M/s Gateway East India Pvt., Ltd., Visakhapatnam V. The Addl.CIT, Visakhapatnam

ITA 15/VIZ/2015

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1131 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 07-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D MANOJ KUMAR
• Assessee Lawyers: M AGARWAL
• Section: 153A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 15/VIZAG/2015 ASSESSMENT YEAR: 2011-12 M/S GATEWAY EAST INDIA PVT. LTD. VS. ACIT, CONTAINER FREIGHT STATION, VPT EXIM RANGE-3, PARK, OPP. GAIL NEAR AYYAPPA SWAMI VISAKHAPATNAM. TEMPLE, SHEELANAGAR, VISAKHAPATNAM. AABCV1938N (APPELLANT) (RESPONDENT) & SP NO. 15/VIZAG/2015 (IN ITA NO. 15/VIZA/2015) ASSESSMENT YEAR: 2011-12 M/S GATEWAY EAST INDIA PVT. LTD. VS. ACIT, CONTAINER FREIGHT STATION, VPT EXIM RANGE-3, PARK, OPP. GAIL NEAR AYYAPPA SWAMI VISAKHAPATNAM. TEMPLE, SHEELANAGAR, VISAKHAPATNAM. AABCV1938N (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI M. AGARWAL, ADV. REVENUE BY: SHRI D. MANOJ KUMAR, SR. DR DATE OF HEARING : 05.03.2015 DATE OF PRONOUNCEMENT : 29.04.2015 ORDER PER J.SUDHAKAR. REDDY : - THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, VISAKHAPATNA M DATED 03.12.2014 FOR THE ASSESSMENT YEAR 2011-12. 2 2. THE BRIEF FACTS RELATING TO THIS CASE ARE THAT T HE ASSESSEE COMPANY FILED RETURN OF INCOME FOR THE A.Y. 2011-12 ON 26.09.2011 DECLARING GROSS TOTAL INCOME OF RS. 2,40,68,838/-. OUT OF THE GROSS TOTAL INCOM E, THE ASSESSEE COMPANY CLAIMED DEDUCTION U/S 80IA(4) OF INCOME TAX ACT, 19 61 OF RS. 2,38,86,771/- AND RETURNED TOTAL INCOME OF RS. 1,82,067/-. THE APPEL LANT COMPANY IS A SUBSIDIARY OF GATEWAY DISTRIPARKS LTD. AND IS DOING OPERATIONS OF CONTAINER FREIGHT STATION (CFS) AT SHEELA NAGAR, PORT ROAD, VISAKHAPATNAM. THE ASS ESSEE COMPANYS BUSINESS IS TO OPERATE CFS, WHICH FACILITATES FOR IN TRANSIT CO NTAINERS HANDLING, REPAIR, STORAGE, ETC. THE ASSESSEE CLAIMED DEDUCTION AMOUNTING TO R S. 2,38,86,771/- U/S 80IA(4) OF THE INCOME TAX ACT, 1961 READ WITH THE EXPLANATI ON THERETO AS INFRASTRUCTURE FACILITY. THE AO CALLED UPON THE ASSESSEE TO JUST IFY ITS CLAIM FOR DEDUCTION U/S 80IA(4). IT WAS CONTENDED BEFORE THE AO THAT THE PR OVISIONS OF SEC. 80IA WAS AMENDED BY THE FINANCE ACT, 2000 AND AS PER CBDT CI RCULAR NO. 793, DT. 23 RD JUNE, 2000, THE PORT TRUST COULD CERTIFY STRUCTURES NEAR THE PORT FOR BENEFIT U/S 10(23G) AND SECTION 80IA OF THE INCOME TAX ACT AND THAT THE ASSESSEE-APPELLANT HAD OBTAINED SUCH CERTIFICATE FROM PORT TRUST OF VI SAKHAPATNAM. IT WAS ALSO SUBMITTED THAT THE ASSESSEE-APPELLANT GOT APPROVAL FROM MINISTRY OF COMMERCE & INDUSTRY AND THAT THE ASSESSEE WAS CLASSIFIED AS CFS BY THE COMMISSIONER OF CUSTOMS. IT WAS FURTHER SUBMITTED THAT IN VIEW OF T HE AMENDED PROVISION OF SECTION 80IA FROM A.Y. 2000-01, AN INLAND PORT FA LLS WITHIN THE DEFINITION OF INFRASTRCUTURE FACILITY U/S 80IA(4), AND THAT THE MINISTRY OF SHIPPING VIDE LETTER DTD. 16.09.2008 HAVE CLASSIFIED CFS AS INLAND PORT. WI TH REFERENCE TO THESE CIRCULARS, THE ASSESSEE HAS CONTENDED THAT IT FALLS WITHIN THE PURVIEW OF INLAND PORT AND IS ELIGIBLE FOR DEDUCTION U/S 80IA(4). HOWEVER, THE A O DID NOT ACCEPT THESE CONTENTIONS FOR THE DISCUSSION IN THE ASSESSMENT OR DER EXTRACT OF WHICH IS AS UNDER: THE EXPLANATION OFFERED VIDE THE ABOVE REFERRED LET TER HAS BEEN CAREFULLY PERUSED IN THE LIGHT OF THE NOTIFICATIONS AND CIRCULARS ISSUED BY THE BOARD. THE PROVISIONS OF SECTION 80IA(4) OF THE ACT HAVE BEEN SUBJECTED TO A MENDMENTS FROM TIME TO TIME. VIDE FINANCE ACT, 2007 WITH EFFECT FROM 01.04.2008, THE DEFINITION FOR INLAND PORT HAVE UNDERGONE CHANGES BY AMENDMENTS FROM TIME TO T IME BY THE BOARD CIRCULAR NO. 793, DTD. 23.06.2000 IS REPRODUCED AS UNDER: THE BOARD HAS RECEIVED VARIOUS REPRESENTATIONS SEE KING CLARIFICATION WHETHER STRUCTURES AT PORTS FOR STORAGE, LOADING AND UNLOAD ING ETC. WILL FALL UNDER THE DEFINITION OF PORT FOR THE PURPOSES OF SEC. 10(23 G) AND 80IA OF THE INCOME TAX ACT, 1961. 3 2. THE BOARD HAS CONSIDERED THE MATTER AND IT HAS BEEN DECIDED THAT SUCH STRUCTURES WILL BE INCLUDED IN THE DEFINITION OF PORT FOR TH E PURPOSE OF SECTION 10(23G) AND 80IA OF THE INCOME TAX ACT, 1961, IF THE FOLLOWING CONDITIONS ARE FULFILLED: (A) THE CONCERNED PORT AUTHORITY HAS ISSUED A CERT FICIATE THAT THE SAID STRUCTURES FORM PART OF THE PORT, AND (B) SUCH STRUCTURES HAVE BEEN BUILT UNDER BOT AND B OLT SCHEMES AND THERE IS AN AGREEMENT THAT THE SAME WOULD BE TRANSFERRED TO THE SAID AUTHORITY ON THE EXPIRY OF THE TIME STIPULATED IN THE AGREEMENT. THE ABOVE CIRCULAR WAS SUPERSEDED BY CIRCULAR NO. 1 0/2005 DATED 16.12.2005 WHICH IS REPRODUCED AS UNDER: REFERENCE IS INVITED TO BOARD CIRCULAR NO. 793 DAT ED 23.06.2000 AND AMENDMENT IN SECTION 80-IA BY THE FINANCE ACT, 2001. 2. PORT, FOR THE PURPOSE OF SECTION 10(23G) AND 80 IA OF THE INCOME-TAX ACT, 1961 INCLUDES STRUCTURES AT THE PORTS FOR STORAGE, LOADI NG AND UNLOADING ETC., IF THE FOLLOWING CONDITIONS ARE FULFILLED. (A) THE CONCERNED PORT AUTHORITY HAS ISSUED A CERT IFICATE THAT THE SAID STRUCTURES FORM PART OF THE PORT, AND (B) SUCH STRUCTURES HAVE BEEN BUILD UDNER BOT AND BOLT SCHEMES AND THERE IS AN AGREEMENT THAT THE SAME WOULD BE TRANSFERRED TO THE SAID AUTHORITY ON THE EXPIRY OF THE TIME STIPULATED IN THE AGREEMENT. THIS DEFINITION IS APPLICABLE TO A.Y. 2001-02 AND A NY EARLIER ASSESSMENT YEAR. 3. HOWEVER, FOR AN FROM A.Y. 2002-03 ONWARDS, STRU CTURES AT THE PORTS FOR STORAGE, LOADING AND UNLOADING ETC., WILL BE INCLUDED IN THE DEFINITION OF PORT FOR THE PURPOSE OF SECTION 10(23G) AND 80IA OF THE INCOME TAX ACT, 1961, IF THE FOLLOWING CONDITION IS FULFILLED: THE CONCERNED PORT AUTHORITY HAS ISSUED A CERTIFIC ATE THAT THE SAID STRUCTURES FORM PART OF THE PORT. ON PERUSAL OF THE CERTIFICATE ISSUED BY THE VISAKHA PATNAM PORT TRUST INDICATE THAT THE STRUCTURE ON WHICH THE ASSESSEE HAS CLAIMED DEDUCTI ON U/S 80IA(4) OF THE INCOME TAX ACT, 1961 DOES NOT FULFILL THE CONDITIONS ENUMERATE D IN CIRCULAR NO. 793, DTD. 23.06.2000 SUCH AS CONTAINER FREIGHT STATION HAS NO T 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 ME NTIONED IN CIRCULAR NO. 793, DTD. 23.06.2000 OR CIRCULAR NO. 10/2005, DTD. 16.12.2005 . IT CAN BE SEEN FROM THE ABOVE THAT THE CONDITIONS ENUMERATED VIDE CIRCULAR NO. 20 05, DTD. 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 CONDI TIONS LAID DOWN FOR SUCH STRUCTURE TO BE ELIGIBLE FOR DEDUCTION IS THAT THE CONCERNED PORT AUTHORITY HAS ISSUED A CERTIFICATE, THAT THE SAID STRUCTURES FORM PART OF THE PORT. IN SUPPORT OF THE ABOVE, THE ASSESSEE SUBMITTED A CERTIFICATE FROM THE VISAKHAPA TNAM PORT TRUST WHICH MENTIONS THAT THE CONTAINER FREIGHT STATION M/S GATEWAY EAST INDIA PVT. LTD. MAY BE CONSIDERED AS EXTENDED ARM OF THE PORT IN ACCORDANC E WITH CBDT CIRCULAR NO. 793, DTD. 23.06.2000 R.W. CLARIFICATION DTD. 24.04.2007 ISSUED BY THE CENTRAL BOARD OF CUSTOMS & EXCISE, NEW DELHI. ON PERUSAL OF THE SAID CERTIFICATE ISSUED BY THE VI SAKHAPATNAM PORT TRUST, IT CAN BE SEEN THAT THE STRUCTURE DOES NOT FORM PART OF THE P ORT IN AS MUCH 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.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 CLEARL Y REVEALS THE FACT THAT THE INFRASTRUCTURE FACILITY OF THE ASSESSEE IS NOT LOCA TED IN THE PORT BUT AN EXTENDED ARM OF THE PORT I.E., IN A PREMISES AWAY FROM THE PORT. S INCE IT IS AN EXTENDED ARM WHICH 4 MEANS AWAY FROM THE PORT IT IS CLEAR THAT IT IS NOT A PART OF THE PORT AS ENJOINED IN THE CIRCULAR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD . COUNSELS APPEARING ON BEHALF OF THE ASSESSEE-COMPANY RELIED UPON THE DECISION OF TH E HONBLE ITAT SPECIAL BENCH, MUMBAI AND THE SAID CASE LAW HAS BEEN CAREFULLY PER USED. THE DECISION OF HONBLE ITAT, SPECIAL BENCH, MUMBAI IN THE CASE OF M/S ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT FOR THE ASSESSMENT YEARS 2004-05 TO 2009-10 IN VOLVED GROUNDS REGARDING INTERPRETATION OF SECTION 153A AND DEDUCTION U/S 80 IA(4) OF THE INCOME TAX ACT, 1961 AND ARE, THEREFORE, DISTINGUISHABLE ON SALIENT FEAT URES 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 APPEALS BEFORE THE HONBLE HIGH COURT, MUMBAI. AFTER HAVING CAREFULLY CONSIDERED THE VARIOUS ISSUE S EMERGING FROM THE ABOVE CITED CIRCULARS OF THE BOARD AND THE DECISION OF THE HON BLE SPECIAL BENCH, MUMBAI, IT IS IMPORTANT TO REPRODUCE A CLARIFICATION ISSUED BY TH E CBDT REGARDING INFRASTRUCTURE ACTIVITIES U/S 80IA(4)(I) OF THE ACT WITH RESPECT T O CFS AND ICDS VIDE LETTER ADDRESSED TO ALL THE CHIEF COMMISSIONER OF INCOME TAX IN F.NO . 178/42/2010-ITAT-I, DT. 06.01.2011. UNDER SECTION 80IA(4)(I) OF INCOME-TAX ACT, A DEDU CTION IS GIVEN TO THE INCOME OF AN UNDERTAKING ENGAGED IN SETTING UP OF AN INFRASTRUCT URE FACILITY. THE TERM INFRASTRUCTURE FACILITY HAS BEEN DEFINED IN SECTI ON 80IA(4), INTER ALIA, AS UNDER: A PORT, AIRPORT, INLAND WATERWAY, INLAND PORT OR N AVIGATIONAL CHANNEL IN THE SEA. IN ORDER TO CLARIFY THE TERM PORT, AND WHETHER THE FAC ILITIES OF LOADING AND UNLOADING CONSTITUTE A PART OF A PORT, THE BOARD ISSUED TWO C IRCULARS I.E., CIRCULAR NO. 793 DATED 23.06.2000 AND CIRCULAR NO. 10 DATED 16.12.2005. I N THE FIRST CIRCULAR, IT WAS CLARIFIED THAT STRUCTURES AT PORTS FOR STORAGE, LOA DING AND UNLOADING WILL BE COVERED BY THE DEFINITION OF PORT FOR THE PURPOSE OF SECTIO N 10(23G) AND SECTION 80IA SUBJECT TO THE CONDITION THAT THE CONCERNED PORT AUTHORITIE S HAS ISSUED A CERTIFICATE THAT SUCH STRUCTURES FORM A PART OF THE PORT AND THE SAME HAV E BEEN CONSTRUCTED UNDER THE BOLT SCHEME. THIS WAS AGAIN REITERATED IN THE CIRC ULAR DTD. 16.12.2005 WHEREIN IT WAS STATED THAT FOR THE A.Y. 2002-03 ONWARDS, STRUC TURES AT PORTS FOR STORAGE, LOADING AND UNLOADING WILL BE INCLUDED IN THE DEFINITION OF PORT. REFERENCES HAVE BEEN RECEIVED IN THE BOARD SEEKING CLARIFICATION WHETHER THE CONTAINER FREIGHT STATIONS (CFSS) AND INLAND CONTAINER DEPOTS (ICDS) ARE ELIGI BLE FOR DEDUCTION U/S 80IA (4)(I) AND WHETHER THEY ARE TO BE CONSIDERED AS INFRASTRUC TURE FACILITY FOR THE PURPOSE OF THE SAID SUB-SECTION, ESPECIALLY IN VIEW OF THE AFORESA ID CIRCULAR NO. 10/2005, WHICH STATES THAT STRUCTURES FOR LOADING AND UNLOADING AT THE PO RT AREA ARE A PART OF THE PORT. THE BOARD HAS CONSIDERED THE ABOVE ISSUE AND IT IS CLAR IFIED THAT THE AFORESAID CIRCULAR IS APPLICABLE TO THE STRUCTURE FOR LOADING, UNLOADING AND STORAGE AT THE PORT. AN ICD OR A CFSS IS USUALLY NOT LOCATED AT THE PORT AND, THER EFORE, IT IS NOT A PART OF THE PORT FOR THE PURPOSE OF SECTION 80IA(4)(I) AND NOT COVERED B Y THE CIRCULAR NO. 10/2005 DATED 16.12.2005 AND CIRCULAR NO. 793 DT. 23.06.2000 ON T HE SUBJECT. IN THIS REGARD, IT IS FURTHER ADDED THAT IF SUCH A FACILITY IS LOCATED AT THE PORT THEN, IT CAN BE CONSIDERED TO BE AN INFRASTRUCTURE FACILITY BEING A PART OF THE P ORT. 2. REFERENCES HAVE ALSO BEEN RECEIVED AS TO WHETHE R INLAND CONTAINER DEPOTS (ICDS) AND CONTAINER FREIGHT STATION (CFS) CAN BE TERMED A S INLAND PORTS AND THEREBY CLASSIFIED AS INFRASTRUCTURE FACILITY U/S 80IA(4)(I ) OF THE INCOME-TAX ACT, 1961. IN THIS CONTEXT, I AM FURTHER DIRECTED TO CONVEY THAT THE B OARD HAS CONSIDERED THE ISSUE AND IT HAS BEEN DECIDED THAT AS ICDS AND CPSS ARE NOT PORT S LOCATED ON ANY INLAND WATERWAY, RIVER OR CANAL, AND, THEREFORE, THEY CANN OT BE CLASSIFIED AS INLAND PORTS FOR THE PURPOSE OF SECTION 80IA(4) OF THE INCOME-TAX AC T. 5 FROM THE ABOVE CLARIFICATION, THE FOLLOWING FACTS E MERGE THAT MAKE THE ASSESSEE COMPANY M/S GATEWAY EAST INDIA PVT. LTD. INELIGIBLE FROM CLAIMING DEDUCTION U/S 80IA(4) OF THE INCOME TAX ACT, 1961: AS STATED IN PARA 9 OF THIS ORDER ON DEFINITION OF BEING PART OF THE PORT, THE ICD OF THE ASSESSEE IS NOT LOCATED IN THE PORT, IT IS LOCATED ON A PREMISES SITUATED AWAY FROM THE PORT TAKEN ON LONG LEASE OF 30 YEARS BY THE VISAKHA PATNAM PORT TRUST, THE LAND DOES NOT BELONG TO THE VISAKHAPATNAM PORT TRUST AND IT I S NOT LOCATED IN THE PORT. SINCE IT IS NOT LOCATED IN THE PORT THE ASSESSEE DOES NOT FU LFILL THE CONDITIONS AS PER THE CIRCULAR FOR CLAIMING DEDUCTION. IMPORTANTLY BOTH ICD & CFS ARE NOT INFRASTRUCTURE F ACILITIES AS CLARIFIED BY THE CLARIFICATION CITED ABOVE AND HENCE ARE NOT ELIGIBL E FOR DEDUCTION U/S 80IA(4). THE CASE OF THE ASSESSEE SQUARELY FALLS UNDER THIS CLAR IFICATION. AN IMPORTANT CRITERIA FOR THE CLAIM U/S 80IA(4) OF THE INCOME TAX ACT, 1961 IS THE INDIAN COMPANY SHOULD ENTER INTO AN AGREEMENT WITH CENTRAL OR STATE GOVERNMENT OR A GOVERNMENT UNDERTAKING ETC. FOR OPERATING THE SAI D FACILITY SUBJECT TO THE CONDITION THAT SUCH FACILITY SHOULD BE TRANSFERRED TO THE SAI D GOVERNMENT UNDERTAKING WITHIN THE PERIOD STIPULATED IN THE AGREEMENT. THERE IS NO AG REEMENT BETWEEN THE ASSESSEE COMPANY AND THE GOVERNMENT OR BODY, ETC. AS ENJOINE D IN SECTION 80IA OF THE ACT FOR DEVELOPMENT OF THE SAID STRUCTURE. THIS IS A MAJOR CRITERIA GOVERNING THE ELIGIBILITY FOR CLAIMING DEDUCTION/S. 80IA WHICH THE ASSESSEE A LSO DOES NOT FULFILL. ACCORDINGLY THE AO HAS MADE THE IMPUGNED DISALLOWAN CE U/S 80IA(4) AND MADE THE IMPUGNED ADDITION OF RS. 2,39,86,771/-. 3. AGGRIEVED THE ASSESSEE CARRIED OUT THE MATTER IN APPEAL. THE FIRST APPELLATE AUTHORITY UPHELD THE ORDER OF THE AO AND DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED THE ASSESSEE HAS FILED THIS APPEAL ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) ERRED IN DISALLOWING DEDUCTION OF RS. 2,3 8,86,771/- ON THE BUSINESS OF DEVELOPING, OPERATING AND MAINTAINING A CONTAINE R FREIGHT STATION UNDER SECTION 80LA OF THE ACT. 2. THE LD.CIT (A) ERRED IN NOT CONSIDERING THE DECI SION OF THE HIGH COURT OF DELHI IN THE CASE OF CONTAINER CORPORATION OF INDIA V CIT (ITA NO. 1411109.967111 & 968111) . ALSO, IN CASE OF ALL CAR GO LOGISTICS LTD VS DCIT, THE SPECIAL BENCH HELD THAT CFS IS AN INLAND PORT AND IS THEREFORE 'INFRASTRUCTURE FACILITY' ENTITLED TO BENEFIT ULS 8 0IA(4) AND THEREFORE THE RATIO OF THE DECISION WOULD APPLY TO THE ASSESSEE. THE AS SESSEE ALSO RELIED ON THE CASE OF A L LOGISTICS P LTD VIS ITA; WHICH THE LD.C IT (A) ERRED BY NOT CONSIDERING. 3. THE LD.CIT (A) FAILED TO APPRECIATE THAT ONCE TH E DELHI HIGH COURT AND THE SPECIAL BENCH OF THE TRIBUNAL HAVE TAKEN TH E VIEW THAT CONTAINER FREIGHT STATION IS AN 'INLAND PORT' THEN A CIRCULAR ISSUED TO THE CONTRARY BY THE CBDT IS INVALID AND BAD IN LAW. 4. FURTHER, THE LD.CIT (A) FAILED TO APPRECIATE THA T IF THE STRUCTURE IS ALREADY IN THE PORT, THEN THE QUESTION OF TAKING TH E CERTIFICATE WOULD NOT ARISE. THEREFORE, WHEN THE CERTIFICATE STATES THAT THE STR UCTURE FORMS THE EXTENDED ARM OF THE PORT, IT IS A SUFFICIENT COMPLIANCE IN T ERMS OF CIRCULAR NO. 10 OF2005. THE CERTIFICATE FURTHER STATES THAT IT IS I SSUED IN RESPECT OF THE CLAIM OF DEDUCTION UNDER SECTION 80LA OF THE ACT. 6 THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE T O EACH OTHER. THE APPELLANT RESERVES THE RIGHT TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUND O F APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 5. THE LD. COUNSEL FOR THE ASSESSEE SHRI MADHU AGAR WAL SUBMITTED THAT THE ISSUE IN QUESTION IS NO MORE RES INTEGRA AND THAT IT IS COVERED BY THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CONTAIN ER CORPORATION OF INDIA VS. ACIT, REPORTED IN 346 ITR 140, WHEREIN IT IS STATED THAT CFS IS AN INLAND PORT . HE ALSO PLACED RELIANCE ON THE JUDGMENT OF THE SPEC IAL BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. SPECIFICALLY AT PARA 66. IT WAS FURTHER SUBMITTED THAT THE CONTROVERSY IN QUEST ION IS PUT TO REST BY THE CIRCULAR OF THE CBEC I.E. CIRCULAR NO. 18/2009 DATED 08/06/2 009. 6. THE LD. DR, SHRI MANOJ KUMAR, SR. DR ON THE OTHE R HAND OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT SECT ION 80IA(4) STIPULATES THAT THERE SHOULD BE AN AGREEMENT WITH THE CENTRAL GOVER NMENT, STATE GOVERNMENT, LOCAL AUTHORITY OR STATUTORY BODY AND THAT SUCH AN AGREEMENT WAS NOT SUBMITTED BY THE ASSESSEE BEFORE THE AO. HE SPECIFICALLY DREW T HE ATTENTION OF THE BENCH TO THE LAST PARA AT PAGE 7 OF THE ASSESSMENT ORDER. HE FU RTHER ARGUED THAT WHAT THE FACILITY THE ASSESSEE HAS IS NOT PART OF THE PORT A ND THAT IT IS LOCATED IN A PREMISES, WHICH IS SITUATED FAR AWAY FROM THE PORT AND HENCE THE ASSESSEE BECOMES INELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT. HE REFERRED TO THE CBDT CIRCULAR NO. 793 DATED 23/06/2000 AND SUBMITTED THAT THE CONDITIONS LAID D OWN THEREIN ARE: A) THE CONCERNED PORT AUTHORITY HAS ISSUED A CERTI FICATE THAT THE SAID STRUCTURE FORMS PART OF THE PORT AND; B) THAT THE STRUCTURE HAS BEEN BUILD UNDER BOT & B OLT SCHEME AND THERE IS AN AGREEMENT THAT THIS WOULD BE TRANSFERRED TO THE SAI D AUTHORITY ON THE EXPIRY OF THE TIME STIPULATED IN THE AGREEMENT. HE FURTHER SUBMITTED THAT THIS CIRCULAR WAS SUPERSE DED BY CBDT CIRCULAR NO. 10/2005 DATED 16/12/2005 AND ARGUED THAT ON A PERUS AL OF THE CERTIFICATE ISSUED BY VISAKHAPATNAM PORT TRUST, IT IS CLEAR THAT THE S TRUCTURES ON WHICH THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IA(4) OF THE I.T. ACT, 1 961, DOES NOT FULFILL THE CONDITIONS ENUMERATED IN THE CIRCULAR. HE CONTENDE D THAT THE ASSESSEE HAS NOT BUILT THE CONTAINER FREIGHT STATION, EITHER UNDER B OT OR BOLT SCHEME AND THERE IS NO AGREEMENT STIPULATING THAT THE STRUCTURE WOULD B E TRANSFERRED TO VISAKHAPATNAM 7 PORT TRUST ON EXPIRY OF THE STIPULATED AGREEMENT PE RIOD. ON THE ORDER OF THE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGIS TICS LTD., THE LD. DR SUBMITTED THAT THE ISSUE THEREIN WAS DIFFERENT AND WHAT WAS S AID BY WAY OF PASSING REMARKS ON THE DECISION OF THE HONBLE DELHI HIGH COURT CAN NOT BE TERMED AS RATIO DECIDENDI. IT WAS SUBMITTED THAT IT RELATED TO CFS AND THE ISSUE IN QUESTION HAS NOT BEEN DISCUSSED. 6.1. IN REPLY THE LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT LETTERS HAVE BEEN EXCHANGED BETWEEN THE PARTIES, A COPY OF WHICH HAS BEEN FILED BEFORE THE AO AND THE LETTER OF INTENT IN SUCH CASES IS TO BE TREATED AS AN AGREEMENT. HE RELIED ON THE DECISION IN THE CASE OF A.L. LOGISTICS PVT. LT D. VS. ITO, 49 TAXMAN.COM 251. HE CONTENDED THAT HIS CASE IS THAT THEY RUN A FACIL ITY IN THE INLAND PORT. 7. RIVAL CONTENTIONS HEARD. ON CAREFUL CONSIDERATI ON OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO ON PERUSAL OF TH E PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAW CITED, WE HO LD AS FOLLOWS: 8. IN CIRCULAR NO. 18/2009 DATED 08/06/2009 ISSUED B Y 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 STATION S(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 INSTALLATIONS AND OFFERING SERV ICES 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 ADMISSIO NS, RE-EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT. TRA NSSHIPMENT 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 NO T HAVE 'PUBLIC AUTHORITY STATUS' WHEREAS ICD IS A PLACE THAT ACTS AS A 'SELF CONTAINED CUSTOMS STATION' 8 AS CATEGORICALLY SPELT IN CIRCULAR OF CBEC DT. 08.0 6.2009. FURTHER THE SAID CIRCULAR CLEARLY DISTINGUISHES ICD AND CFS AND MAKE S 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 MANIFESTS, BILLS OF ENTRY, SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT A ND 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 CUST OMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOO DS 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 ENTRYS, SHIPP ING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARA NCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE-EXPORT, TEMPO RARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT, TRANSSHIPMENT, ETC., T AKE 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 SYS TEMS 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 CUSTO MS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOO DS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS. A CFS IS ONLY A CUSTOMS A REA LOCATED IN THE JURISDICTION OF A COMMISSIONER OF CUSTOMS EXERCISING CONTROL OVE R 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 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 CUS TOMS BESIDES STUFFING/DESTUFFING OF CONTAINERS AND AGGREGATION/S EGREGATION OF CARGO. THUS, CUSTOM'S FUNCTIONS RELATING TO PROCESSING OF MANIFE ST, IMPORT/EXPORT DECLARATIONS AND ASSESSMENT OF BILL OF ENTRY/SHIPPING BILL ARE P ERFORMED IN THE CUSTOM HOUSE/CUSTOM OFFICE THAT EXERCISES JURISDICTION OVE R THE PARENT PORT/AIRPORTLICD/LCS TO WHICH THE SAID CFS IS ATTAC HED. IN THE CASE OF CUSTOMS STATIONS HAVING FACILITY OF AUTOMATED PROCESSING OF DOCUMENTS, TERMINALS ARE PROVIDED AT SUCH CFSS FOR RECORDING THE RESULT OF E XAMINATION, ETC. IN SOME CFSS, EXTENSION SERVICE CENTERS ARE AVAILABLE FOR FILING DOCUMENTS, AMENDMENTS ETC. HOWEVER, THE ASSESSMENT OF THE DOCUMENTS ETC. IS CA RRIED 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 CI RCULAR NO. 18/2009-CUS. , DATED 8- 6-2009]. A STANDALONE CUSTOMS CLEARANCE FACILITY IN AN INL AND COMMISSIONERATE CANNOT BE APPROVED BY THE COMMISSIONER AS A CFS, IF THERE IS NO ICD/PORT WITHIN ITS 9 JURISDICTION TO WHICH THE SAID CFS CAN BE ATTACHED. SUCH A FACILITY CAN, HOWEVER, BE NOTIFIED AS AN ICD I.E., AS AN INDEPENDENT CUSTOMS STATION WITH PROVISION FOR FILING AND ASSESSMENT OF DOCUMENTS AND EXAMINATION OF GOOD S. A CUSTOMS CLEARANCE FACILITY COULD BE ESTABLISHED AS A CFS AT A PORT CI TY FOR EXAMINATION OF IMPORTED/EXPORT GOODS, SINCE THE CFS WOULD FALL UND ER THE JURISDICTION OF COMMISSIONER OF CUSTOMS, HAVING JURISDICTION OVER T HE 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 TERRIT ORIAL JURISDICTION OF THE CONCERNED CUSTOMS COMMISSIONERATE IN ADDITION TO EX ISTING CFSS. SUCH AN ICD SHOULD BE CAPABLE OF PROVIDING FULL-FLEDGED CUSTOMS 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 TH E 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 RES PECT OF PROPOSALS FOR SETTING UP OF ICD/CONTAINER FREIGHT STATION FROM PROSPECTIVE OPER ATORS IT HAS TO BE EXAMINED WHETHER THE PROPOSED FACILITY IS REQUIRED TO BE APP ROVED AS AN ICD OR CFS. MOVEMENT OF GOODS FROM A PORT/AIRPORT/LCS TO AN I CD IS IN THE NATURE OF MOVEMENT FROM ONE CUSTOMS STATION TO ANOTHER, GOVER NED BY GOODS IMPORTED (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 CU STOMS AREA OF THE SAME STATION, COVERED BY LOCAL PROCEDURE EVOLVED BY THE COMMISSIO NER OF CUSTOMS AND COVERED BY BONDS, BANK GUARANTEE, ETC. FURTHER, THE PERSON UNDERTAKING THE TRANSSHIPMENT WOULD BE REQUIRED TO FOLLOW THE PRESCRIBED PROCEDUR E. AS RIGHTLY CONTENDED BY THE LEARNED AR OF THE APPEL LANT, 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 AGREEM ENT 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 L ETTER DATED 10/02/2005, WRITTEN TO THE MANAGING DIRECTOR OF THE ASSESSEE CO MPANY 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 T HE 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 DEPART MENT OF COMMERCE, INFRASTRUCTURE DIVISION, MINISTRY OF COMMERCE AND I NDUSTRY APPROVED THE PROPOSAL OF THE ASSESSEE FOR SETTING UP OF CFS AT H ALDIA FOR HANDLING IMPORT/EXPORT OF CARGO SUBJECT TO EXECUTION OF CERT AIN DOCUMENTS AND COMPLIANCE OF OTHER TERMS AND CONDITIONS AS STATED IN THE LETTER. THE ID. COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD LETTE R DT.27-05-2003 FROM THE 10 MINISTRY OF COMMERCE AND INDUSTRY PERMITTING THE AS SESSEE TO SET UP CFS AT RALDIA. THE CONTENTS OF THE LETTER ARE REPRODUCED H EREIN 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. 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 HALDI A FOR HANDLING IMPORT AND EXPORT CARGO. THE APPROVAL IS SUBJECT TO T LE F OLLOWING TERMS AND CONDITIONS:- (A) THE LETTER OF INTENT HOLDER SHALL TAKE ADEQUA TE STEPS TO CREATE PROPER INFRASTRUCTURE KEEPING IN VIEW THE INDICATIV E NORMS GIVEN IN PARTS A& B OF THE GUIDELINES FOR SETTING UP INLAND CONTAI NER 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, WO ULD BE EXECUTED WITH THE CONCERNED COMMISSIONER OF CUSTOMS AND CENT RAL 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 IMPLEMENTAT ION 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/POSSESSI ON OF THE LAND SHALL BE COMPLETED WITHIN 60 DAYS AND INTIMATED TO THE MLO C OMMERCE, FAILING WHICH THE APPROVAL GRANTED WOULD BE AUTOMATICALLY CANCELL ED. 2. THE FACILITY TO BE SET UP SHALL BE FULL COMPUTER IZED, WITH EDI COMPATIBILITY AND A MINIMUM COMPLEMENT OF EQUIPMENT AND ACCESSORI ES AS NECESSARY SHALL BE MADE AVAILABLE AT THE FACILITY. THE INDICA TIVE LIST OF EQUIPMENT/ACCESSORIES CONSIDERED NECESSARY IS ANNEX ED. THE STATUS REGARDING CONFIRMATION OF THE INSTALLATION! AVAILAB ILITY OF THE ITEMS SHALL BE FURNISHED TO THE APPROPRIATE AUTHORITIES TO FACILIT ATE ISSUE OF REQUISITE NOTIFICATION. 3. PLEASE ACKNOWLEDGE RECEIPT OF THIS LETTER. YOURS FAITHFULLY, SD/- (N.G. BISWAS) DIRECTOR' A PERUSAL OF CLAUSE 'B' OF THE ABOVE LETTER SHOWS T HAT THE ASSESSEE WAS REQUIRED TO EXECUTE NECESSARY BOND AND GUARANTEES W ITH THE CONCERNED COMMISSIONER OF CUSTOMS AN CENTRAL EXCISE. IT WAS ONLY ON THE COMPLIANCE OF ALL THE TERMS AND CONDITIONS MENTIONED IN THE AF ORESAID LETTER THAT THE 11 ASSESSEE WAS ALLOWED TO CARRY ON THE SERVICES OF CF S. THE ASSESSEE ON THE COMPLIANCE OF THE TERMS AND CONDITIONS AS MENTIONED IN THE LETTER, WAS NOTIFIED AS CFS COMPLEX FOR THE PURPOSE OF RECEIVIN G, STORING, IMPORT CONTAINERS, RECEIVING/CONSOLIDATING EXPORT CARGO ET C. 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 ASS ESSEE WAS ACCEPTED BY THE GOVERNMENT ON CERTAIN CONDITIONS WHICH WERE DULY CO MPLIED 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 GOV ERNMENT. IN SUCH CIRCUMSTANCES THERE IS NO NEED TO INSIST FOR THE SP ECIFIC 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 EN TERED INTO BUT FROM THE APPROVALS GRANTED TO THE ASSESSEE IT WAS INFERRED T HAT ASSESSEE SHOULD BE DEEMED TO HAVE ENTERED INTO AN AGREEMENT WITH THE S TATE 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. THE IMPUGNED ORDER IS SET ASIDE. THE APPEAL OF THE ASSESSEE IS ALLOWED. 11. RESPECTFULLY FOLLOWING THE COORDINATE BENCH ORD ER, 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 CON TAINER 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, BRID GE, AIRPORT, PORT OR RAIL SYSTEM OR ANY OTHER PUBLIC FACILITY OF A SIMILAR NA TURE 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 DEFINIT ION OF INFRASTRUCTURE FACILITY IN SUB-SECTION (12), CLAUSE (CA), WITH EF FECT FROM APRIL 1, 1999. WHEN THE ENTIRE SECTION WAS RECAST AND EVEN AFTER SEVERA L AMENDMENTS WERE THEREAFTER MADE TO THE SECTION, INLAND PORTS CONTIN UED 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 CON TAINER 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 (A A) 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 DEPOT S FOR THE UNLOADING OF IMPORTED GOODS AND LOADING OF EXPORTED GOODS. THE C ENTRAL BOARD OF EXCISE AND CUSTOMS ISSUED A CLARIFICATION THAT INLAND CONT AINER DEPOTS WERE INLAND PORTS. THE POWER TO NOTIFY INFRASTRUCTURE FACILITIE S FOR THE PURPOSE OF THE SECTION WAS TAKEN AWAY FROM THE CENTRAL BOARD OF DIRECT TAX ES W.E.F. APRIL 1,2002. HOWEVER, THERE WAS NO PROVISION MADE IN THE ACT SAY ING THAT NOTIFICATIONS ISSUED EARLIER WOULD CEASE TO HAVE FROM APRIL 1, 20 02.THE ASSESSEE, A PUBLIC SECTOR UNDERTAKING, WAS ENGAGED IN THE BUSINESS OF HANDLING AND 12 TRANSPORTATION OF CONTAINERISED CARGO. THE ACTIVIT Y OF THE ASSESSEE WAS CARRIED OUT MAINLY ON ITS INLAND CONTAINER DEPORTS, CENTRAL FREIGHT STATIONS SEE HAD A TOTALA OF 45 INLAND CONTAINER DEPOTS. IT CLAIMED S PECIAL DEDUCTION UNDERSECTION 80-IA(4) FOR THE ASSESSMENT YEARS 2003-04 TO 2005-0 6. THE ASSESSING OFFICER DENIED SPECIAL DEDUCTION BUT THE TRIBUNAL ALLOWED I T. ON APPEAL TO THE HIGH COURT: HELD, ALLOWING THE APPEALS, THAT OUT OF THE TOTAL 4 5 INLAND CONTAINER DEPOTS OPERATED BY THE ASSESSEE, EXCEPT TWO ALL OTH ERS WERE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES FOR THE PURPOSE OF SE C. 80IA(12)(CA). HAVING REGARD TO THE PROVISIONS OF THE CUSTOMS ACT, THE CO MMUNICATION 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 W ERE INLAND PORTS UNDER EXPLANATION (D) TO SEC. 80IA(4) REQUIRED TO BE UPHE LD. 13. THE ISSUE HAS ALSO BEEN CLARIFIED BY THE GOVERN MENT VIDE CBEC CIRCULAR NO. 18/2009 DATED 08/06/2009. RESPECTFULLY FOLLOWING T HE ABOVE DECISIONS, WE ALLOW THIS APPEAL OF THE ASSESSEE. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE STAY PETITION IS DISMISSED AS INFRUCTUOUS. PRONOUNCED IN THE OPEN COURT ON 29.04.2015. SD/- SD/- (SAKTIJIT DEY) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH APRIL, 2015. KAVITA, P.S. COPY TO 1 APPELLANT 2 RESPONDENT 3 THE CIT, VISAKHAPATNAM 4 THE CIT(A), VISAKHAPATNAM. 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER ASSISTANT REGISTRAR