DCIT, Circle-1(2), Hyderabad, Hyderabad V. Belair Logistics Limited, Hyderabad, Hyderabad

ITA 1698/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6061 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 16-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SREEKAR
• Assessee Lawyers: S RAMA RAO
• Section: 142(1); 115JB

Judgement Text

1 ITA.NO.1698/HYD/2016 BELAIR LOGISTICS LIMITED, HYDERABAD. IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA.NO.1698/HYD/2016 ASSESSMENT YEAR 2012-2013 THE DCIT, CIRCLE-1(2) HYDERABAD. VS. BELAIR LOGISTICS LIMITED, HYDERABAD. PAN AACCB0177A (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI V. SREEKAR FOR ASSESSEE : SHRI S. RAMA RAO DATE OF HEARING : 14.03.2017 DATE OF PRONOUNCEMENT : 14.03.2017 ORDER PER G. MANJUNATHA, A.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF THE CIT(A)-I, HYDERABAD DATED 26.09.2016 AND IT PERTAI NS TO THE A.Y. 2012-2013. THE REVENUE HAS RAISED THE FOLLOWING GRO UNDS : (I) LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CLAIMED BY THE ASSESSEE U/S.80IA(4) BY RELYING ON THE DECISION OF ITAT IN T HE CASE OF THE ASSESSEE FOR THE A.YS. 2006-07 TO 2010-11. (II) LD. CIT(A) OUGHT TO HAVE CONSIDERED THAT THE REVENU E HAS NOT ACCEPTED THE DECISION OF ITAT RENDERED IN ASSESSEE S CASE FOR THE PREVIOUS YEARS AND PREFERRED APPEAL U/S.260A OF THE I.T. ACT. (III) LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE BASIC CONDITION FOR CLAIMING DEDUCTION IS NOT FULFILLED IN ASSESSEE S CASE AS THE LEASE AGREEMENT ENTERED INTO BY ASSESSEE WITH K SPL IS NOT AN AGREEMENT WITH CENTRAL GOVERNMENT OR STATE 2 ITA.NO.1698/HYD/2016 BELAIR LOGISTICS LIMITED, HYDERABAD. GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUT ORY BODY AS CONTEMPLATED IN SEC.80IA OF THE I.T. ACT. (IV) LD. CIT(A) OUGHT TO HAVE FURTHER CONSIDERED THAT TH E PROVISO TO SEC.80IA(4) IS ALSO NOT APPLICABLE TO THE CASE OF T HE ASSESSEE AS IT WAS ONLY THE LEASE OF THE LAND RECEIVED BY KS PL WHICH WAS TRANSFERRED TO THE ASSESSEE AND NOT THE INFRAST RUCTURE FACILITY AS ENUMERATED IN SEC.80IA(4). (V) LD. CIT(A) FAILED TO NOTE THAT THE BOARD CIRCULAR N O.793 DATED 26.03.2000 AND DECISION OF BOMBAY HIGH COURT HIGH C OURT ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE WHER E THE ASSESSEE HAD ONLY ENTERED INTO A SUB-LEASE AGREEMEN T WITH KSPL. (VI) THE APPEAL CRAVES LEAVE TO ADD, DELETE, SUBSTITUTE, AMEND ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. (VII) FOR THESE AND OTHER GROUNDS THAT MAY BE CANVASSED A T THE TIME OF HEARING OF THE APPEAL, IT IS BESEECHED THAT ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLO WANCE OF DEDUCTION CLAIMED U/S 80IA(4) BE RESTORED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPAN Y ENGAGED IN MAINTENANCE AND OPERATION OF PORT SERVICES HAS FILED ITS RETURN OF INCOME FOR THE A.Y. 2012-2013 ON 29.09.2012 DECLARING NIL TOTAL INCOME AFTER CLAIMING DEDUCTION UNDER SECTION 80I A(4) FOR RS.5,25,99,691 UNDER NORMAL PROVISIONS AND RS.5,24, 55,136 UNDER THE PROVISIONS OF SECTION 115JB OF THE I.T. ACT, 1961. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND ACCORDINGLY, NOTICES UND ER SECTION 143(2) AND 142(1) WERE ISSUED. IN RESPONSE TO THE NOTICES, TH E AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FURNISHED THE INFORMATION AS CALLED FOR. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESS EE HAS RECEIVED TWO TYPES OF INCOME I.E., LEASE RENTAL FROM WAREHOUSING AND LEASE RENTAL FROM OPEN YARD WHICH IS NOT OWNED BY THE ASSESSEE. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IA(4) ON TO TAL INCOME 3 ITA.NO.1698/HYD/2016 BELAIR LOGISTICS LIMITED, HYDERABAD. INCLUDING THE INCOME RECEIVED FROM LEASE RENTAL ON O PEN YARD. THE A.O. OBSERVED THAT SINCE OPEN YARD IS NOT AN INFRASTRUCTURE FACILITY WITHIN THE MEANING OF SECTION 80IA(4) OF THE ACT, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4) AND ACCORDINGLY DISAL LOWED THE DEDUCTION CLAIMED UNDER SECTION 80IA(4) AT RS.5,25,99, 691. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A), CONTENDING, INTER ALIA, T HAT THE ISSUE INVOLVED IN THIS APPEAL IS COVERED IN FAVOUR OF THE A SSESSEE BY THE DECISION OF ITAT, HYDERABAD B BENCH IN ITA.NOS.13 77 TO 1380 AND ITA.NO.1389/HYD/2014 FOR THE A.YS. 2006-07 TO 2010- 2011 IN ASSESSEES OWN CASE, WHEREIN THE HONBLE TRIBUNAL HA S OBSERVED THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 8 0IA(4) IN RESPECT OF INCOME RECEIVED FROM LEASE RENTAL ON OPEN YARD. ASSE SSEE ALSO RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ABG HEAVY INDUSTRIES LTD., (SUPRA). THE CIT(A) AFTER CONSI DERING THE ASSESSEES EXPLANATION AND ALSO BY FOLLOWING THE DECI SION OF COORDINATE BECH OF HYDERABAD TRIBUNAL IN ASSESSEES OWN CASE F OR THE A.YS. 2006- 07 TO 2010-2011, DELETED THE ADDITIONS MADE BY THE A.O. TOWARDS DISALLOWANCE UNDER SECTION 80IA(4) OF THE I.T. ACT, 19 61. AGGRIEVED BY THE CIT(A) ORDER, THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED THE M ATERIAL ON RECORD. AT THE TIME OF HEARING THE LD. A.R. FOR THE A SSESSEE SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS COVERED BY THE DECISION OF ITAT, HYDERABAD BENCH IN ASSESSEES OWN CASE IN ITA.NO.13 77 TO 1380 AND 1389/HYD/2014 FOR THE A.YS. 2006-07 TO 2010-2011 WHER EIN THE ITAT HAS ALLOWED THE DEDUCTION CLAIMED UNDER SECTION 80IA(4 ) TOWARDS INCOME RECEIVED FROM LEASE RENTALS ON OPEN YARD FACI LITY. THE LD. D.R. FAIRLY ACCEPTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. WE FIND THAT THE COORDINATE BENCH OF ITAT, HYDERABAD IN AS SESSEES OWN 4 ITA.NO.1698/HYD/2016 BELAIR LOGISTICS LIMITED, HYDERABAD. CASE FOR THE A.YS. 2006-07 TO 2010-2011 HAS CONSIDER ED THE ISSUE AND AFTER CONSIDERING THE RATIO LAID DOWN BY THE HONBLE B OMBAY HIGH COURT IN THE CASE OF ABG HEAVY INDUSTRIES (SUPRA) HAS HELD AS UNDER : KEEPING IN VIEW THE CERTIFICATE DATED 08.04.2005 I SSUED BY THE KAKINADA DEEP WATER PORT IN THE LIGHT OF CBDT CIRCU LAR NOS.793 DATED 23.06.2000 AND 10/2005 DATED 16.12.2005, WE A RE OF THE VIEW THAT THE ISSUE INVOLVED IN THE PRESENT CASE RE LATING TO THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80IA IS SQUARELY COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COUR T IN THE CASE OF ABG HEAVY INDUSTRIES LTD., (SUPRA) AND THIS POSI TION IS NOT DISPUTED EVEN BY THE LEARNED D.R. WE THEREFORE RESP ECTFULLY FOLLOW THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF ABG HEAVY INDUSTRIES LTD., (SUPRA) AND UPHOLD THE IMPUG NED ORDER OF THE LD. CIT(A) ALLOWING THE CLAIM OF ASSESSEE FOR D EDUCTION UNDER SECTION 80IA. 5. IN THIS VIEW OF THE MATTER AND ALSO RESPECTFULLY FO LLOWING THE DECISION OF THE COORDINATE BENCH IN ASSESSEES OWN CA SE FOR THE A.YS. 2006-07 TO 2010-2011, WE ARE OF THE VIEW THAT THE ASSES SEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4) IN RESPECT OF INCO ME FROM LEASE RENTAL FROM OPEN YARD. THE CIT(A) AFTER CONSIDERING TH E RELEVANT FACTS HAS RIGHTLY DELETED THE ADDITIONS MADE BY THE A.O. TOW ARDS DISALLOWANCE UNDER SECTION 80IA(4) OF THE ACT. WE DO NOT FIND ANY I NFIRMITY IN THE ORDER OF THE CIT(A). HENCE, WE ARE INCLINED TO UPHOLD THE ORDER OF THE LD. CIT(A). THE GROUNDS OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.03.2017. SD/- SD/- (D.MANMOHAN) (G. MANJUNATHA) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DATED 14 TH MARCH, 2017. VBP/- 5 ITA.NO.1698/HYD/2016 BELAIR LOGISTICS LIMITED, HYDERABAD. COPY TO 1. THE DCIT, CIRCLE-1(2), B BLOCK, 7 TH FLOOR, I.T. TOWERS, A.C. GUARDS, MASAB TANK, HYDERABAD. 2. BELAIR LOGISTICS LIMITED, 8-2-418, 3 RD FLOOR, MEENAKSHI HOUSE, ROAD NO.7, BANJARA HILLS, HYDERABAD. 3. CIT(A)-1, 7 TH FLOOR, A-BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERABA D. 4. PR. CIT-1, HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE.