M/s. PSA Sical Terminals Limited, CHENNAI V. ACIT, CHENNAI

ITA 1605/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64622 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-11-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 17-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA IRS
• Assessee Lawyers: S SRIDHAR
• Keywords: Reopening of assessment; Depreciation; Tangible material; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 142(1); 80HHC; 147; 148; 12; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NOS.1604 TO 1607(MDS)/2012 ASSESSMENT YEARS : 2004-05, 2005-06, 2006-07 & 2009 -10 M/S.PSA SICAL TERMINALS LTD., 73-ARMENIAN STREET, CHENNAI-600 001. PAN AABCP2897G. VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE V(2), CHENNAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.SRIDHAR, ADVOCATE RESPONDENT BY : DR. S.MOHARANA, IRS, CIT DATE OF HEARING : 20 TH NOVEMBER, 2012 DATE OF PRONOUNCEMENT : 6 TH DECEMBER, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THERE ARE FOUR APPEALS. THE APPEALS ARE FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEARS ARE 2004-0 5, 2005-06, 2006-07 AND 2009-10. 2. THESE APPEALS ARE DIRECTED AGAINST THE ORDERS PASSED BY THE COMMISSIONER OF INCOME-TAX(APPEALS)-V AT CHENNAI, DATED 29-6-2012. THE APPEALS FOR THE ASSE SSMENT - - ITA 1604 TO 1607 OF 2012 2 YEARS 2004-05, 2005-06 AND 2006-07 ARISE OUT OF THE ASSESSMENTS COMPLETED UNDER SECTION 143(3), READ WI TH SECTION 147 OF THE INCOME-TAX ACT, 1961. THE APPEAL FOR TH E ASSESSMENT YEAR 2009-10 ARISES OUT OF THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE ACT. 3. THE ASSESSEE IS AN INDIAN COMPANY, AS DEFINED I N SECTION 2(26) OF THE INCOME-TAX ACT, 1961. THE ASS ESSEE COMPANY IS INCORPORATED IN INDIA. IT WAS INCORPORA TED ON 18-6- 1998. THE EQUITY CAPITAL OF THE COMPANY IS SUBSCRI BED BY ANOTHER THREE COMPANIES BY NAME M/S. PSA CORPORATIO N LTD., M/S. SOUTH INDIA CORPORATION(AGENCIES) LTD. AND M/S . NUR INVESTMENT AND TRADING PVT. LTD. M/S. PSA CORPORAT ION LTD. AND M/S. NUR INVESTMENT AND TRADING PVT. LTD. ARE SINGA PORE BASED COMPANIES. THEY HOLD EQUITY SHARE CAPITAL OF THE A SSESSEE COMPANY AT 57.5% AND 5% RESPECTIVELY. M/S. SOUTH I NDIA CORPORATION(AGENCIES) LTD. IS AN INDIAN COMPANY HOL DING THE REMAINING 37.5% EQUITY IN THE ASSESSEE COMPANY. 4. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF OPERATING CONTAINER TERMINALS IN TUTICORIN PORT. E ARLIER THE TUTICORIN PORT TRUST HAD INVITED BIDS FROM INTEREST ED PARTIES FOR - - ITA 1604 TO 1607 OF 2012 3 ISSUE OF LICENCE TO CONSTRUCT AND OPERATE 7 TH BERTH AT TUTICORIN PORT ON BUILD, OPERATE AND TRANSFER (BOT) SCHEME. IN RESPONSE TO THE INVITATION MADE BY THE TUTICORIN PO RT TRUST, THE ABOVE MENTIONED THREE COMPANIES JOINTLY MADE AN APP LICATION TO THE TUTICORIN PORT TRUST TO CONSIDER THEM FOR THE A WARD OF LICENCE. THE TUTICORIN PORT TRUST, AFTER EXAMINING ALL TECHN ICAL AND FINANCIAL DETAILS AND OTHER ELIGIBILITY CRITERIA, I SSUED A LETTER OF INTENT TO THE CONSORTIUM OF THESE THREE COMPANIES, EXPRESSING ITS INTENT TO AWARD THE LICENCE TO THOSE COMPANIES. IT WAS A CONDITION IN THE AGREEMENT THAT THE LICENCE BE GRAN TED ONLY TO A COMPANY REGISTERED IN INDIA. THEREFORE, THE ABOVE MENTIONED THREE COMPANIES, WHO JOINTLY APPLIED FOR THE AWARD OF LICENCE, PROMOTED AND INCORPORATED THE ASSESSEE COMPANY IN I NDIA ON 18-6-1998. ONCE THE ASSESSEE WAS INCORPORATED AS A N INDIAN COMPANY, THE TUTICORIN PORT TRUST GRANTED THE LICEN CE IN FAVOUR OF THE ASSESSEE COMPANY AND ENTERED INTO A BOT AGREEME NT ON 15-7-1998. THEREAFTER, THE ASSESSEE COMPANY PROCEE DED TO DEVELOP AND THEREAFTER TO OPERATE THE7TH BERTH AT T UTICORIN PORT. 5. THE BOT AGREEMENT IS FOR A PERIOD OF 30 YEARS. THE ASSESSEE COMPANY COMPLETED THE CONSTRUCTION/DEV ELOPMENT - - ITA 1604 TO 1607 OF 2012 4 AND COMMENCED THE CONTAINER HANDLING OPERATIONS FRO M DECEMBER 21, 1999 ONWARDS. 6. THE ACTIVITY OF CONSTRUCTING/DEVELOPING, OPERAT ING AND MAINTAINING THE BERTH IN A PORT AREA FOR CONTAI NER HANDLING OPERATIONS IS RECOGNIZED BY THE INCOME-TAX ACT AS D EVELOPING, OPERATING AND MAINTAINING AN INFRASTRUCTURE FACILIT Y. SUBJECT TO CERTAIN CONDITIONS, ASSESSEES ENGAGED IN DEVELOPING , OPERATING AND MAINTAINING INFRASTRUCTURE FACILITIES ARE ENTIT LED FOR DEDUCTIONS IN RESPECT OF PROFITS AND GAINS FROM SUCH ENTERPRIS ES ENGAGED IN INFRASTRUCTURE DEVELOPMENT. THE DEDUCTION IS HUNDR ED PER CENT, AS PROVIDED IN SECTION 80IA(1) OF THE INCOME-TAX AC T, 1961. THE DEDUCTION IS GRANTED SUBJECT TO CERTAIN CONDITIONS PROVIDED IN SUB-SECTION(4) OF SECTION 80IA. 7. AS THE ASSESSEE COMPANY IS DEVELOPING AND OPERATING PORT FACILITIES, WHICH AMOUNTS TO DEVELOP ING OF INFRASTRUCTURE FACILITIES, THE ASSESSEE CLAIMED DED UCTION IN RESPECT OF ITS PROFITS ARISING OUT OF THE BOT PROJE CT WITH THE TUTICORIN PORT TRUST. THE CLAIM WAS UNDER SECTION 80IA OF THE INCOME-TAX ACT, 1961. THE ASSESSEE HAS COMMENCED I TS BUSINESS OPERATIONS FROM DECEMBER 21, 1999 AND, THE REFORE, THE - - ITA 1604 TO 1607 OF 2012 5 FIRST YEAR OF ASSESSMENT WAS 2000-01. BUT THE ASSES SEE HAS EXERCISED ITS OPTION TO CLAIM THE DEDUCTION UNDER S ECTION 80IA FOR THE FIRST TIME IN THE ASSESSMENT YEAR 2004-05. THE REAFTER THE ASSESSEE CONTINUED TO CLAIM THE DEDUCTION IN THE SU BSEQUENT ASSESSMENT YEARS. 8. IN THE CASE OF ASSESSMENT YEARS 2004-05, 2005-0 6 AND 2007-07, THE ASSESSMENTS WERE ORIGINALLY COMPLE TED UNDER SECTION 143(3) ACCEPTING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. ACCORDINGLY, THE DE DUCTION UNDER SECTION 80IA WAS INITIALLY GRANTED TO THE ASSESSEE COMPANY FOR THE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07. 9. THEREAFTER, THE ASSESSING AUTHORITY ISSUED A NO TICE UNDER SECTION 148 FOR THE ABOVE THREE ASSESSMENT YE ARS, STATING THE REASON THAT INCOME CHARGEABLE TO TAX HAD ESCAPE D ASSESSMENTS, INASMUCH AS THE ASSESSEE WAS GIVEN THE RELIEF UNDER SECTION 80IA, FOR WHICH THE ASSESSEE IS NOT E NTITLED TO. IN REPLY TO THE NOTICES ISSUED UNDER SECTION 148, THE ASSESSEE SUBMITTED ITS EXPLANATION IN DETAIL AND CONTENDED T HAT THE DEDUCTION UNDER SECTION 80IA WAS GRANTED TO THE ASS ESSEE RIGHTLY AND IN ACCORDANCE WITH LAW. BUT, THE ASSES SING OFFICER - - ITA 1604 TO 1607 OF 2012 6 DECLINED TO ACCEPT THE EXPLANATIONS OFFERED BY THE ASSESSEE AND COMPLETED THE INCOME-ESCAPING ASSESSMENTS UNDER SEC TION 147 THROUGH HIS ORDERS DATED 26-12-2011. THE ASSESSING OFFICER HAS WITHDRAWN THE DEDUCTION GIVEN TO THE ASSESSEE UNDER SECTION 80IA OF THE ACT. 10. FOLLOWING THE ABOVE FINDING, THE ASSESSING OFF ICER COMPLETED THE REGULAR ASSESSMENT UNDER SECTION 143( 3) FOR THE ASSESSMENT YEAR 2009-10 ON 30-12-2011. IN THIS REG ULAR ASSESSMENT, THE ASSESSING AUTHORITY HAS DENIED THE ASSESSEE THE BENEFIT OF DEDUCTION UNDER SECTION 80IA OF THE ACT. 11. THE ASSESSEE-COMPANY HAS FILED APPEALS BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS), CHALLENGIN G THE VALIDITY OF REOPENING OF ASSESSMENTS UNDER SECTION 147 FOR THE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07 AND A LSO AGAINST THE DENIAL OF DEDUCTION PROVIDED UNDER SECT ION 80IA FOR THE ABOVE THREE ASSESSMENT YEARS AS WELL AS FOR THE ASSESSMENT YEAR 2009-10. THE COMMISSIONER OF INCOME-TAX(APPEA LS) DISMISSED ALL THE FOUR APPEALS FILED BY THE ASSESSE E. THE COMMISSIONER OF INCOME-TAX(APPEALS) HELD THAT THE A SSESSING AUTHORITY WAS JUSTIFIED IN COMPLETING THE INCOME-ES CAPING - - ITA 1604 TO 1607 OF 2012 7 ASSESSMENTS UNDER SECTION 147 FOR THE THREE ASSESSM ENTYEARS 2004-05, 2005-06 AND 2006-07. HE ALSO UPHELD THE F INDING OF THE ASSESSING AUTHORITY THAT THE ASSESSEE COMPANY I S NOT ENTITLED FOR THE DEDUCTION PROVIDED UNDER SECTION 8 0IA FOR THE IMPUGNED FOUR ASSESSMENT YEARS, IN RESPECT OF THE P ROFITS AND GAINS ARISING FROM THE BOT PROJECT EXECUTED BY THE ASSESSEE AT TUTICORIN PORT. 12. THE ASSESSEE IS AGGRIEVED AND, THEREFORE, THES E SECOND APPEALS BEFORE US. 13. AS FAR AS THE FIRST THREE ASSESSMENT YEARS 200 4-05, 2005-06 AND 2006-07 ARE CONCERNED, THERE ARE TWO IS SUES RAISED BY THE ASSESSEE COMPANY THROUGH THE GROUNDS RAISED IN ITS APPEALS. THE FIRST ISSUE RELATES TO THE VALIDITY O F REOPENING OF THE ASSESSMENTS UNDER SECTION 147. THE SECOND ISSUE IS REGARDING THE ELIGIBILITY OF THE ASSESSEE COMPANY TO CLAIM TH E DEDUCTION AVAILABLE UNDER SECTION 80IA. AS THE ASSESSMENT FO R THE ASSESSMENT YEAR 2009-10 IS A REGULAR ASSESSMENT, TH ERE IS NO QUESTION OF CHALLENGING THE REOPENING OF ASSESSMENT UNDER SECTION 147. THE ONLY ISSUE RAISED FOR THE SAID AS SESSMENT YEAR 2009-10 IS THE ELIGIBILITY OF THE ASSESSEE COMPANY TO CLAIM THE - - ITA 1604 TO 1607 OF 2012 8 DEDUCTION UNDER SECTION 80IA OF THE ACT. THE ISSUE ON MERIT REGARDING THE ELIGIBILITY OF THE ASSESSEE COMPANY T O CLAIM THE DEDUCTION UNDER SECTION 80IA IS THUS COMMON FOR ALL THE FOUR IMPUGNED ASSESSMENT YEARS, WHEREAS THE ISSUE REGARD ING THE VALIDITY OF REOPENING OF ASSESSMENTS UNDER SECTION 147 IS RAISED ONLY IN RESPECT OF THE THREE ASSESSMENT YEARS 2004- 05, 2005-06 AND 2006-07. 14. FIRST WE WILL CONSIDER THE COMMON GROUND OF REOPENING OF THE ASSESSMENTS RELEVANT TO THE FIRST THREE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07. THE MAIN GROUND RAISED BY THE ASSESSEE IS THAT THE ORIGINAL ASSESSMENTS WERE COMPLETED UNDER SECTION 143(3) AND THERE WAS N O FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS AND THE ASSESSMENTS WERE REOPENED AFTER A PER IOD OF FOUR YEARS AND IN SUCH CIRCUMSTANCES THE REOPENING OF TH E ASSESSMENTS UNDER SECTION 147 IS BAD IN LAW. IT IS ALSO THE GROUND OF THE ASSESSEE THAT THE CLAIM UNDER SECTION 80IA MADE BY THE ASSESSEE IN ITS RETURNS WAS FULLY EXPLAINED AND FURTHER THE CLAIM WAS SUPPORTED BY THE AUDIT REPORT FURNISHED I N FORM 10CCB. - - ITA 1604 TO 1607 OF 2012 9 15. SHRI S.SRIDHAR, THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE, RELIED ON THE DECISION OF THE HONBLE SUPREME COURT RENDERED IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 AND ARGUED THAT IT IS NECESSARY ON THE PART OF THE ASSESSING OFFICER TO HAVE A REASONABLE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT AND THE REASON SHOULD BE SUPPORT ED BY TANGIBLE MATERIALS AND THE REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF BELIEF, SO AS TO REOPEN AN ASSESSMENT UNDER SECTION 147 OF THE ACT. IT IS ALSO NECESSARY THAT THERE SH OULD BE FAILURE ON THE PART OF THE ASSESSEE. THIS IS BECAUSE THE R EASSESSMENTS IN THESE CASES HAVE BEEN MADE AFTER A PERIOD OF FOU R YEARS. THE LEARNED COUNSEL SUBMITTED THAT NONE OF THE ABOVE CO NDITIONS, HIGHLIGHTED BY THE HONBLE SUPREME COURT, HAS BEEN SATISFIED IN THE PRESENT CASE. THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE THE NECESSARY DETAILS FULLY AND TRULY. NO FRESH MATERIALS HAVE COME FOR THE CONSIDERATION OF THE AS SESSING AUTHORITY. HE HAS ARRIVED AT THE BELIEF THAT INCOM E HAS ESCAPED ASSESSMENTS ON THE VERY SAME MATERIALS WHICH WERE EXHAUSTIVELY EXAMINED IN THE COURSE OF THE REGULAR ASSESSMENTS COMPLETED UNDER SECTION 143(3). HE, THEREFORE, SUB MITTED THAT - - ITA 1604 TO 1607 OF 2012 10 THE INCOME-ESCAPING ASSESSMENTS COMPLETED FOR THE F IRST THREE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07 MAY B E DECLARED AS BAD IN LAW. 16. DR. S.MOHARANA, THE LEARNED COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVENUE, ON THE OTHER HAND, RELIED ON THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF PANNALAL MAHESH CHANDRA JEWELLERS VS. D CIT, 188 TAXMAN 95, WHERE THE HONBLE COURT HAS UPHELD THE R EOPENING OF THE ASSESSMENT MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE REASONS RELIED ON BY HIM TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT AND THE REASON BEING EXCESSIVE DEDUCTION GRANTED UNDER SECTION 80HHC OF THE ACT. IN THAT CASE THE C OURT HAS HELD THAT THERE IS NO ILLEGALITY IN THE INITIATION OF RE ASSESSMENT PROCEEDINGS BY INVOKING SECTIONS 147 AND 148 OF THE ACT. THE LEARNED COMMISSIONER OF INCOME-TAX EXPLAINED THAT, SIMILARLY, IN THE PRESENT CASE ALSO THE ASSESSING OFFICER HAS GRA NTED THE DEDUCTION AVAILABLE UNDER SECTION 80IA(4) OF THE AC T, FOR WHICH THE ASSESSEE IS NOT ENTITLED AND, THEREFORE, THE RE ASSESSMENTS NEED TO BE JUSTIFIED AS THEY WERE MADE FOR MAKING A LEGITIMATE WITHDRAWAL OF THE DEDUCTION ALREADY GRANTED TO THE ASSESSEE. - - ITA 1604 TO 1607 OF 2012 11 THE LEARNED COMMISSIONER OF INCOME-TAX AGAIN RELIED ON ANOTHER JUDGMENT OF THE HONBLE ALLAHABAD HIGH COUR T RENDERED IN THE CASE OF SHYAM BANSAL VS. ACIT, 296 ITR 25, W HERE THE HONBLE COURT HELD THAT THE CONTENTION THAT THE PET ITIONER HAD MADE DISCLOSURE OF INCOME FROM THE SALE OF SHARES I N THE ASSESSMENT PROCEEDINGS IS OF LITTLE CONSEQUENCE, AS THE ASSESSING OFFICER FAILED TO EXAMINE THE SAME AND SO ALSO SUFFICIENCY OF MATERIAL TO FORM REASON TO BELIEVE C ANNOT BE SUBJECT MATTER OF WRIT JURISDICTION. THE LEARNED C OMMISSIONER POINTED OUT THAT IN THE PRESENT CASE ALSO THE ISSUE IS GRANTING OF RELIEF TO THE ASSESSEE FOR WHICH IT IS NOT ENTITLED . HE ALSO RELIED ON THE JUDGMENT OF THE HONBLE PUNJAB AND HARYANA H IGH COURT RENDERED IN THE CASE OF CIT VS. HINDUSTAN TOOLS & F ORGINGS (P) LTD., 306 ITR 209, IN WHICH CASE THE HONBLE COURT HAS UPHELD THE REASSESSMENT UNDER SECTION 147 TO WITHDRAW THE EXCESSIVE RELIEF GRANTED TO THE ASSESSEE UNDER SECTION 80HHC IN THE COURSE OF REGULAR ASSESSMENT. 17. WE HEARD BOTH SIDES IN DETAIL AND CONSIDERED T HE JURISDICTIONAL QUESTION WHETHER THE REOPENING OF AS SESSMENTS - - ITA 1604 TO 1607 OF 2012 12 UNDER SECTION 147 IS JUSTIFIED IN THESE CASES RELAT ING TO THE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07. 18. SECTION 147 OF THE INCOME-TAX ACT, 1961 DEALS WITH THE TOPIC OF INCOME-ESCAPING ASSESSMENTS. THE LAW STATES THAT IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER I NCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF T HE PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTE THE LO SS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS T HE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED. BUT THE ABO VE LAW RELATING TO REOPENING OF ASSESSMENT IS SUBJECT TO A PROVISION THAT WHERE AN ASSESSMENT UNDER SUB-SECTION(3) OF SECTION 143 OR UNDER SECTION 147 HAS BEEN MADE FOR THE CONCERNED A SSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER SECTION 147 AF TER THE EXPIRY OF FOUR YEARS FROM THE END OF THE CONCERNED ASSESSM ENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASS ESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE O N THE PART OF - - ITA 1604 TO 1607 OF 2012 13 THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION(1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FAC TS NECESSARY FOR MAKING THE ASSESSMENTS. 19. THE LAW STATED ABOVE STIPULATES CERTAIN CONDIT IONS TO BE SATISFIED FOR REOPENING AN ASSESSMENT UNDER S ECTION 147. THE FIRST CONDITION IS THAT THE ASSESSING OFFICER H AS A REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT. THE SECOND CONDITION IS THAT IF THE RE OPENING OF ASSESSMENT IS MADE UNDER SECTION 147 AFTER A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, IT IS NECESSARY TO SHOW THAT THERE WAS FAILURE ON THE PAR T OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR THE ASSESSMENT OR IT SHOULD HAVE BEEN A CASE WH ERE THE ASSESSEE HAD FAILED TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE UNDER SECTION 142(1) OR UNDER SECTION 148 OF THE ACT. 20. IN THE PRESENT CASE, THE ASSESSEE HAS FILED RE TURNS OF INCOME VOLUNTARILY WITHIN THE TIME ALLOWED UNDER SECTION 139. IT HAS COMPLIED WITH THE NOTICES ISSUED UNDER SECTI ON 143(2). - - ITA 1604 TO 1607 OF 2012 14 THE ASSESSMENTS HAVE BEEN COMPLETED UNDER SECTION 1 43(3). IT MEANS THAT THE ASSESSMENTS WERE COMPLETED AFTER MAK ING DUE ENQUIRIES, AS REQUIRED BY LAW. THE ASSESSEE HAS FU RNISHED ALL THE NECESSARY DETAILS IN SUPPORT OF ITS CLAIM TOWAR DS THE DEDUCTION AVAILABLE UNDER SECTION 80IA(4) OF THE AC T. THE PARTICULARS ARE FURTHER CERTIFIED, AS REQUIRED BY T HE STATUTE, THROUGH AN AUDIT REPORT FURNISHED IN FORM 10CCB. T HE REASON STATED BY THE ASSESSING OFFICER IN THE REASSESSMENT ORDERS IS THAT AFTER THE SCRUTINY ASSESSMENTS COMPLETED UNDER SECTION 143(3), IT WAS NOTICED THAT EVEN THOUGH THE ASSESSE E WAS NOT ELIGIBLE TO CLAIM THE DEDUCTION UNDER SECTION 80IA( 4), IT HAS BEEN ALLOWED IN THE SCRUTINY ASSESSMENT ORDERS AND THERE FORE IT IS BELIEVED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 21. THE ASSESSING OFFICER HIMSELF IS UNCERTAIN WHE THER INCOME HAS ESCAPED ASSESSMENT OR NOT, WHICH IS EVID ENT FROM THE EXPRESSION THAT IT IS BELIEVED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE ASSESSING AUTHORITY H AS NO CASE THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY - - ITA 1604 TO 1607 OF 2012 15 AND TRULY ALL MATERIAL FACTS NECESSARY TO EXAMINE T HE CLAIM OF DEDUCTION MADE UNDER SECTION 80IA(4). 22. IN THESE CIRCUMSTANCES WE FIND THAT THE BELIEF OF ESCAPEMENT OF INCOME RELIED ON BY THE ASSESSING OFF ICER IS NOT SUPPORTED BY ANY TANGIBLE MATERIAL. THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY AL L MATERIAL FACTS NECESSARY TO EXAMINE ITS CLAIM OF DEDUCTION UNDER S ECTION 80IA(4). NO FRESH MATERIALS WERE AVAILABLE TO THE ASSESSING AUTHORITY TO REOPEN THE ASSESSMENTS UNDER SECTION 1 47. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THA T THE CASE OF THE ASSESSEE IS SUPPORTED BY THE DECISION OF THE HO NBLE SUPREME COURT RENDERED IN THE CASE OF CIT VS. KELVI NATOR OF INDIA LTD., 320 ITR 561. WE FEEL THAT THE REASON S TATED TO BE RELIED ON BY THE ASSESSING OFFICER TO COME TO THE B ELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT IS NOTHING BUT A CHANGE OF OPINION. 23. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE HOLD THAT THE INCOME ESCAPING ASSESSMENTS COMPLETED UNDE R SECTION 147 FOR THE THREE ASSESSMENT YEARS 2004-05, 2005-06 AND - - ITA 1604 TO 1607 OF 2012 16 2006-07 ARE BAD IN LAW AND THEREFORE THOSE ASSESSME NTS ARE LIABLE TO BE SET ASIDE. 24. THE FIRST ISSUE REGARDING THE JURISDICTION FOR REOPENING THE ASSESSMENTS UNDER SECTION 147 RAISED FOR THE THREE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07 IS DECIDED IN FAVOUR OF THE ASSESSEE AND THOSE GROUNDS ARE ACCORDINGLY ALLOWED. 25. NEXT WE WILL CONSIDER THE ISSUE RAISED BY THE ASSESSEE FOR ALL THE FOUR ASSESSMENT YEARS UNDER AP PEAL AS TO WHETHER THE ASSESSEE IS ENTITLED FOR DEDUCTION IN R ESPECT OF PROFITS AND GAINS FROM THE BOT PROJECT EXECUTED AT TUTICORIN PORT, UNDER SECTION 80IA(4) OF THE INCOME-TAX ACT, 1961. 26. INITIALLY THE REASONS POINTED OUT BY THE ASSES SING AUTHORITY TO DENY THE EXEMPTION UNDER SECTION 80IA( 4) WERE TWO- FOLD: (I) THE SHAREHOLDERS OF THE ASSESSEE-COMPANY ARE M/S. PSA CORPORATION LTD., M/S. NUR INVESTMENT AND TRADING PVT. LTD. AND M/S. SOUTH INDIA CORPORATION(AGENCIES) LTD. THE FIRST TWO COMPANIES ARE SINGAPORE BASED COMPANIES, WHO HELD MAJOR - - ITA 1604 TO 1607 OF 2012 17 SHARES IN THE ASSESSEE-COMPANY. ONLY THE THIRD COMPANY IS THE INDIAN COMPANY. THEREFORE, THE ASSESSEE CANNOT BE CONSIDERED AS A CONSORTIUM OF INDIAN COMPANIES. ACCORDINGLY, THE ASSESSEE DOES NOT SATISFY THE REQUIREMENT OF LAW PRESCRIBED IN SECTION 80IA(4)(I)(A). THE SAID REQUIREMENT PRESCRIBES THAT THE ELIGIBLE UNDERTAKING OR ENTERPR ISE IS OWNED BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM OF SUCH COMPANIES OR BY AN AUTHORITY OR A BOARD OR A CORPORATION OR ANY OTHER BODY ESTABLISHED OR CONSTITUTED UNDER ANY CENTRAL OR STATE ACT. (II) AS PER THE BOT AGREEMENT ENTERED INTO BETWEEN THE ASSESSEE COMPANY AND THE TUTICORIN PORT TRUST, THE ASSESSEE HAD TO PROVIDE VARIOUS INFRASTRUCTURE FACILITIES LIKE BERTH, DRAFT, CONTAINER YARD, REEFE R POINTS, EQUIPMENT, COMPUTER SYSTEM AND FULL RANGE OF CONTAINER FREIGHT STATION SERVICES(CFS) AT TUTICORIN PORT. BUT THE BERTH CONSTRUCTION WAS MAD E BY THE TUTICORIN PORT TRUST ITSELF ALONGWITH - - ITA 1604 TO 1607 OF 2012 18 UNDERTAKING THE WORK OF DRAFT. REGARDING EQUIPMENTS, THE ASSESSEE HAS PROCURED ALL OF THEM ON LEASE AND NO INVESTMENTS WERE MADE BY THE ASSESSEE COMPANY FOR ACQUIRING THOSE EQUIPMENTS, CRANES, ETC. THE ASSESSEE IS COLLECTING WHARFAGE CHARGES, CONTAINER HANDLING CHARGES, OUT OF WHICH LEASE CHARGES, ETC. ARE PAID TO TUTICORIN PORT TRUS T AND THE ACTIVITIES ARE BEING CARRIED OUT WITHOUT AN Y CORRESPONDING INVESTMENT. 27. WHEN THESE REASONS WERE PUT TO THE ASSESSEE COMPANY, EXPLANATIONS WERE OFFERED BY THE ASSESSEE TO SUBSTANTIATE ITS CLAIM FOR DEDUCTION UNDER SECTION 80IA(4) IN THE FOLLOWING MANNER: (I) THE ASSESSEE IS A COMPANY REGISTERED IN INDIA. IT IS AN INDIAN COMPANY. THE ASSESSEE COMPANY WAS REGISTERED ON 18-6-1998. THE ASSESSEE COMPANY IS THE OWNER OF THE ENTERPRISE CARRYING ON INFRASTRUCT URE DEVELOPMENT ACTIVITIES AT TUTICORIN PORT. ACCORDINGLY, THE ENTERPRISE IS OWNED BY A COMPANY REGISTERED IN INDIA AND, THEREFORE, SATISFIED THE - - ITA 1604 TO 1607 OF 2012 19 CONDITION LAID DOWN IN SECTION 80IA(4)(I)(A) OF THE ACT. THE ENTERPRISE IS OWNED BY THE ASSESSEE COMPANY AND NOT BY A CONSORTIUM OF FOREIGN COMPANIES. (II) TUTICORIN PORT TRUST HAD INVITED APPLICATIONS FROM INTERESTED PARTIES FOR AWARD OF LICENCE TO DEVELOP, OPERATE AND TRANSFER 7 TH BERTH AT TUTICORIN PORT ON BUILD, OPERATE AND TRANSFER (BOT) SCHEME. THE OPERATIONAL PERIOD IS THIRTY YEARS, AFTER WHICH THE 7 TH BERTH WILL BE FULLY TRANSFERRED TO THE TUTICORIN PO RT TRUST. (III) THE THREE COMPANIES, NAMELY, M/S. PSA CORPORATION LTD., M/S. NUT INVESTMENT AND TRADING PVT. LTD AND M/S. SOUTH INDIA CORPORATION (AGENCIES) LTD. FORMED INTO A CONSORTIUM AND APPLIED FOR THE AWARD OF LICENCE. THE FIRST TWO COMPANIES ARE SINGAPORE/FOREIGN COMPANIES AND THE THIRD ONE IS INDIAN COMPANY. TUTICORIN PORT TR UST ACCEPTED THE BID OFFERED BY THE CONSORTIUM. THE CONSORTIUM WAS FORMED ONLY FOR THE PURPOSE OF - - ITA 1604 TO 1607 OF 2012 20 PARTICIPATING IN THE BID AND NOT FOR MOVING FURTHER ANY MORE. (IV) ONCE THE BID OFFERED BY THE CONSORTIUM WAS ACCEPTED BY THE TUTICORIN PORT TRUST AND THE LETTER OF INTENT FOR AWARD OF LICENCE WAS ISSUED BY THE TUTICORIN PORT TRUST, THE CONSORTIUM COMPANIES INCORPORATED A COMPANY IN INDIA BY NAME M/S. PSA SICAL TERMINALS LTD., THAT IS, THE ASSESSEE COMPANY . THE COMPANY WAS INCORPORATED ON 18-6-1998. THE INDIAN COMPANY WAS INCORPORATED, AS THE LICENCE HAD TO BE ISSUED TO AN INDIAN COMPANY AND ALSO THE BENEFIT OF DEDUCTION UNDER SECTION 80IA(4) HAS TO B E CLAIMED. (V) ON INCORPORATION IN INDIA ON 18-6-1998, THE ASSESSEE COMPANY ENTERED INTO THE BOT AGREEMENT WITH THE TUTICORIN PORT TRUST ON 15-7-1998 AND THE TUTICORIN PORT TRUST GRANTED THE LICENCE TO THE ASSESSEE COMPANY. THEREAFTER, THE ASSESSEE COMPANY APPLIED TO THE CENTRAL BOARD OF DIRECT TAXES FOR APPROVAL UNDER SECTION 10(23G), SO AS TO - - ITA 1604 TO 1607 OF 2012 21 CLAIM EXEMPTION OF INCOME FROM THE BUSINESS OF INFRASTRUCTURE DEVELOPMENT. THE ASSESSEE COMPANY HAVING SATISFIED THE NECESSARY CONDITIONS, APPROVAL WAS GRANTED BY THE CENTRAL BOARD OF DIRECT TAXES FOR THE PURPOSE OF EXEMPTION UNDER SECTION 10(23G) OF THE ACT. (VI) IT IS NOT CORRECT TO SAY THAT THE ASSESSEE COMPANY HAS NOT MADE INVESTMENTS FOR THE BOT PROJECT. IN TERMS OF THE AGREEMENT, THE ASSESSEE HAS DEVELOPED THE 7 TH BERTH AT TUTICORIN PORT. THE ASSESSEE HAS PROVIDED INFRASTRUCTURE ASSETS SUCH AS QUAY SIDE CRANES, GANTRY CRANES, TERMINAL OPERATING SYSTEM AND ADMINISTRATIVE BLOCKS. THE TOTAL COST OF INVESTMENTS IN FIXED ASSETS ACCOUNTED FOR ` 88,56,552/- AS ON 1-4-2003. THE INVESTMENT MADE IN OTHER ASSETS ACCOUNTED FOR ` 37,13,37,665/- BY MARCH 31, 2007. (VII) THE ASSESSEE HAS ALSO MADE INVESTMENTS IN TERMINAL TRACTORS, CONTAINER HANDLING EQUIPMENT, ET C. BECAUSE OF THESE INVESTMENTS, THE EARLIER CAPACITY - - ITA 1604 TO 1607 OF 2012 22 OF LICENCE AT 3,00,000 TEU HAS BEEN INCREASED TO 4,50,000 TEU. FIVE OF THE EXISTING YARD BLOCKS HAV E BEEN DEVELOPED TO FULLY UTILISE 10 HA OF LICENSED PREMISES WITH WHARF SPACE, TERMINAL BUILDING AND TECHNICAL WORKSHOP. THE GROUND SLOTS WERE INCREASED FROM 900 TO 1800. NEW LIGHTING MASTS HAVE BEEN PROVIDED. ONE EXISTING MAST HAS BEEN MODIFIED. DEVELOPMENTS ARE STILL GOING ON. 28. AFTER CONSIDERING THE REPLY FILED BY THE ASSES SEE COMPANY, IT SEEMS THAT THE ASSESSING AUTHORITY HAS NOT FURTHER PURSUED HIS OBJECTION THAT THE ASSESSEE HAD NOT MAD E ANY INVESTMENT IN ITS BOT PROJECT AT TUTICORIN PORT. H E HAS NOT EXPLICITLY STATED SO, BUT THE SAID OBJECTION HAS NO T BEEN PURSUED BY THE ASSESSING AUTHORITY. ON THE OTHER HAND, THE ASSESSING AUTHORITY REITERATED THE OTHER OBJECTION THAT THE E NTERPRISE IS NOT OWNED BY A COMPANY REGISTERED IN INDIA. THE ASSESS ING AUTHORITY OBSERVED THAT THE ASSESSEE COMPANY IS FOR MED BY A CONSORTIUM OF TWO SINGAPORE-BASED COMPANIES AND ONE INDIAN COMPANY AND THEY ARE THE SHAREHOLDERS OF THE ASSESS EE COMPANY. THE SINGAPORE-BASED COMPANIES M/S. PSA - - ITA 1604 TO 1607 OF 2012 23 CORPORATION LTD. AND M/S. NUR INVESTMENT AND TRADIN G PVT. LTD. HOLD 57.5% AND 5% SHARES RESPECTIVELY IN THE ASSESS EE COMPANY. THE BALANCE OF 37.5% SHARES ONLY IS HELD BY THE INDIAN COMPANY M/S. SOUTH INDIA CORPORATION(AGENCIE S) LTD. THEREFORE, IT IS NOT A CONSORTIUM OF COMPANIES REGI STERED IN INDIA. 29. THE ASSESSING OFFICER CONCLUDED THAT THE ENTER PRISE IS OWNED BY A CONSORTIUM OF COMPANIES, NOT ALL OF T HEM REGISTERED IN INDIA, AND, THEREFORE, THE ASSESSEE I S NOT ENTITLED FOR THE DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. 30. FINALLY THE ASSESSING OFFICER WITHDREW THE DED UCTION EARLIER GIVEN UNDER SECTION 80IA(4) IN RESPECT OF T HE THREE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07 AND D ENIED THE DEDUCTION FOR THE ASSESSMENT YEAR 2009-10 IN TH E COURSE OF REGULAR ASSESSMENT. 31. IN FIRST APPEALS, THE ASSESSEE RAISED BOTH THE ISSUES OF REOPENING AS WELL AS THE ELIGIBILITY FOR DEDUCTI ON UNDER SECTION 80IA(4). THE COMMISSIONER OF INCOME-TAX(APPEALS) CO NSIDERED THE FACTS OF THE CASE, THE EXPLANATIONS OFFERED BY THE ASSESSEE AND THE MATERIALS PLACED BEFORE HIM AND THE RELEVAN T STATUTORY PROVISIONS. HE CAME TO THE CONCLUSION THAT THE ASS ESSEE HAS NOT - - ITA 1604 TO 1607 OF 2012 24 SATISFIED THE CONDITION LAID DOWN IN SECTION 80IA(4 )(I)(A) FOR THE REASON THAT THE BOT ENTERPRISE AT TUTICORIN PORT OP ERATED BY THE ASSESSEE IS OWNED BY A CONSORTIUM OF THREE COMPANIE S, NOT ALL THE COMPANIES REGISTERED IN INDIA. ACCORDINGLY, HE HELD THAT THE ASSESSEE IS NOT ENTITLED FOR THE BENEFIT OF DEDUCTI ON PROVIDED UNDER SECTION 80IA(4) OF THE ACT. THE COMMISSIONER OF INCOME- TAX(APPEALS) ALSO UPHELD THE REOPENING OF ASSESSMEN TS ON THE GROUND THAT THE ASSESSEE HAD NOT FURNISHED ALL THE NECESSARY DETAILS TO THE ASSESSING OFFICER AT THE TIME OF THE ORIGINAL ASSESSMENTS MADE UNDER SECTION 143(3) OF THE INCOME -TAX ACT, 1961. THE APPEALS WERE ACCORDINGLY DISMISSED ON BO TH GROUNDS. 32. THE ASSESSEE COMPANY HAS RAISED ITS GROUNDS ON THE VERY SAME ISSUES AGITATED BEFORE THE COMMISSION ER OF INCOME-TAX(APPEALS), THAT RELATING TO REOPENING OF ASSESSMENTS AND DENIAL OF DEDUCTION UNDER SECTION 80IA(4) OF TH E ACT. 33. ON THE ISSUE OF DENIAL OF DEDUCTION UNDER SECT ION 80IA, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 1. THE COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE APPRECIATED THAT THE ASSESSEE HAS BUILT AND - - ITA 1604 TO 1607 OF 2012 25 IS OPERATING A PORT INFRASTRUCTURE FACILITY AND THA T THE ASSESSEE HAS COMPLIED WITH ALL THE CONDITIONS UNDER SECTION 80IA. 2. THE ASSESSEE IS A COMPANY INCORPORATED IN INDIA UNDER THE COMPANIES ACT, 1956. 3. THE LICENCE AGREEMENT FOR BOT OF THE PROJECT WAS SIGNED BY THE ASSESSEE COMPANY WITH THE TUTICORIN PORT TRUST. 4. ACCORDING TO SECTION 80IA(4)(I)(A), THE COMPANY/ENTERPRISE CARRYING ON THE BUSINESS OF DEVELOPING, OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY SHOULD BE A COMPANY REGISTERED IN INDIA AND THIS CONDITION IS FULLY SAT ISFIED BY THE ASSESSEE TOBE ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IA. 34. IN ORDER TO CONSIDER THE QUESTION OF ELIGIBILI TY OF THE ASSESSEE COMPANY TO CLAIM DEDUCTION UNDER SECTION 8 0IA(4), IT IS NECESSARY TO EXTRACT THE RELEVANT PROVISIONS OF LAW , EDITED FOR OUR LIMITED PURPOSE , AS UNDER: - - ITA 1604 TO 1607 OF 2012 26 DEDUCTIONS IN RESPECT OF PROFITS AND GAINS FROM INDUSTRIAL UNDERTAKINGS OR ENTERPRISES ENGAGED IN INFRASTRUCTURE DEVELOPMENT, ETC. 80-IA(1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INCLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN ENTERPRISE FROM ANY BUSINESS REFERRED TO IN SUB-SECTION(4) (SUCH BUSINESS BEING HEREINAFTER REFERRED TO AS THE ELIGIBLE BUSINESS), THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTIN G THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION OF AN AMOUNT EQUAL TO HUNDRED PER CENT OF THE PROFITS AND GAINS DERIVED FROM SUCH BUSINESS FOR TEN CONSECUTIVE ASSESSMENT YEARS. . (4) THIS SECTION APPLIES TO- (I) ANY ENTERPRISE CARRYING ON THE BUSINESS OF DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILITY WHICH FULFILS ALL THE FOLLO WING CONDITIONS, NAMELY:- - - ITA 1604 TO 1607 OF 2012 27 (A) IT IS OWNED BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM OF SUCH COMPANIES OR BY AN AUTHORITY OR A BOARD OR A CORPORATION OR ANY OTHER BODY ESTABLISHED OR CONSTITUTED UNDER ANY CENTRAL O R STATE ACT; (B) IT HAS ENTERED INTO AN AGREEMENT WITH THE CENTR AL GOVERNMENT OR A STATE GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR DEVELOPIN G, OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY; (C) IT HAS STARTED OR STARTS OPERATING AND MAINTAIN ING THE INFRASTRUCTURE FACILITY ON OR AFTER THE 1 ST DAY OF APRIL, 1995. . . EXPLANATION.- FOR THE PURPOSES OF THIS CLAUSE, INFRASTRUCTURE FACILITY MEANS- .. . (D) A PORT, AIRPORT, INLAND WATERWAY, INLAND PORT O R NAVIGATIONAL CHANNEL IN THE SEA. - - ITA 1604 TO 1607 OF 2012 28 35. THE UNDERTAKING/PROJECT OF CONSTRUCTING INFRASTRUCTURE FACILITY IN THE NATURE OF 7 TH BERTH AT TUTICORIN PORT IS OWNED BY THE ASSESSEE. THE ASSESSEE ITSELF IS THE ENTERPRISE MENTIONED IN SECTION 80IA(4)(I)(A) OF THE ACT. THE ENTERPRISE IS OWNED BY A COMPANY REGISTERED IN INDIA, AS THE ASSE SSEE COMPANY IS INCORPORATED IN INDIA. THE LAW PROVIDES THAT THE ENTERPRISE IS OWNED BY A COMPANY REGISTERED IN INDI A OR BY A CONSORTIUM OF SUCH COMPANIES. THEREFORE, IT IS NEC ESSARY THAT THE ENTERPRISE IS EITHER OWNED BY A SINGLE COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM OF COMPANIES REGISTERED IN INDIA. IN THE PRESENT CASE, THE ENTERPRISE OF BOT PROJECT AT TUTI CORIN PORT IS OWNED BY THE ASSESSEE, WHICH A COMPANY INCORPORATED IN INDIA. THEREFORE, IT IS SEEN THAT THE ASSESSEE HAS SATISFI ED THE CONDITION LAID DOWN IN SUB-CLAUSE(A) OF CLAUSE(I) OF SUB-SECT ION(4) OF SECTION 80IA OF THE ACT. IT IS NOT POSSIBLE TO HOL D THAT THE BOT PROJECT DEVELOPED BY THE ASSESSEE COMPANY AT TUTICO RIN PORT IS OWNED BY A CONSORTIUM OF COMPANIES CONSISTING OF TW O SINGAPORE COMPANIES AND ONE INDIAN COMPANY. THOSE THREE COMPANIES ARE ONLY SHAREHOLDERS OF THE ASSESSEE-COM PANY. WE SHOULD SEE THAT THE SHAREHOLDERS ARE DIFFERENT FROM THE COMPANY - - ITA 1604 TO 1607 OF 2012 29 IN WHICH THEY ARE HOLDING THE SHARES. THE BOT ENTE RPRISE AT TUTICORIN PORT, WHICH IS OWNED BY THE ASSESSEE COMP ANY, CANNOT BE CONSTRUED AS HELD BY THE SHAREHOLDERS OF THE ASS ESSEE COMPANY. WHEN A COMPANY HOLDS AN ASSET, THE SAID A SSET IS OWNED BY THE COMPANY BY ITSELF AND THERE IS NO LEGA L PRESUMPTION THAT IT IS OWNED BY THE SHAREHOLDERS OF THAT COMPANY. THE CORPORATE STATUS OF A COMPANY IS DIST INCT AND DIFFERENT FROM THE SHAREHOLDERS CONSTITUTING THE CO MPANY. THEREFORE IT IS NOT POSSIBLE TO HOLD THAT THE PROPE RTY OF A COMPANY IS THE PROPERTY OF THE SHAREHOLDERS OF THAT COMPANY. THEREFORE, IN THE PRESENT CASE, IT IS NOT POSSIBLE IN LAW TO HOLD THAT THE THREE SHAREHOLDER COMPANIES ARE OWNING THE BOT PROJECT OPERATED BY THE ASSESSEE COMPANY AT TUTICOR IN PORT. 36. SECTION 80IA DOES NOT IGNORE THE CORPORATE JUR IDICAL PERSONALITY OF A COMPANY REGISTERED UNDER THE COMPA NIES ACT, 1956. THE ASSESSEE COMPANY AND THE OTHER THREE COM PANIES ARE IN FACT FOUR DIFFERENT COMPANIES. ALL THOSE FO UR COMPANIES CANNOT BE TREATED AS ONE ENTITY FOR THE PURPOSE OF SECTION 80IA(4)(I)(A). - - ITA 1604 TO 1607 OF 2012 30 37. THE ASSESSEE IS A COMPANY REGISTERED IN INDIA AND IS DIFFERENT FROM THE THREE COMPANIES OF THE EARLIE R CONSORTIUM. THE ASSESSEE COMPANY WAS INCORPORATED IN INDIA ON 1 8-6-1998. THE LICENCE WAS AWARDED BY TUTICORIN PORT TRUST ONL Y THEREAFTER, I.E. ON 15-7-1998. THE LICENCE WAS AWARDED TO THE ASSESSEE COMPANY IN ITS OWN CORPORATE STATUS AND NOT IN THE STATUS OF A PROGENY OF THE THREE COMPANIES EARLIER SUBMITTED TH E BID FOR THE CONSIDERATION OF TUTICORIN PORT TRUST. THE BOT AGR EEMENT WAS EXECUTED BETWEEN THE ASSESSEE COMPANY AND THE TUTIC ORIN PORT TRUST. THE PRIVITY OF BOT CONTRACT EXISTS BETWEEN THE ASSESSEE COMPANY AND THE TUTICORIN PORT TRUST. THERE IS NO SUCH PRIVITY BETWEEN THE THREE COMPANIES AND THETUTICORIN PORT T RUST. THEREFORE, THERE IS NO REASON TO IGNORE THE ASSESSE E COMPANY AND ADOPT AN OUTDATED CONSORTIUM OF THREE COMPANIES TO IMPRESS THEREON, THE OWNERSHIP OF THE ENTERPRISE QU ALIFIED FOR THE PURPOSE OF SECTION 80IA. 38. THE ENTERPRISE IS NOT OWNED BY THE CONSORTIUM OF THE EARLIER THREE COMPANIES. IT IS OWNED BY THE AS SESSEE AS A SINGLE CORPORATE ENTITY. THE ASSESSEE COMPANY HAS CARRIED ON THE BUSINESS OF DEVELOPING, OPERATING AND MAINTAINI NG - - ITA 1604 TO 1607 OF 2012 31 INFRASTRUCTURE FACILITY IN INDIA AT TUTICORIN PORT. THE BUSINESS/THE UNDERTAKING/THE ENTERPRISE IS OWNED BY THE ASSESSEE . 39. IT IS TO BE SEEN THAT IN THE CONTEXT OF SECTIO N 80IA, DIFFERENT TERMS OF ENTERPRISE, UNDERTAKING, BU SINESS ALL ARE USED SYNONYMOUSLY AND NOT DISTINCTLY. AN ENTERPRIS E MEANS A BUSINESS CARRIED ON BY AN ASSESSEE. THE ASSESSEE A ND THE ENTERPRISE ARE THE SAME. IT IS MORE APPARENT WHEN WE CONSIDER THE FACT THAT THE ASSESSEE COMPANY DOES NOT HAVE AN Y OTHER BUSINESS IN INDIA OTHER THAN RUNNING THE INFRASTRUC TURAL PROJECT AT TUTICORIN PORT. 40. IN CONCISE OXFORD ENGLISH DICTIONARY, ENTERPR ISE IS A NOUN, EXPLAINED AS A PROJECT OR UNDERTAKING, ESPE CIALLY A BOLD ONE. IT IS ALSO UNDERSTOOD AS A BUSINESS OR COMPAN Y AND IN PITH AND SUBSTANCE, SOMETHING UNDERTAKEN . IN THE SAME DICTIONARY, THE WORD UNDERTAKING IS EXPLAINED AS AN ENTERPRIS E OR A COMPANY OR BUSINESS. THE WORD COMPANY IS EXPLAIN ED AS COMMERCIAL BUSINESS AND THE WORD BUSINESS IS EXPL AINED AS A COMMERCIAL ACTIVITY OR COMMERCIAL ORGANIZATION. IN THE LIGHT OF THE MUTUALLY COMPLIMENTARY MEANING OF THESE DIFFERE NT WORDS PROVIDED IN THE DICTIONARY, IT IS SAFE TO HOLD THAT IN THE PROVISION OF - - ITA 1604 TO 1607 OF 2012 32 LAW ALSO, AS THERE IS NO OTHER INDICATION, ALL THES E TERMS AND EXPRESSIONS ARE USED SYNONYMOUSLY. 41. IN THE FACTS AND CIRCUMSTANCES OF THE CASE IT IS DIRECTLY CLEAR THAT THE ENTERPRISE IS THE BOT PROJE CT DEVELOPED AND OPERATED BY THE ASSESSEE AT TUTICORIN PORT AND THE ASSESSEE COMPANY IS THE OWNER OF THE PROJECT AND TH AT PROJECT IS THE ONLY ADVENTURE OF THE ASSESSEE COMPANY. LITERA LLY SPEAKING THE UNDERTAKING OR THE ENTERPRISE AS WELL AS THE CO MPANY ARE ONE AND THE SAME. IN THAT SENSE THE ASSESSEE HAS ENTER ED INTO A BOT AGREEMENT WITH TUTICORIN PORT TRUST, WHICH MEAN S THE ASSESSEE AS AN ENTERPRISE CARRYING ON THE INFRASTRU CTURE DEVELOPMENT BUSINESS HAS ENTERED INTO SUCH AN AGREE MENT. THUS IT SATISFIES SUB-CLAUSE(B) OF CLAUSE(I) OF SUB -SECTION(4) OF SECTION 80IA. 42. AS THE ASSESSEE COMPANY AND THE ENTERPRISE ARE ONE AND THE SAME, IT HAS ALSO SATISFIED SUB-CLAUSE( C) OF CLAUSE(I) OF SUB-SECTION(4) OF SECTION 80IA BY STARTING ITS O PERATIONS AFTER THE FIRST DAY OF APRIL, 1995. - - ITA 1604 TO 1607 OF 2012 33 43. THEREFORE, WE FIND THAT THE ASSESSEE HAS SATIS FIED ALL THE THREE CONDITIONS AS PRESCRIBED UNDER SUB-CL AUSES(A), (B) AND (C) OF CLAUSE(I) OF SECTION 80IA(4). 44. THERE IS ANOTHER FACTOR TO BE CONSIDERED VERY SERIOUSLY. BEFORE SHIFTING THE BENEFIT AVAILABLE T O INFRASTRUCTURE DEVELOPMENT COMPANIES TO CHAPTER VIA, THE INCOME AS SUCH WAS EXEMPT UNDER CHAPTER III AS PROVIDED IN SECTION 10(23G). AS PER THE PROVISIONS OF LAW CONTAINED IN SECTION 1 0(23G), SUCH PROFITS AND GAINS ARISING OUT OF THE BUSINESS OF IN FRASTRUCTURE DEVELOPMENT WOULD NOT FORM PART OF TOTAL INCOME OF THE ASSESSEE. THE SAID PROVISION WAS OMITTED FROM THE STATUTE BOOK WITH EFFECT FROM 1-4-2007 BY THE FINANCE ACT, 2006. THE OMISSION WAS MADE AS THE EXEMPTION HAS BEEN MADE IN TO A DEDUCTION UNDER SECTION 80IA UNDER CHAPTER VIA. WH EN SECTION 10(23G) WAS IN OPERATION, IT WAS NECESSARY FOR AN A SSESSEE TO CLAIM THE DEDUCTION TO OBTAIN THE APPROVAL OF THE C OMPETENT AUTHORITY PRESCRIBED BY THE CENTRAL GOVERNMENT. TH E CENTRAL BOARD OF DIRECT TAXES(CBDT) WAS THE COMPETENT AUTHO RITY FOR THIS PURPOSE. AS SOON AS THE ASSESSEE HAS ENTERED INTO THE BOT AGREEMENT WITH THE TUTICORIN PORT TRUST, THE AS SESSEE - - ITA 1604 TO 1607 OF 2012 34 COMPANY HAD APPLIED FOR APPROVAL UNDER SECTION 10(2 3G) AND THE CBDT HAS GRANTED SUCH APPROVAL TO THE ASSESSEE COMPANY ENABLING THE ASSESSEE TO CLAIM THE BENEFIT PROVIDED UNDER SECTION 10(23G). THAT APPROVAL HAS BECOME NOW REDU NDANT BECAUSE OF THE TRANSPLANTATION OF THE BENEFIT FROM SECTION 10(23G) TO SECTION 80IA. BUT, THE FACTS AND CIRCUM STANCES UPON WHICH THE CBDT HAD GIVEN APPROVAL TO THE ASSESSEE C OMPANY UNDER SECTION 10(23G) STILL PREVAIL. IT IS NOT POS SIBLE TO TAKE A VIEW THAT THE CBDT HAS GIVEN THE APPROVAL TO THE AS SESSEE COMPANY UNDER SECTION 10(23G) WITHOUT EXAMINING THE SATISFACTION OF VARIOUS STATUTORY CONDITIONS PRESC RIBED BY THE ACT. THE SPIRIT OF THE APPROVAL GRANTED BY THE CBDT SUPP ORTS THE CLAIM OF THE ASSESSEE MADE UNDER SECTION 80IA OF TH E ACT. 45. WHEN THE ASSESSEE COMPANY IS A COMPANY INCORPORATED IN INDIA AND THE ASSESSEE COMPANY ITSE LF CARRIES ON THE ACTIVITY OF DEVELOPING THE INFRASTRUCTURE PROJE CT, THE EXPRESSION IT AS PROVIDED IN SUB-CLAUSES(A), (B) AND (C) OF CLAUSE(I) OF SUB-SECTION(4) OF SECTION 80IA MEANS T HE ENTERPRISE - - ITA 1604 TO 1607 OF 2012 35 AND THE ASSESSEE COMPANY ARE THE SAME. THERE IS NO NEED TO DIFFERENTIATE THEM. 46. IF THE CONTENTION OF THE REVENUE IS ACCEPTED, THERE SHOULD BE ONE MORE COMPANY TO BE INCORPORATED IN IN DIA TO OWN THE ASSESSEE COMPANY, WHICH IS ALREADY INCORPORATED IN INDIA. THIS IS BECAUSE THE REVENUE HAS TREATED THE ASSESSE E COMPANY AS AN ENTERPRISE AND NOT AS THE OWNER OF THE BOT PR OJECT. ACCORDING TO THE REVENUE THE ASSESSEE COMPANY INCOR PORATED IN INDIA IS THE ENTERPRISE MENTIONED IN CLAUSE(I) O F SUB-SECTION(4) OF SECTION 80IA AND THERE SHOULD BE ANOTHER COMPANY INCORPORATED IN INDIA TO OWN THE ASSESSEE COMPANY, WHICH ALONE CAN CLAIM THE DEDUCTION AVAILABLE UNDER SECTION 80I A. THIS INTERPRETATION IS TOO ARTIFICIAL. IF THIS PROPOSIT ION IS ACCEPTED, THE ASSESSEE COMPANY SHOULD BE A FULLY OWNED SUBSIDIARY OF ANOTHER COMPANY INCORPORATED IN INDIA AND THE HOLDI NG COMPANY ALONE WILL BE ENTITLED FOR THE BENEFIT UNDER SECTIO N 80IA. THESE ARE ALL FAR-FETCHED IMAGINATIONS. THE LAW IS VERY SIMPLE AS PROVIDED IN SECTION 80IA THAT THE ENTERPRISE MUST B E OWNED BY A COMPANY INCORPORATED IN INDIA AND WHEN THAT COMPANY - - ITA 1604 TO 1607 OF 2012 36 INCORPORATED IN INDIA IS HAVING ONLY A SINGLE BUSIN ESS OF INFRASTRUCTURE DEVELOPMENT, THE ENTERPRISE VIS--VI S THE COMPANY REMAIN ONE AND THE SAME. 47. THERE IS NO NEED FOR TWO CORPORATE PERSONALITI ES; A COMPANY AFTER ANOTHER COMPANY, AS CONTEMPLATED BY T HE REVENUE. THERE IS NO REVENUE IMPLICATION IN THE ME CHANISM SUGGESTED BY THE REVENUE. THE ASSESSEE COMPANY ITS ELF IS LIABLE FOR TAXATION ON ITS INCOME ARISING FROM THE ENTERPRISE OF INFRASTRUCTURE DEVELOPMENT BUT FOR THE DEDUCTION AV AILABLE UNDER SECTION80IA. IF NO SUCH DEDUCTION IS AVAILABLE, TH E ASSESSEE COMPANY ITSELF IS LIABLE FOR TAXATION ON ITS INCOME ARISING OUT OF THE PROJECT AT TUTICORIN PORT. THERE CANNOT BE A L EVY OF TAX ON THE SAME INCOME IN THE HANDS OF ANOTHER COMPANY WHO SHO ULD OWN THE ASSESSEE COMPANY. ONCE THE INCOME IS TAXED IN THE HANDS OF THE ASSESSEE AS THE SUBSIDIARY COMPANY, THE SAME CANNOT BE TAXED AGAIN IN THE HANDS OF THE OWNER AS THE HOLDIN G COMPANY. AN INCOME IS LIABLE FOR TAXATION ONLY AT ONE POINT. THEREFORE, WHETHER IT IS EXEMPT OR TAXABLE, THE BENEFIT OR LIA BILITY IS CONFINED TO ONE POINT ALONE. THEREFORE, CONTEMPLATING TWO C ORPORATE - - ITA 1604 TO 1607 OF 2012 37 ENTITIES DOES NOT SERVE THE INTERESTS OF EITHER THE REVENUE OR THE ASSESSEE. THEREFORE, WE FIND THAT THE ARGUMENT OF THE REVENUE THAT THE ASSESSEE IS THE ENTERPRISE AND IT IS OWNED BY THE CONSORTIUM OF OTHER THREE COMPANIES, IN WHICH TWO C OMPANIES ARE NOT INDIAN COMPANIES, IS FAR-FETCHED AND DEVOID OF ANY MERIT. 48. IN THE FACTS AND CIRCUMSTANCES, WE FIND THAT T HE ASSESSEE HAS SATISFIED ALL THE CONDITIONS LAID DOWN IN SUB- SECTION(4) OF SECTION 80IA AND ACCORDINGLY IT IS EN TITLED FOR THE DEDUCTION PROVIDED UNDER SECTION 80IA OF THE INCOME -TAX ACT, 1961. 49. THE ASSESSING AUTHORITY IS THEREFORE DIRECTED TO REDO THE ASSESSMENTS AFTER GIVING THE ASSESSEE THE DEDUC TION IN RESPECT OF THE PROFITS AND GAINS ARISING FROM ITS I NFRASTRUCTURE PROJECT DEVELOPED AT TUTICORIN PORT. 50. IN RESULT, THESE APPEALS FILED BY THE ASSESSEE ARE ALLOWED BOTH ON THE QUESTION OF REOPENING AS WELL A S ON THE QUESTION OF ELIGIBILITY FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. - - ITA 1604 TO 1607 OF 2012 38 ORDERS PRONOUNCED ON THURSDAY, THE 6 TH OF DECEMBER, 2012 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 6 TH DECEMBER, 2012. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.