SAID CIRCULAR DATED 06.01.2011 THAT AN I CD OR A CFS IS USUALLY NOT LOCATED AT THE PORT AND THEREFORE IS A NOT A PART OF THE 'P ORT' FOR THE PURPOSE OF SEC. 80I A(4)(I). IT HAS BEEN FURTHER CLARIFIED THAT AS ICDS AND CFSS ARE NOT PORTS LOCATED ON ANY INLAND WATER WAY, RIVER OR CANAL THEY CANNOT BE CLASSIFIED AS 'INLAND PORTS' FOR THE PURPOSE OF SECTION 80(1A)(4). IN THE CASE OF THE PRESENT ASSESSEE, THE FACT IS THAT THE CFS IS LOCATED AWAY FROM THE PORT PREMISES AND THEREFORE AS PER THE CLARIFICATION ISSUED BY 7 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) THE BOARD, IT DOES NOT FORM PART OF THE 'PORT' OR 'INLAND PORT' AS CONTEMPLATED IN SEC . 80 I A(4). IN THE AUTHORITIES REFERRED BY THE ITAT WHILE GRANTING RELIEF TO THE ASSESSEE, THE CLARIFICATION ISSUED BY THE CBDT WAS NOT CONSIDERED IN PROPER PERSPECTIVE AND THE DECISION WAS RENDERED BY THE HON'BLE ITAT BY SIMPLY RELYING ON THE DEFINITION OF I CD AND CFS EXPLAINED IN CIRCULARS ISSUED UNDER OTHER ENACTMENTS. THE DECISION OF THE HON'BLE ITAT CANNOT BE ACCEPTED WHEN THE BOARD HAS CLARIFIED THE MATTER IN NO UNCERTAIN TERMS AS TO THE MEANING OF 'PORT' AND INLAND PORT FOR THE PURPOSE OF DEDUCTION U/ S 80I A(4)(I). WHILE ALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 801A(4), THE ITAT HAS RELIED ON CIRCULAR NO. 18/2009 , DATED 08.06.2009 ISSUED BY CENTRAL BOARD OF EXCISE AND CUSTOMS WHEREIN THE DISTINCTION BETWEEN INLAND C ONTAINER D EPOTS (ICDS) AND CONTAINER FREIGHT STATIONS (CFS) WAS STATED TO HAVE BEEN SPELT OUT. HOWEVER, IT IS TO BE MENTIONED THAT THE DESCRIPTION OF ACTIVITY OF THE ASSESS E E UNDER CENTRAL EXCISE ACT OR SALES TAX ACT OR ANY OTHER ENACTMENT BY ITSELF CANNOT BE TAKEN AS CONCLUSIVE OF WHAT THE EXPRESSION 'INFRASTRUCTURE FACILITY' DENOTES UNDER THE IT ACT. IN THIS REGARD, REFERENCE CAN BE MADE TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VENKATESHWARA HATCHERIES LTD., (237 ITR 174), WHEREIN THE APEX COURT HELD AS UNDER : - 8 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) '16. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON SEVERAL DECISIONS UNDER THE SALES TAX ACTS, CENTRAL EXCISE ACT AND THE PROVISIONS OF OTHER STATUTES FOR THE CONTENTION THAT 'ARTICLE' INCLUDES GOODS AND GOODS COULD BE AN/MATE OBJECTS AND, VIEW ED IN THIS FIGHT, THE HATCHING OF EGGS WOULD COME WITHIN THE MEANING OF THE WORD RODUCE' WHICH IS OF WIDER IMPORT THAN THE WORD 'MANUFACTURE'. NO DOUBT, SEVERAL SALES TAX ACTS HAVE INCLUDED AN/MATE THINGS FOR THE PURPOSE OF LEVYING TAX ON SALES. BUT THE ME ANING ASSIGNED TO A PARTICULAR WORD IN A PARTICULAR STATUTE CANNOT BE IMPORTED TO A WORD USED IN A DIFFERENT STATUTE. '(PARA 16) 8. I N VIEW OF THE ABOVE DECISION OF THE HON'BL E SUPREME COURT, THE DESCRIPTION OF THE ACTIVITY OF THE ASSESSEE AND DEFINITION OF I CD AND CFS UNDER OTHER ENACTMENTS CANNOT BE ACCEPTED AS CONCLUSIVE AS REGARDS THE CONNOTATION OF THE WORD 'INFRASTRUCTURE FACILITY' OR 'PORT' OR INLAND PORT' USED IN SEC. 801A(4)(I) OF THE INCOME TAX ACT, 1961 BECAUSE DIFFERENT ENACTMENTS / STATUTES M AKE DIFFERENT CLASSIFICATION/CATEGORIZATION OF GOODS AND SERVICES FOR CERTAIN SPECIFIC PURPOSES AND REQUIREMENTS. THUS, MEANING OF THE SAME WORD MAY VARY FROM ONE STATUTE TO ANOTHER AND IT IS NOT CORRECT TO GO EXCLUSIVELY BY THE MEANING GIVEN TO A WORD IN OTHER ENACTMENTS, MORE SO WHEN THE CBDT HAS ISS UED CLARIFICATION UNDER SEC. 80I A (4)(I) WITH RESPECT TO CFS AND I CD AND WHETHER THEY FORM PART OF PORT OR INLAND PORT. FROM THE ABOVE DISCUSSION, THE FOLLOWING FACTS EMERGE THAT MAKE THE ASSESSEE COMPANY M/S. GATEWAY EAST INDIA PVT . LTD INELIGIBLE FROM CLAIMING DEDUCTION U/S. 80I A (4) OF THE I.T. ACT, 1961 . 9 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) 9 . BEING AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD.CIT(A). BEFORE T HE LD. CIT(A) , THE ASSESSEE HAS RELIED ON THE DECISION OF THE ASSESSEES OWN CASE FOR THE A.Y. 2013 - 14 IN ITA NO. 342/VIZ/2017 , DATED 11/10/2017 . THE LD. CIT(A) BY FOLLOWING THE DECISION OF THE ITAT, VISAKHAPATNAM BENCH IN ASSESSEES OWN CASE FOR THE A.Y. 2013 - 14 DIREC TED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE U/SEC. 80IA(4) . FOR THE SAKE OF CONVENIENCE , THE RELEVANT PORTION OF THE ORDER OF THE LD.CIT(A) IS EXTRACTED AS UNDER: - I HAVE CAREFULLY CONSIDERED THE ABOVE SUBMISSIONS. I HAVE ALSO PERUSED THE ORDER OF THE HON'BLE TRIBUNAL, VISAKHAPATNAM BENCH IN ASSESSEE'S OWN CASE FOR THE ASST. YR. 2013 - 14 IN ITA NO.342/VIZ/2017, DATED 11 - 10 - 2017. THE RELEVANT PORTION OF THE DECISION OF THE HON'BLE TRIBUNAL IS EXTRACTED BELOW : THE ISSUE INVOLV ED IN THIS APPEAL 'WHETHER THE ASSESSEE IS ELIGIBL E FOR DEDUCTION UNDER SECT/ON 80I A (4) OR NOT', HAS ALREADY BEEN CONSIDERED BY THE COORDINATE BENCH OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2011 - 12 IN ITA NO. 15/VIZ/2015, BY ORDER DATED 29/04/2015 AND ALSO FOR THE ASSESSMENT YEAR 2012 - 13 IN ITA NO. 178/VIZ/2016 BY ORDER DATED 19/04/2017, WHEREIN THE TRIBUNAL HELD THAT THE ASSESSEE 15 ELIGIBLE FOR CLAIM UNDER SECT/ON 801A(4) AND UPHELD THE ORDER PASSED BY THE L D. C IT (A). FOR THE SAKE OF CONVEN IENCE, THE ORDER PASSED BY THE TRIBUNAL IN ITA NO. 178/VIZ/2016 IS EXTRACTED AS UNDER: - 8 . THE ONLY ISSUE FOR CONSIDERATION BEFORE US IS WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 8 0 - IA(4) OF THE ACT OR NOT? UNDER THE SIMILAR SET OF FAC TS FOR THE EARLIER ASSESSMENT YEAR I.E. ASSESSMENT YE A R 2011 - 12 , THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 15/VIZAG/2015, BY ORDER DATED 29/04/2015 HAS CONSIDERED THE FACTS AND OTHER RELEVANT MATERIAL, PASSED A DETAILED ORDER BY HOLDING THAT THE ASSE SSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 - IA(4) OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IS EXTRACTED IS UNDER: - IN CIRCULAR NO. 18/2009 DATED 8/6/2009 ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOM S IN F.NO.434/17/2009 - CUS.IV THE DIFFERENCE BETWEEN INLAND CONTAINER DEPOTS ( I CD) AND CONTAINER FREIGHT STATIONS (CFS) HAS BEEN SPELT OUT IN THE FOLLOWING MANNER : 10 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) DEFINITION OF I CD: AN INLAND CONTAINER DEPOT MAY BE DEFINED AS A COMMON USER FACILITY WITH PUBLIC AUTHORITY STATUS (EMPHASIS SUPPLIED) EQUIPPED WITH FIXED INSTALLATIONS AND OFFERING SERVICES FOR HANDLING AND TEMPORARY STORAGE OF IMPORT / EXPORT LADEN AND EMPTY CONTAINERS 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 FROM SUCH STATIONS. 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 CLEARANCE BY THE CUSTOMS. FIRSTLY, CFS DO NOT HAVE 'PU BLIC AUTHORITY STATUS' WHERE AS I CD IS A PLACE THAT ACTS AS A 'SELF CONTAINED CUSTOMS STATION' AS CATEGORICALLY SPELT IN CIRCULAR OF CBEC DT.8.6.2009. FURTHER THE SAID CIRCULAR CLEARLY DISTINGUISHES I CD AND CFS AND MAKES IT VERY OBVIOUS THAT CFS IS NOTHING BUT A WAREHOUSE. DISTINCTION BETWEEN I CD & CFS 'INLAND CONTAINER DEPOT IS A PLACE THAT ACTS AS A 'SELF CONTAINED CUSTOMS STATIONS' LIKE A PORT OR AIR CARGO UNIT WHERE - FILLING OF CUSTOMS MANIFESTS. BILLS OF ENTRY SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITI ES 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 I CD IS A SELF CONTAINED CUSTOMS STATION LIKE A PORT OR AIR CARGO UNIT WHERE FILING OF CUSTOMS MANIFESTS, BILLS OF ENTR IE S, SHIPPING BILLS AN D OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT, TRANS SHIPMENT, ETC., TAKE PLACE. AN I CD 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 WITH IN - BUILT 11 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) CAPACITY TO ENTER EXAMINATION REPORTS AND ENABLE ASSESSMENT OF DOCUMENTS, PROCESSING OF MANIFEST, AMENDMENTS, ETC. CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UND ER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT 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 CUSTO M S PORT, AIRPORT, LCS/I CD. 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/ICD. A CFS CANNOT HAVE AN INDEPENDENT EXISTENCE AND HAS TO BE LINKED TO 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 CA RGO. THUS, CUSTOMS FUNCTIONS RELATING TO PROCESSING OF MANIFEST, IMPORT / EXPORT DECLARATIONS AND ASSESSMENT OF BILL OF ENTRY / SHIPPING BILL ARE PERFORMED IN THE CUSTOM HOUSE / CUSTOM OFFICER THAT EXERCISES JURISDICTION OVER THE PARENT PORT / AIRPORT / I C D / LCS TO WHICH THE SAID CFS IS ATTACHED. IN THE CASE OF CUSTOMS STATIONS HAVING FACILITY OF AUTOMATED PROCESSING OF DOCUMENTS, TERMINALS ARE PROVIDED AT SUCH CFSS FOR RECORDING THE RESULT OF EXAMINATION, ETC. IN SOME CFSS, EXTENSION SERVICE CENTERS ARE A VAILABLE FOR FILING DOCUMENTS, AMENDMENTS ETC. HOWEVER, THE ASSESSMENT OF THE DOCUMENTS ETC IS CARRIED OUT CENTRALLY. AN I CD MAY ALSO 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 THE RE ARE 28 CFSS LINKED TO CHENNAI PORT) (REFER CIRCULAR NO. 18/2009 - CUST., DATED 8 - 6 - 2009). A STANDALONE CUSTOMS CLEARANCE FACILITY IN AN INLAND COMMISSIONERATE CANNOT BE APPROVED BY THE COMMISS IONER AS A CFS, IF THERE IS NO I CD / PORT WITHIN ITS JURISDICTION TO WHICH THE SAID CFS CAN BE ATTACHED. SUCH A FACILITY C AN, HOWEVER, BE NOTIFIED AS AN I CD I.E., AS AN INDEPENDENT CUSTOMS STATION WITH PROVISION FOR FILING AND ASSESSMENT OF DOCUMENTS AND EXAMINATION OF GOODS. A CUSTOMS CLEA RANCE FACILITY COULD BE ESTABLISHED AS A CFS AT A PORT CITY FOR EXAMINATION OF IMPORTED / EXPORT GOODS, SINCE THE CFS WOULD FALL UNDER THE JURISDICTION OF COMMISSIONER OF CUSTOMS, HAVING JURISDICTION OVER THE CUSTOMS PORT WITH WHICH THE CFS WOULD BE ATTACH ED. FURTHER, IN A PORT CITY SUCH AS CHENNAI OR MUMBAI, I T MAY BE POSSIBLE TO DEVELOP AN I CD WITHIN THE TERRITORIAL JURISDICTION OF THE CONCERNED CUSTOMS COMMISSIONERATE IN ADDITION TO EXISTING CFSS. SUCH AN I CD SHOULD BE CAPABLE OF PROVIDING FULL - FLEDGED C USTOMS SERVICES, INDEPENDENT EDI SYSTEM, AND ALL PROCEDURES MEANT FOR TRANSSHIPMENT OF CARGO HAVE TO BE FOLLOWED FOR MOVEMENT OF GOODS FROM THE PORT OF IMPORT TO THE ICD. FURTHER, SUCH AN I CD WOULD FUNCTION AS AN INDEPENDENT CUSTOMS STATION IN ALL RESPECTS AND WOULD 12 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) NOT BE ATTACHED TO ANY OTHER PORT OR AIRPORT. THUS, IN RESPECT OF PROPOSALS FOR SETTING UP OF I CD / CONTAINER FREIGHT STATION FROM PROSPECTIVE OPERATORS IT HAS TO BE EXAMINED WHETHER THE PROPOSED FACILITY IS REQUIRED TO BE APPROVED AS AN I CD OR CFS. IMPORTED (CONDITION OF TRANSSHIPMENT) REGULATIONS, 1995. ON THE OTHER HAND, MOVEMENT OF GOODS FROM A PORT I AIRPORT /LCS OR AN I CD TO A CFS IS AKIN TO LOCAL MOVEMENT FROM A CUSTOMS AREA OF THE CUSTOMS STATION TO ANOTHER CUSTOMS AREA OF THE SAME STATION, 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 LEARNE D AR OF THE APPELLANT, THE ABOVE CIRCULAR ANSWERS IN A VERY CLEAR AND CATEGORICAL MANNER THE OBJECTIONS RAISED BY THE ASSESSING OFFICER. 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 10/2/2005, WRITTEN TO THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY REGARDING SETTING UP OF A CFS AT VISAKHAPATNAM APROPOS THE ASSESSEE'S CASE. IN THE CASE OF A L LOGISTICS P. LTD. (SUPRA) THE CHEN DL 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 BO DY, THE ASSESSEE IS ENTITLED TO CLAIM THE BENEFIT OF SECT/ON 80 I A(4)(I). THE ASSESSEE HAD MADE AN APPLICATION FOR SETTING UP OF CFS AT HA/DIA. IN RESPONSE TO THE APPLICATION OF THE ASSESSEE, THE DEPARTMENT OF COMMERCE, INFRASTRUCTURE DIVI S I ON, MINISTRY OF COMMERCE AND INDUSTRY APPROVED THE PROPOSAL OF THE ASSES SEE FOR SETTING UP OF CFS AT HAL DIA FOR HANDLING IMPORT/EXPORT OF CARGO SUBJECT 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 UP CFS AT HALDIA. THE CONTENTS OF THE LETTER ARE REPRODUCED HEREIN BEL OW: NO. 16/6/2003 - IN FRA - I GOVERNMENT OF INDIA MINIS TRY OF COMMERCE & INDUSTRY DEPTT. OF C OMMERCE INFRASTRUCTURE DIVISION UDYOG BHAWAN, NEW DE L HI. DATED THE 27TH MAY, 2003. TO THE DIRECTOR, M/S.AL LOGISTICS PVT. LTD., CHENNAI. SUBJECT: SETTING UP OF AN CFS AT HALDIA. SIR, I AM DIRECTED TO REFER TO YOUR APPL ICATION DATED 8.2.2003 ON THE 13 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) ABOVE SUBJECT AND TO SAY THAT THE GOVERNMENT HAS APPROVED YOUR PROPOSAL FOR SETTING UP OF AN CONTAINER FREIGHT STATION AT HA/DIA FOR HANDLING IMPORT AND EXPORT CARGO. THE APPROVAL IS SUBJECT TO THE FOLLOWING TERMS AND CONDITIO NS: - A) THE LETTER OF INTENT HOLDER SHALL TAKE ADEQUATE STEPS TO CREATE PROPER INFRASTRUCTURE KEEPING IN VIEW THE INDICATIVE NORMS GIVEN IN PARTS A & B OF THE GUIDELINES FOR SETTING UP IN/AND CONTAINER DEPOTS/ 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 VIO LATION OF THE CUSTOMS AND OTHER LAWS OF THE LAND AND RULES. D) A QUARTERLY PROGRESS REPORT OF THE IMPLEMENTATION 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 M/O COMMERCE, FAILING WHICH THE APPROVAL GRANTED WOULD BE AUTOMATICALLY CANCELLED. 2. THE FACILITY TO BE SET UP SHALL BE FULL COMPUTERIZED, WITH EDI COM PATIBILITY AND A MINIMUM COMPLEMENT OF EQUIMENT AND ACCESSORIES AS NECESSARY SHALL BE MADE AVAILABLE AT THE FACILITY. THE INDICATIVE LIST OF EQUI P MENT/ ACCESSORIES CONSIDERED NECESSARY IS ANNEXED. THE STATUS REGARDING CONFIRMATION OF THE INSTALLATION/AVAIL ABILITY OF THE ITEMS SHALL BE FURNISHED TO THE APPROPRIATE AUTHORITIES TO FACILITATE ISSUE OF REQUISITE NOTIFICATION. PLEASE ACKNOWLEDGE RECEIPT OF THIS LETTER. YOURS FAITHFULLY, S D/ - (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 AND 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, STORING, IMPORT CONTAIN ERS, RECEIVING/CONSOLIDATING EXPORT CARGO ETC. VIDE PUBLIC NOTICE DT. 10 - 11 - 2013. THE PUBLIC NOTICES WERE 14 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) ISSUED BY THE OFFICE OF THE COMMISSIONER OF CUSTOMS (PORT) KOLKATTA. 8. THUS, IT IS EVIDENT THAT THE PROPOSAL OF THE ASSESSEE WAS ACCEPTED BY THE GOVE RNMENT ON CERTAIN CONDITIONS WHICH WERE DULY COMPLIED WITH BY THE ASSESSEE. THERE MAY NOT BE ANY SPECIFIC AGREEMENT, BUT THE SEQUENCES OF EVENTS DEARLY SHOW THAT THE ASSESSEE IS PROVIDING CFS FACILITY IN ACCORDANCE WITH THE CONDITIONS LAID D OWN BY THE GOVE RNMENT. IN SUCH CI RCUMSTANCES THERE IS NO NEED TO INSIST FOR THE SPECIFIC EXECUTION OF AGREEMENTS. THE CO - ORDINATE BENCH OF THE TRIBUNAL I N THE CASE OF UNITED LINER AGENCIES OF INDIA (PRIVATE) LTD., VS. JO I NT CIT (OSD) IN ITA NO5.273&275/MUM/2013 (SUPRA), HAS TAK EN A SIMILAR VIEW. WHERE NO SPECI FIC 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. THU S, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS COMPLIED WITH ALL THE PROVISIONS OF SECTION 801A(4)(I) AND IS ELIGIBLE T O CLAIM DEDUCTION UNDER THE SAID SECTION. THE IMPUGNED ORDER IS SET ASIDE. THE APPEAL OF THE ASSESSEE IS ALLOWED.' RESPECTFULLY F OLLOWING 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. THE HON'BLE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION LTD. (SUPRA) HELD AS FOLLOWS : THE TERM 'INFRASTRUCTURE 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 NO TIFIED 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 FA C IL I TY' IN SUB - SECTION (12), CLAUSE 'CA), WITH EFFECT FROM APRIL 1, 1999. WHEN THE ENTIRE SECTION WAS RECAST AND EVEN AFTER SEVERAL AMENDMENTS WERE THEREAFTER MACE 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 WORD S 'INLAND CONTAINER DEPOT' 'WERE INTRODUCED IN SEC. 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 NOTIFICATION APPOINTING THE PLACES WHICH ALONE SHALL BE CONSIDERED AS IN/AND CONTAINER DEPOTS FOR THE UNLOADING OF IMPORTED GOODS AND LOADING OF EXPORTED GOODS. THE CENTRAL BOARD OF EXCI SE AND CUSTOMS ISSUED A CLA RIFICATION THAT INLAND CONTAINER DEPOTS WERE IN/AND PORTS. THE POWER TO NOTIFY INFRASTRUCTURE FACILITIES FOR THE PURPOSE OF THE SECTION WAS 15 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) 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 WOULD CEASE TO HAVE FROM APRIL 1, 2002. THE ASSESSEE, A PUBLIC SECTOR UNDERTAKING, WAS E NGAGED IN THE BUSINESS OF HANDLI NG AND TRANSPORTATION OF CONTAINERIZED CARGO. THE ACTIVITY OF THE ASSESSEE WAS CARRIED OUT MAINLY ON ITS INLAND CONTAINER DEPORTS. CENTRAL FREIGHT 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. T HE ASSESSING OFFICER DENIED SPECI AL DEDUCT/ON 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 SE C. 801A(12)(CA). HAVING REGARD TO THE PROVISIONS 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 'IN/AND PORT' AS AN INFRASTRUCTURE FACILITY A ND ALSO THAT CUSTOMS CLEARANCE ALSO TAKES PLACE IN THE INLAND CONTAINER DEPOT, THE ASSESSEE 'S CLAIM THAT THE INLAND CONTAINER DEPOTS WERE INLAND PORTS UNDER EXPLANATION (D) TO SEC. 801A(4) REQUIRED TO BE UPHELD. THE ISSUE HAS ALSO BEEN CLARIFIED BY THE GOV ERNMENT VIDE CBEC CIRCULAR NO. 18/2009 DATED 8/6/2009. INSOFAR AS CASE LAWS RELIED ON BY THE ASSESSEE IS CONCERNED, IN THE CASE OF A.L. LOGISTICS (P)LTD., (SUPRA), THE HON'BLE MADRAS HIGH COURT HELD THAT PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS (INFRASTRUCTURE FACILITY), CONTAINER FREIGHT STATION IS PART OF INLAND PORT AND, THEREFORE, IS AN INFRASTRUCTURE FACILITY, AS DEFINED IN EXPLANATION TO SECTION 80 - IA(4)(I) OF THE ACT, ASSESSEE IS ELIGIBLE FOR DEDUCTION. IN THE CASE OF CONTINENTAL WAREHOUSI NG CORPORATION (NHAVA SHEVA) LTD. (SUPRA), THE HON'BLE BOMBAY HIGH COURT HAS HELD THAT PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS (INFRASTRUCTURE FACILITY), SET UP WITHIN PRECINCTS OF PORT, THEN, HAVING CONSIDERED ITS PROXIMITY TO SEA - PORT AND ITS ACTIVITIES, IT CAN BE SAFELY CONCLUDED THAT DEDUCTION ADMISSIBLE UNDER SUB - SECTION (4) OF SECTION 80 - IA CAN BE CLAIMED BY BOTH ICDS AND CFS S . KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY FOLLOWING THE DECISION IN ASSESSEE'S OWN CASE FO R THE ASSESSMENT YEAR 2011 - 12 IN ITA NO. 15/VIZAG/2015, BY ORDER DATED 29/04/2015 AND ALSO BY FOLLOWING THE DECISION IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2012 - 13 IN ITA NO. 178/VIZ/2016 DATED 19/04/2017 AND ALSO THE DECISIONS OF HON'BLE BOMBAY HI GH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA) AND THE HON'BLE MADRAS HIGH COURT IN THE CASE OF A.L. LOGISTICS (P) LTD. (SUPRA), WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE ID. CIT(A). 16 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) THUS, THIS APPEAL FILED BY THE REVENUE IS DISMISSED. RESPECTFULLY FOLLO WING THE ABOVE ORDER OF THE HON 'BLE TRIBUNAL, THE ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCT/ON CLAIMED BY THE ASSESSEE U /S. 80I A OF THE I.T.ACT. 10 . ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER IN APPEAL BEFORE THIS TRIBUNAL. 1 1 . LD.DR STRONGLY RELIED ON THE GROUNDS OF APPEAL AND SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 1 2 . PER CONTRA , L D. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF THE ITAT, VISAKHAPATNAM BENCH IN ASSESSEES OWN CASE IN ITA NO. 342/VIZ/2017, DATED 11/10/2017. THE LD. CIT(A) BY FOLLOWING THE SAME, D IRECTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION U/SEC. 80IA TO THE ASSESSEE AND REQUESTED THE BENCH TO FOLLOW THE SAME. HE FURTHER RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. CONTAINER CORPORATION OF INDIA LTD. [(2018) 404 ITR 397]. 1 3. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. 1 4 . THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER ASSESSEE ENGAGED IN THE BUSINESS OF OPERATION OF CFS IS ELIGIBLE FOR CLAIMING DEDUCTION U/ SEC. 80IA (4) OR NOT. ACCORDING TO THE ASSESSING OFFICER, 17 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) T H E ASSESSEE IS NOT WITHIN THE PREMISES OF THE PORT AND THE RE FORE NOT ELIGIBLE FOR DEDUCTION U/SEC. 80IA (4) OF THE ACT. THE ASSESSING OFFICER HAS DISCUSSED IN HIS ORDER IN DETAIL AT PAGE NOS. 5 TO 7 AND HELD THAT THE DESCRIPTION OF THE ACTIVITY OF THE ASSESSEE AND THE DEFINITION OF ICD AND CFS UNDER THE ENACTMENTS CANNOT BE ACCEPTED AS CONCLUSIVE AS R E GARDS TH E CONNOTATION OF THE WORD INFRASTRUCTURE FACILITY OR PORT OR INLAND PORT USED IN SEC. 80IA (4) OF THE ACT . ON APPEAL, LD. CIT(A) BY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y. 2013 - 14 AND ALSO THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL W AREHOUSING CORPORATION [(374 ITR 645) (BOM. HC)] A S ALSO THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. A.L. LOGISTICS PVT. LTD. [(374 ITR 609) (MADRAS HC) DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION U/SEC. 80IA (4) TO THE ASSESSEE . BEFORE US, LD.COUNSEL FOR THE ASSESSEE HAS RELIED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CONTAINER CORPORATION OF INDIA (SUPRA) WHEREIN INLAND CONTAINER DEPOTS ARE INLAND PORTS SUBJECT TO PROVIS I ONS OF SECTION 80IA AND DEDUCTION CAN BE CLAIMED FOR INCOME EARNED OUT OF THESE DEPOTS. THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 342/VIZ/2017 , DATED 11/10/2017 BY FOLLOWING THE DECIS I ON OF THE ITAT, VISAKHAPATNAM BENCH IN ASSESSEES OWN CASE IN ITA NO. 178/VIZ/2016 , 18 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) DATED 19/04/2017 HAS HELD IN FAVOUR OF THE ASSESSEE . FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER: - 8 . THE ISSUE INVOLVED IN THIS APPEAL WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4) OR NOT, HAS ALREADY BEEN CONSIDERED BY THE COORDINATE BENCH OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2011 - 12 IN ITA NO.15/VIZ/2015, BY ORDER DATED 29/04/2015 AND ALSO FOR THE ASSESSMENT YEAR 2011 - 12 IN ITA NO. 178/VIZ/2016 BY ORDER DATED 19/04/2017, WHEREIN THE TRIBUNAL HELD THAT THE ASSESSEE IS ELIGIBLE FOR C LAIM UNDER SECTION 80IA(4) AND UPHELD THE ORDER PASSED BY THE LD. CIT(A). FOR THE SAKE OF CONVENIENCE, THE ORDER PASSED BY THE TRIBUNAL IN ITA NO. 178/VIZ/2016 IS EXTRACTED AS UNDER: - 8. THE ONLY ISSUE FOR CONSIDERATION BEFORE US IS WHETHER THE ASSESSE E IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 - IA(4) OF THE ACT OR NOT? UNDER THE SIMILAR SET OF FACTS FOR THE EARLIER ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2011 - 12, THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 15/VIZAG/2015, BY ORDER DATED 29/04/2015 HAS CONSIDERED THE FACTS AND OTHER RELEVANT MATERIAL, PASSED A DETAILED ORDER BY HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 - IA(4) OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IS EXTRACTE D IS UNDER: - 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 FOLLO WING 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 INSTALLATIONS AND OFFERING SERVICES FOR HANDLING AND TEMPORARY STORAGE OF IMPOR T/EXPORT LADEN AND EMPTY CONTAINERS 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. TRANSHIPMEN T OF CARGO CAN ALSO TAKE PLACE FROM 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 CLEARANCE 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 19 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) 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 BET WEEN 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 MANIFESTS, BILLS OF ENTRY, SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTI VITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE - EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT, TRANSHIPMENT, ETC., TAKES PLACE.' 'CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UND ER 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 CONTAINED CUSTOMS STATION' LIKE A PORT OR AIR CARGO UNIT WHERE FILING OF CUSTOMS MANIFESTS, BILLS OF ENTRY S, 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 WITH IN - BUILT CAPACITY TO ENTER EXAMINATION REPORTS AND ENABLE ASSESSMENT OF DOCUMENTS, PROCESSING OF MANIFEST, AMENDMENTS, ETC. 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. A CFS IS ONLY A CUSTOMS AREA LOCATE D IN THE JURISDICTION OF A COMMISSIONER OF CUSTOMS EXERCISING CONTROL OVER A SPECIFIED CUSTOMS PORT, AIRPORT, LCS/LCD. A CFS CANNOT HAVE AN INDEPENDENT EXISTENCE AND HAS TO BE LINKED TO A CUSTOMS STATION WITHIN THE JURISDICTION OF THE COMMISSIONER OF CUSTO MS. 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 TH E PARENT PORT/AIRPORT/ICD/LCS TO WHICH THE SAID CFS IS ATTACHED. IN THE CASE OF CUSTOMS STATIONS HAVING FACILITY OF AUTOMATED 20 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) PROCESSING OF DOCUMENTS, TERMINALS 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 ALSO 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 STANDALONE 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 I CD I.E., AS 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 WOU LD FALL UNDER 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 JURISD ICTION 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 MOVEM ENT OF GOODS 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 FRE IGHT STATION 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 (CONDITION OF TRANSHIPMENT) 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 STATION, COVERED BY LOCAL PROCEDURE EVOLVED BY THE COMMISSIONER OF CUSTOMS AND COVERED BY BONDS, BANK GUARANTEE, ETC. FURTHER, THE PERSON UNDERTAKING THE TRANSHIPMENT 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. 21 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) 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 CFS AT HALDIA. IN RESPONSE TO THE APPLICATION OF ASSESSEE, THE DEPARTMENT OF COMMERCE, INFRASTRUCTURE DIVISION, MINI STRY OF COMMERCE AND INDUSTRY APPROVED THE PROPOSAL OF THE ASSESSEE FOR SETTING UP OF CFS AT HALDIA FOR HANDLING IMPORT/EXPORT OF CARGO SUBJECT 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 UP CFS AT RALDIA. THE CONTENTS OF THE LETTER ARE REPRODUCED HEREIN BELOW: 'NO. 16/6/2003 - LNFRA - I GOVERNMENT OF IN DIA MINISTRY OF COMMERCE & INDUSTRY DEPTT. OF COMMERCE INFRASTRUCTURE DIVISION UDYOG BHAWAN, NEW DELHI, DATED THE 27TH MAY,2003. TO THE DIRECTOR, M/S A L LOGISTICS PVT. LTD., CHENNAI. SUBJECT: SETTING UP OF AN CFS AT HALDIA. 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 OF 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 INDICATIVE NORMS GIVEN IN PARTS A& B OF THE GUIDELINES FOR SETTING UP INLAND CONTAINER DEPOTS I CONTAINE R 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. 22 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) (C) THE APPROVAL WOULD BE SU BJECT 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 IMPLEMENTATION 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 FULLY COMPUTERIZED, WITH EDI COMPATIBILITY AND A MINIMUM COMPLEMENT OF EQUIPMENT AND ACCESSORIES AS NECESSARY SHALL BE MADE AVAILABLE AT THE 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 NOTIFICATION. 3. PLEASE ACKNOWLEDGE RECEIPT OF THIS LETTER. YOURS FAITHFULLY, SD/ - (N.G. BISWAS) DIR ECTOR' 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 M ENTIONED 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, STORING, IMPORT CONTAINERS, 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 GOVERNMENT 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 TH E GOVERNMENT. 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 AGREE MENT 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 COMPLIED WITH ALL THE PROVISIONS OF SECTION 80IA(4)(I) AND IS ELIGIBLE TO CLAIM DEDUCTION UNDER THE SAID SECTION. 23 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) 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 TER M INFRASTRUCTURE 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 T AXES. 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 SEVE RAL AMENDMENTS WERE THEREAFTER MADE TO THE SECTION, INLAND PORTS CONTINUED TO ENJOY THE DEDEDUCTION AS INFRASTRUCTURE FACILITY. THERE IS NO DEFINITION OF THE WORDS INLAND PORTS IN ANY OF THE DICTIONARIES. BUT THE WORDS INLAND CONTAINER DEPOT WERE INTR ODUCED IN SEC. 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 NOTIFICATION 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 DEP OTS WERE INLAND 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 WOULD CEASE TO HAVE FROM APRIL 1, 2002.THE ASSESSEE, A PUBLIC SECTOR UNDERTAKING, WAS ENGAGED IN THE BUSINESS OF HANDLING AND 12 TRANSPORTATION OF CONTAINERISED CARGO. THE ACTIVITY OF THE ASSESSEE WAS CARRIED OUT MAINLY ON ITS INLAND CONTAINER DEPO RTS, CENTRAL FREIGHT 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 APP EAL 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 T HE PROVISIONS OF THE CUSTOMS ACT, THE COMMUNICATION ISSUED BY THE CENTRAL BOARD OF EXCISE AND 24 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) 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 DATED 08/06/2009. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE ALLOW THIS APPEAL OF THE ASSESSEE. 9. INSOFAR AS CASE LAWS RELIED ON BY THE ASSESSEE IS CONCERNED, IN THE CASE OF A.L. LOGISTICS (P) LTD. (SUPRA), THE HON'BLE MADRAS HIGH COURT HE LD THAT PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS (INFRASTRUCTURE FACILITY), CONTAINER FREIGHT STATION IS PART OF INLAND PORT AND, THEREFORE, IS AN INFRASTRUCTURE FACILITY, AS DEFINED IN EXPLANATION TO SECTION 80 - IA(4)(I) OF THE ACT, ASSESSEE IS E LIGIBLE FOR DEDUCTION. IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA), THE HON'BLE BOMBAY HIGH COURT HAS HELD THAT PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS (INFRASTRUCTURE FACILITY), SET UP WITHIN PRECINCTS OF PORT , THEN, HAVING CONSIDERED ITS PROXIMITY TO SEA - PORT AND ITS ACTIVITIES, IT CAN BE SAFELY CONCLUDED THAT DEDUCTION ADMISSIBLE UNDER SUB - SECTION (4) OF SECTION 80 - IA CAN BE CLAIMED BY BOTH ICDS AND CFSS. 10. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY FOLLOWING THE DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011 - 12 IN ITA NO. 15/VIZAG/2015, BY ORDER DATED 29/04/2015 AND ALSO THE DECISIONS OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA) AND THE HON'BLE MADRAS HIGH COURT IN THE CASE OF A.L. LOGISTICS (P) LTD. (SUPRA), THE APPEAL FILED BY THE REVENUE IS DISMISSED. 9. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY FOLLOWING THE DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011 - 12 IN ITA NO. 15/VIZAG/2015, BY ORDER DATED 29/04/2015 AND ALSO BY FOLLOWING THE DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012 - 13 IN ITA NO. 178/VIZ/2016 DATED 19/04/2017 AND ALSO THE DECISIONS OF HON'B LE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA) AND THE HON'BLE MADRAS HIGH COURT IN THE CASE OF A.L. LOGISTICS (P) LTD. (SUPRA), WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). THUS, THIS APPE AL FILED BY THE REVENUE IS DISMISSED. 25 ITA NO. 149/VIZ/2019 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) 1 5 . RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.YS. 2011 - 12 & 2013 - 14 AND ALSO BY FOLLOWING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD . (SUPRA) , WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). THUS, THIS AP P EA L FILED BY THE REVENUE IS DISMISSED. 1 6 . IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 0 6 T H DAY OF SEPT . , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 0 6 T H SEPTEMBER , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE M/S. GATEWAY EAST INDIA PVT. LTD., CONTAINER FREIGHT STATION, VPT EXIM PARK, OPP. GAIL, NEAR AYYAPPA SWAMI TEMPLE, SHEELANAGAR, VISAKHAPATNAM. 2. THE REVENUE ACIT, CIRCLE - 3(1), VISAKHAPATNAM. 3. THE PR. CIT - 1, VISAKHAPATNAM. 4. THE CIT(A) - 1, VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.