Appeal details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 0735 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 9 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-10-2016
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2010-2011
Appeal Filed On
26-09-2014
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1778/PN/2014 '% % / ASSESSMENT YEAR : 2010-11 ACIT, PANVEL CIRCLE, PANVEL . / APPELLANT V/S M/S. CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD., D.NO.1088, KHOPTA VILLAGE, TALUKA : URAN, DIST. RAIGAD PAN : AAACC5849C . /RESPONDENT / APPELLANT BY : SHRI RAJEEV KUMAR, CIT / RESPONDENT BY : MS. KEURI DESAI / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 26-06-2014 OF THE CIT(A)-I, THANE RELATING TO ASSE SSMENT YEAR 2010-11. 2. THE ONLY GROUND RAISED BY THE REVENUE READS AS UNDER : WHETHER THE CIT(A)-I, THANE IS RIGHT IN LAW IN HOLD ING THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IA OF THE INCOME TAX ACT , 1961 EVEN THOUGH ACTIVITIES UNDERTAKEN BY THE ASSESSEE DO NOT FALL WITHIN CLAUSE (D) OF THE EXPLANATION TO 80IA(4) DEFINING THE TERM INFRASTRUCT URE FACILITIES? 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN OPERATING THE CONTAINER FREIGHT STATION (CFS) AND FILED ITS RETURN OF INCOME ON 11-10-2010 DECLARING TOTAL INCOME OF RS.6,78,33,431/- AFTER CLAIMING DEDUCTION OF RS.34,27,47,435 / DATE OF HEARING :03.10.2016 / DATE OF PRONOUNCEMENT: 05.10.2016 2 ITA NO.1778/PN/2014 U/S.80IA(4) OF THE I.T. ACT. DURING THE COURSE OF ASSESS MENT PROCEEDINGS THE AO OBSERVED THAT THE ASSESSEE COMPA NY HAD SET UP A CONTAINER FREIGHT STATION (CFSS) IN THE JAWAHARLAL NEHRU POR T TRUST OVER APPROX. 30 ACRES OF LAND. THROUGH CFSS, THE ASSESS EE COMPANY PROVIDES A COMMON USER FACILITY EQUIPPED WITH FIXED INSTALLAT IONS. IT OFFERS SERVICES FOR HANDLING AND TEMPORARY STORAGE OF IMPOR T/EXPORT LADEN AND EMPTY CONTAINERS. ALL THE ACTIVITIES RELATED TO T HE CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, R E-EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPO RT, TRANSSHIPMENT, TAKE PLACE FROM THIS STATION. IT STARTED IT S OPERATIONS ON 19 TH JANUARY, 2006. IT HAS THREE WAREHOUSES ADMEASURING 2,60,000 SQ.FT. AND A CONTAINER YARD. 4. ACCORDING TO THE AO THE ONLY ISSUE FOR CONSIDERATION IS WHETHER ON THE FACTS AND IN THE FACTS OF THE CASE AND IN LAW THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION U/S.80IA(4) OF THE ACT. THE AO ANALYSED THE PROVISIONS OF SECTION 80IA(4), CBDT CIRCULAR NO.10/2005 , DATED 16-12-2005 AND OBSERVED THAT FOR CLAIMING DEDUCTION U/S .80IA(4) ALL OF THE FOLLOWING CONDITIONS ARE TO BE FULFILLED: (1) THE ENTERPRISE WHO CLAIMS THE DEDUCTION, SHOULD C ARRY ON THE BUSINESS OF (I) DEVELOPING OR (II) OPERATING AND MAINT AINING OR (III) DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUC TURE FACILITY. AS PER THE CLAUSE (D) OF THE EXPLANATION TO SECTION 80IA(4), THE INFRASTRUCTURE FACILITY MEANS A PORT, AIRPORT, INLAND WATERWAY. THE CENTRAL BOARD OF DIRECT TAXES, NEW DELHI, VIDE C IRCULAR NO.10 OF 2004 DT. 16-12-2005 FURTHER CLARIFIED THE DEFINITION OF PORT FOR THE PURPOSE OF DEDUCTION U/S.80IA INCLUDING STRUCTURES AT THE PORTS FO R STORAGE, LOADING AND UNLOADING ETC. IN THE DEFINITION OF PORT, SUBJEC T TO ISSUANCE OF A CERTIFICATE THAT THE SAID STRUCTURES FORM PART OF THE PORT BY THE CONCERNED PORT AUTHORITY. (2) IT SHOULD BE OWNED BY A COMPANY REGISTERED IN IND IA OR BY A CONSORTIUM OF SUCH COMPANIES. 3 ITA NO.1778/PN/2014 (3) IT SHOULD HAVE ENTERED INTO AN AGREEMENT WITH TH E CENTRAL GOVT. OR A STATE GOVT. OR A LOCAL AUTHORITY OR ANY OTHER STAT UTORY BODY FOR (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (II I) DEVELOPING, OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY; AND (4) IT SHOULD HAVE STARTED OR STARTS OPERATING AND MAIN TAINING THE INFRASTRUCTURE FACILITY ON OR AFTER THE IST DAY OF AP RIL, 1995. 5. THE AO ALSO REFERRED TO THE CBDT INSTRUCTION VIDE F.NO.178/42/2010/ITA-1, DATED 06-01-2011 WHEREIN GUIDELIN ES HAVE BEEN GIVEN TO AOS ON INFRASTRUCTURE ACTIVITIES U/S.80IA(4) O F THE I.T. ACT, 1961 WITH RESPECT TO CONTAINER FREIGHT STATION AND INLAND CONTAINER DEPOTS AND WHICH READ AS FOLLOWS (PARA 5 OF THE AOS ORDE R) : . . . . .A PORT, AIRPORT, INLAND WATERWAY, INLAND PORT OR NAVIGATIONAL CHANNEL IN THE SEA. IN ORDER TO CLARIFY THE TERM PORT, AND WHETHER THE FACILITIES OF LOADING AND UNLOADING CONSTITUTE A PORT, THE BOARD I SSUED TWO CIRCULARS, I.E. CIRCULAR NO.793 DATED 23-06-2000 AND CIRCULAR NO.10 DATED 16-12- 2005. IN THE FIRST CIRCULAR, IT WAS CLARIFIED THAT ST RUCTURES AT PORTS FOR STORAGE, LOADING AND UNLOADING WILL BE COVERED BY TH E DEFINITION OF PORT FOR THE PURPOSE OF SECTION 10(23G) AND SECTION 80IA SUBJECT TO THE CONDITION THAT THE CONCERNED PORT AUTHORITIES HAS ISSUED A CERTIF ICATE THAT SUCH STRUCTURES FORM A PART OF THE PORT AND THE SAME HAVE BEEN CONSTRUCTED UNDER THE BOLT SCHEME. THIS WAS AGAIN REITERATED IN T HE CIRCULAR DATED 16-12-2005 WHEREIN IT WAS STATED THAT FOR THE ASSESSMENT YEAR 2002-03 ONWARDS, STRUCTURES AT PORTS FOR STORAGE, LOADING AND UN LOADING WILL BE INCLUDED IN THE DEFINITION OF PORT. REFERENCES HAVE BEEN RECEIVED IN THE BOARD SEEKING CLARIFICATION WHETHER THE CONTAINER 'F REIGHT STATIONS (CFSS). AND INLAND CONTAINER DEPOTS (ICDS) ARE ELIGIBLE FOR D EDUCTION UNDER SECTION 80IA(4)(I) AND WHETHER THAT ARE TO BE CONSIDE RED AS INFRASTRUCTURE FACILITY FOR THE PURPOSE OF THE SAID SUB-SECTION, ESPECI ALLY IN VIEW OF THE AFORESAID CIRCULAR NO. 1012005, WHICH STATES THAT STRUC TURES FOR LOADING AND UNLOADING AT THE PORT AREA ARE A PART OF THE PO RT. THE BOARD HAS CONSIDERED THE ABOVE . ISSUE AND IT IS HAS BEEN DECIDED THAT AFORESAID CIRCULAR IS APPLICABLE TO THE STRUCTURES FOR LOADING, UNLOADING AND STORAGE AT THE PORT. AN ICD OR A CFS IS USUALLY NOT LOCATED A T THE PORT AND THEREFORE IT IS NOT A PART OF THE PORT FOR THE PURPOSE OF SECTI ON 80IA(4)(I) AND NOT COVERED BY THE CIRCULAR NO. 1012005 DATED 16.12.200 5 AND CIRCULAR NO. 793 DATED. 23.06.2000 ON THE 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 A INFRASTRUCTURE FACILITY BEING A PART OF THE PORT. RE FERENCES HAVE ALSO BEEN RECEIVED AS TO WHETHER INLAND CONTAINER DEPOTS (ICDS) AND CONTAINER FREIGHT STATION (CFS) CAN BE TERMED AS INLAND PORTS A ND THEREBY CLASSIFIED AS INFRASTRUCTURE FACILITY UNDER SECTION 80IA(4)(I) OF THE INCOME TAX ACT, 1961. IN THIS CONTEXT, I AM FURTHER DIRECTED TO CONV EY THAT THE BOARD HAS CONSIDERED THE ISSUE AND IT HAS BEEN DECIDED THAT AS ICD S AND CFSS ARE NOT PORTS LOCATED ON ANY INLAND WATERWAY, RIVER OR CANAL , AND THEREFORE THAT CANNOT BE CLASSIFIED AS INLAND PORTS FOR THE PURPOSE OF SECTION 80IA(4)(I) OF THE INCOME TAX ACT.---' 4 ITA NO.1778/PN/2014 6. HE FURTHER NOTED THAT DURING A.YRS. 2008-09 AND 2009 -10 THE CLAIM OF THE ASSESSEE U/S.80IA(4) WAS ALSO DENIED. HE, THE REFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO HOW IT IS ENTITLED TO DEDUCTION U/S.80IA(4) OF THE I.T. ACT. 7. AFTER CONSIDERING THE VARIOUS SUBMISSIONS GIVEN BY THE ASSESSEE FROM TIME TO TIME THE AO REJECTED THE CLAIM U/S.80IA(4) ON THE GROUND THAT THE ASSESSEE DID NOT FULFIL THE CONDITIONS FOR CLAIMING D EDUCTION U/S.80IA(4) OF THE ACT FOR THE FOLLOWING REASONS : (I) THE ASSESSEE COMPANY IS NOT A PORT (INFRASTRUCTURE FACILITY) AS PER THE EXPLANATION TO SECTION 80IA(4) OF THE I.T. ACT, 1961 AND CBDT CIRCULAR NO.10 OF 2005 DATED 16 TH DECEMBER, 2005. (II) THE ASSESSEE COMPANY HAS NOT ENTERED INTO AN AGREEM ENT WITH THE CENTRAL GOVT./STATE GOVT./ LOCAL AUTHORITY OR ANY O THER STATUTORY BODY FOR DEVELOPING OR OPERATING AND MAINTAINING OR DEVELOPI NG, OPERATING, MAINTAINING A NEW INFRASTRUCTURE FACILITY. (III) THE ASSESSEE COMPANY IS NOT AN INLAND PORT AS INT ENDED IN THE EXPLANATION TO SECTION 80IA(4) OF THE I.T. ACT, 196 1. THERE IS NO CBDT INSTRUCTION DECLARING THE ASSESSEE COMPANY AS INLAND POR T. THE AO ACCORDINGLY DISALLOWED THE CLAIM OF DEDUCTION OF RS.34,27,47,435/- U/S.80IA(4) MADE BY THE ASSESSEE. 8. IN APPEAL THE LD.CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CONTINENTAL WAREHOUSING OF INDIA VS. ACIT VIDE ITA NO.1411/ 2009, 967/2011 AND 968/2011 ORDER DATED 11-05-2002 AND TH E DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF M/S. ALL C ARGO GLOBAL LOGISTICS LTD. VS. DCIT VIDE ITA NO.5018 TO 5022 AND ITA NO.5059 FOR A.YRS.2004-05 TO 2009-10. THE CIT(A) FURTHER RELIED ON TH E DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE, I.E.CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. V S. ACIT 5 ITA NO.1778/PN/2014 VIDE ITA NO.7055/MUM/2011 ORDER DATED 31-08-2012 FOR A .Y. 2008- 09. 9. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 10. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SU BMITTED THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.YRS. 2008-09 AN D 2009-10 AFTER CONSIDERING VARIOUS OBJECTIONS RAISED BY THE AO HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80IA(4) OF THE I.T. ACT. MERELY BECA USE THE REVENUE HAS NOT ACCEPTED THE ORDER OF THE TRIBUNAL AND HAS FILED AN APPEAL BEFORE THE HONBLE HIGH COURT THE SAME CANNOT BE A GROUND TO REVERSE THE DECISION OF THE TRIBUNAL IN ABSENCE OF ANY CONTRARY ORDE R. 11. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND FAIRLY CONCEDED THAT THE ISSUE STANDS DECIDED IN FAOVUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y RS. 2008-09 AND 2009-10. HOWEVER, THE REVENUE HAS NOT ACCEPTED T HE DECISION OF THE TRIBUNAL AND AN APPEAL HAS BEEN FILED BEFORE THE HONB LE HIGH COURT. THEREFORE, TO KEEP THE MATTER ALIVE THE REVENUE HAS FILED THIS APPEAL. 12. AFTER HEARING BOTH THE SIDES, WE FIND AN IDENTICAL ISSUE HAS COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 200 9-10. THE TRIBUNAL VIDE ITA NO.906/PN/2013 ORDER DATED 18-11-2014 , FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2008-09, HAS DISMISSED THE GROUNDS RAISED BY THE REVENUE BY OBS ERVING AS UNDER : 6. AFTER HEARING BOTH THE SIDES, WE FIND AN IDENTIC AL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN THE IMMEDIA TELY PRECEDING ASSESSMENT YEAR. WE FIND THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA 6 ITA NO.1778/PN/2014 NO.7055/MUM/2011 ORDER DATED 31-08-2012 FOR A.Y. 20 08-09 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING A S UNDER : 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE HAVE ALSO CAREFULLY GON E THROUGH THE AFOREMENTIONED DECISION OF THE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. & OTHERS (SUPRA) AND WE FIN D THAT ON IDENTICAL FACTS, EXCEPT DIFFERENCE IN THE DATES IT W AS HELD BY THE SPECIAL BENCH THAT THE ASSESSEE IS AN 'INLAND PORT' HENC E, ELIGIBLE FOR DEDUCTION UNDER SECTION 80 IA(4) OF THE ACT. FOR THE SAKE OF COMPLETENESS WE REPRODUCE RELEVANT PORTION OF THE SPE CIAL BENCH ORDER. '60. THE SECOND QUESTION BEFORE US IS WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) WAS J USTIFIED IN UPHOLDING THE DISALLOWANCE OF DEDUCTION UNDER S. 80-I A(4) OF THE ACT ON MERITS? 61. THE FACTS IN THE CASE OF ALL CARGO GLOBAL LOGISTI CS LTD. ARE THAT THE ASSESSEE COMMENCED CFS ACTIVITIES ON 7TH APRIL, 2003. IN THIS CONNECTION A LETTER HAS BEEN RECEIVED FROM THE C OMMR. OF CUSTOM (IMPORT), BEARING NO. 3 OF 2003, AT. 28TH FEB ., 2003, CLASSIFYING THE AREA OF 3,282 SQ. MTRS. AS CUSTOMS AREA FO R THE PURPOSE OF STORAGE, STUFFING/DESTUFFING AND CLEARANCE O F EXPORT/IMPORT CARGO. SUBSEQUENTLY, THE ASSESSEE HAS BEEN CERTIFIED AS A CUSTODIAN OF CARGO UNDER CUSTOMS ACT, 1962, BY NOT IFYING THE AREA AS 'CUSTOMS AREA'. IT HAS BEEN SUBMITTED THAT A CFS IS COMMON USER FACILITY OFFERING SERVICES IN HANDLING AND TEMPOR ARY STORING OF IMPORT/EXPORT LADEN EMPTIES CARRIED UNDER CUSTOMS CONT ROL AND SUPERVISION. IT IS ALSO A BONDED WAREHOUSE FACILITY WHER E CUSTOMERS CAN CLEAR THE CARGO FOR EXPORT TO VARIOUS COUNTRIES A ND RECEIVE CUSTOMS- CLEARED CARGO FOR HOME CONSUMPTION. THE STAFF OF CUSTOMS DEPARTMENT IS POSTED IN THE CFS FOR SUCH CLEARANCES. T HE ASSESSEE ENCLOSED A CERTIFICATE FROM THE CHARTERED ACCOUNTANT IN FORM NO. 1OCCB, WHICH IS A PRECONDITION FOR CLAIMING THE DEDU CTION UNDER S. 80-IA(4). A CERTIFICATE FROM THE PORT TRUST HAS ALSO BEEN ENCLOSED TO THE EFFECT THAT THE ACTIVITIES MAY BE CONSIDERED AS E XTENDED ACTIVITIES AS OF PORT-RELATED ACTIVITIES IN ACCORDANCE WITH THE CIRCULAR NO. 793, DT 23RD JUNE, 2000 [(2000) 161 CT R (ST) 211. R/W CIRCULAR NO. 133/1995-CUS., DT. 22ND DEC.. 1995 OF T HE BOARD OF EXCISE AND CUSTOMS. THE CBDT HAD ALSO ISSUED CIRCULAR NO. 10 OF 2005, DT. 16TH DEC., 2005 1(2005)199 CTR (ST) 971 CLARIFYING THAT THE STRUCTURES AT THE PORT FOR STORAGE, LOADING AND UN LOADING CONSTITUTE 'PORT' FOR THE PURPOSE OF S. 10(23G) AND S. 80-IA. 62. BEFORE US, LEARNED COUNSEL FOR THE CONTAINER CORP ORATION OF INDIA SUBMITTED AT THE OUTSET THAT THE DECISION OF HON 'BLE DELHI HIGH COURT DT. 11TH MAY. 2012 HAS NOW BEEN RECEIVED, A COPY OF WHICH IS PLACED IN PAPER BOOK ON PAGE NOS. 14 TO 33. THE DECISION WAS RENDERED IN RESPECT OF THREE APPEALS FILED BY THE ASSESSEE BEARING IT APPEAL NOS. 1411 OF 2009, 967 OF 2011 AND 968 OF 2011. THE ASSESSMENT YEARS INVOLVED ARE 2003-04 TO 2005-06. AF TER GOING THROUGH THE HISTORY OF LEGISLATION, IT IS MENTIO NED IN PARA NO. 8 THAT ASST. YR. 1999-2000 WAS FIRST YEAR IN WHICH INLA ND PORTS WERE DESIGNATED AS 'INFRASTRUCTURE FACILITY' UNDER S. 80-IA. THE OBJECT WAS TO STRENGTHEN INFRASTRUCTURE IN GENERAL AND THE TR ANSPORT 7 ITA NO.1778/PN/2014 INFRASTRUCTURE IN PARTICULAR. THEREAFTER IT IS MENTIO NED IN PARA NO. 9 THAT THE QUESTION BEFORE THE COURT ISWHETHER, THE INCOME FROM THE INLAND CONTAINER DEPOTS (ICDS) QUALIFY FOR DEDUCT ION UNDER S. 80-IA(4)(I) OF THE ACT R/W EXPLN. (D) THERETO. THE COURT REFERRED TO THE FACTS OF THE CASE THAT THE ASSESSES OPERATED 45 ICDS. ALL THE ICDS EXCEPT 2 WERE NOTIFIED BY THE CBDT FOR THE PURPOSE O F S. 80- IA(12)(CA) ON 1ST SEPT, 1998. HOWEVER THE POWER TO N OTIFY 'INFRASTRUCTURE FACILITY'' FOR THE PURPOSE OF THIS SECT ION WAS TAKEN AWAY FROM THE CBDT W.E.F. 1ST APRIL, 2002. THE COURT NOTED THAT WHEREVER THE WORD 'PORT' IS USED, IT CARRIES WITH IT M ARITIME CONNECTION OR CONNOTATION. IT IS FOR THIS REASON THA T THE SECTION SEPARATELY REFERS TO AIRPORT AS IT DOES NOT HAVE A MARI TIME CONNECTION. THE CUSTOMS CLEARANCE TAKES PLACE BOTH AT THE AIRPORT AND POST. THE ICDS ARE LANDLOCKED AND V IS NOBODY'S CA SE THAT THEY ARE LOCATED IN SUCH A PLACE WHERE SHIPS OR VESSELS HAVE V DIRECT ACCESS. THE GOODS WHICH ARE BROUGHT IN OR REMOVED FROM THE ICDS ARE BROUGHT OR TAKEN EITHER BY RAILWAY WAGONS OR BY CONTAINER TRUCKS, AS THE CASE MAY BE. FINALLY, IT HAS BEEN HELD T HAT ALTHOUGH ICD MAY NOT BE A PORT, BUT IT IS AN INLAND PORT. THE RELEVANT PORTION OF THE DECISION IS REPRODUCED BELOW: '19. THE TRIBUNAL ERRED IN HOLDING THAT BECAUSE OF T HE CHANGE MADE BY THE FINANCE ACT, 2001 W.E.F. 1ST APRIL, 2002 BY DROPPING THE POWER OF THE CBDT TO NOTIFY ANY OTHER PUBLIC FA CILITY OF SIMILAR NATURE FOR THE PURPOSE OF S. 80-IA OF THE ACT, THE IC D CANNOT BE CONSIDERED AS INLAND PORT. THE ERROR COMMITTED BY THE TRIBUNAL IS TO OVERLOOK THAT BOTH BEFORE AND AFTER THE ABOVE AM ENDMENT, INLAND PORTS WERE SPECIFICALLY MENTIONED AS AN INFRAST RUCTURE FACILITY IN THE STATUTORY PROVISION AND IN THE UNDER STANDING OF THE CBEC, WHICH ADMINISTERS THE CUSTOMS ACT, AN ICD WAS ACTU ALLY AN INLAND PORT. THERE IS ALSO NO DISPUTE THAT EVEN IN 198 3 AMENDMENTS HAD BEEN MADE TO THE CUSTOMS ACT BY TREATIN G THE ICD AS PART OF THE CUSTOMS PORT FOR PURPOSE OF CUSTOMS FO RMALITIES AND CLEARANCES. IN THESE CIRCUMSTANCES, THE REAL QUESTI ON WAS NOT WHETHER THE CBDT NOTIFIED THE. ICD AS AN INLAND PORT BUT WHETHER THE ICD CAN BE CONSIDERED TO BE AN INLAND PORT. IN O UR OPINION HAVING REGARD TO THE PROVISIONS OF THE CUSTOMS ACT, THE COMMUNICATIONS ISSUED BY THE CBEC AS WELL AS THE MINISTR Y OF COMMERCE AND INDUSTRY, THE OBJECT OF INCLUDING 'INLA ND PORT' AS AN INFRASTRUCTURE FACILITY AND ALSO HAVING REGARD TO THE FACT THAT CUSTOMS-CLEARANCE ALSO TAKES PLACE IN THE ICD, THE ASSESSEE'S CLAIM THAT THE ICDS ARE INLAND PORTS UNDER EXPLN. (D) OF S. 80-IA(4) REQUIRES TO BE UPHELD.' 63. THE SUBMISSION OF THE LEARNED COUNSEL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. IS THAT THE HON'BLE DELHI HIGH C OURT HAS HELD THAT ICDS ARE LANDLOCKED AND SITUATED FAR OFF FROM TH E SEA PORT AS SUCH. THE ICDS OF THE CONTAINER CORPORATION OF INDIA ARE LOCATED AT PLACES SUCH AS JAMSHEDPUR, JODHPUR, JAIPUR, ETC. THESE H AVE BEEN HELD TO BE INLAND PORTS FOR THE PURPOSE OF DEDUCTION UNDER S. 80- IA(4). THE CASE OF THE ASSESSES IS BETTER PLACED THAN THE CASE OF CONTAINER CORPORATION OF INDIA LTD. (SUPRA) IN AS MUC H AS IT IS SITUATED 5 FANS, AWAY FROM THE PORT AND IT IS APART OF THE PORT FOR CARRYING OUT ACTIVITIES MENTIONED EARLIER. CUSTOMS-CL EARANCE TAKES PLACE FROM ASSESSEE'S CFS. THEREFORE, IT IS ARGUED THAT T HE ASSESSES IS ENTITLED TO DEDUCTION UNDER S. 80-TA. 8 ITA NO.1778/PN/2014 64. IN REPLY, THE LEARNED STANDING COUNSEL SUBMITTED T HAT WHENEVER THE ASSESSEE CLAIMS AN INCOME TO BE EXEMPT FROM TAX OR C LAIMS A DEDUCTION, THE PRECONDITIONS FOR EXEMPTION OR DEDUCT ION HAVE TO BE STRICTLY SATISFIED BY HIM. AS HELD IN THE CASE OF NOVOPA N INDIA LTD. VS. CCB (1994) 3 SCC 606. IN RESPECT OF THIS DECISION, HE LAID STRESS ON THE FINDING THAT LIBERAL AND STRICT CONSTRUCTIONS O F EXEMPT PROVISION ARE TO BE INVOKED AT DIFFERENT STAGES OF IT S INTERPRETATION. WHEN THE QUESTION IS WHETHER A SUBJECT FALLS IN THE N OTIFICATION OR IN THE EXEMPTION CLAUSE THEN IT BEING IN THE NATURE OF EXEMPTION IS TO BE CONSIDERED STRICTLY AND AGAINST THE SUBJECT BUT ONCE THE AMBIGUITY OR DOUBT ABOUT APPLICABILITY IS LIFTED AND THE SUBJECT FALLS IN THE NOTIFICATION THEN FULL PLAY SHOULD BE GIVEN T O IT AND IT CALLS FOR A WIDER AND LIBERAL CONSTRUCTION. IN THE LIGHT OF TH IS DECISION, HE DEALT WITH THE CLAIM OF THE ASSESSEE UNDER S. 80-IA). IT IS SUBMITTED THAT IN BOARD CLARIFICATION AT. 6TH JAN., 2011, IN WHICH DT. 16TH .DEC., 2005 AND 23RD JUNE, 2000 WERE CONSIDERED, IT HAS BEEN CLARIFIED THAT ICDS AND CFSS ARE NOT 'PORTS' LOCATED ON ANY INLA ND WATERWAY, RIVER OR CANAL AND THEREFORE THEY CANNOT BE CLASSIFIE D AS INLAND PORTS' FOR THE PURPOSE OF S. 80-IA(4). IT IS FURTHER SU BMITTED THAT THE CERTIFICATE ISSUED BY JAWAHAR LAL NEHRU PORT TRUST HAS BEEN WITHDRAWN BY THE PORT TRUST IT IS ALSO SUBMITTED THAT I NLAND WATERWAYS AUTHORITY OF INDIA ACT. 1985, PROVIDES THE DEFINITION OF THE TERM INFRASTRUCTURE FACILITIES', IN ITS CL. (F), AS THE STRUCTURES SUCH AS DOCKS, WHARVES, JETTIES, STAGES, LOCKS; BUOYS, INLAND PO RTS, CARGO HANDLING EQUIPMENTS, ROAD AND RAIL ACCESS AND CARGO STO RAGE SPACES AND STATES THAT THE EXPRESSION 'INFRASTRUCTURE FACILITIE S SHALL BE CONSTRUED ACCORDINGLY. IN THIS ACT, INLAND PORT IS INC LUDED AS ITEM, THUS, THIS TERM HAS A DISTINCT MEANING, SEPARATE AND APA RT FROM OTHER TERMS. THEREFORE, ICDS AND CFSS CANNOT BE INTERP RETED TO BE INCLUDED IN THE TERM 'INLAND PORT'. IT IS ALSO SUBMITT ED THAT CIRCULAR NO. 74 OF 1997-CUS., DT. 30TH DEC., 1997 OF THE CBEC MAKES A DISTINCTION BETWEEN INLAND PORTS AND ICDS/CFSS FOR GRA NT OF DUTY DRAWBACK BENEFIT. IT IS ALSO SUBMITTED THAT A STUDY PRE PARED BY TRANSPORT AND TOURISM DIVISION OF ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND PACIFIC (A DIVISION OF THE UNIT ED NATIONS) PROVIDES AN INSIGHT IN THE CONCEPT OF 'INLAND PORT' V IS-AVIS 'SEAPORT'. IT IS MENTIONED THERE THAT ACCESS SHOULD BE PROVIDED TO INLAND PORTS THROUGH WATERWAYS FROM SEA BY DEVELOPING THEM. 65. WE HAVE CONSIDERED THE FACTS OF THE CASES AND SUBMIS SIONS MADE BEFORE US. IT MAY BE MENTIONED THAT ONE OF THE ARGUMENTS ADVANCED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE CASE OF CONTAINER CORPORATION OF INDIA (SUPRA) IS NOT BASED ON ANY OF THE CIRCULARS ISSUED BY THE PORT AUTHORITIES, HOWEVER, THE CFS OF THE ASSESSEE HAS BEEN GRANTED SUCH CERTIFICATE. THE CERTIFICA TE MENTIONS THAT THE CFS CARRIES ON PORT RELATED ACTIVITIES, AND IT MAY BE CONSIDERED AS AN EXTENDABLE ACTIVITY OF THE PORT RELA TED ACTIVITIES. IT IS CLARIFIED THAT THE CFS HAS NOT BEEN BUILT ON BOT O R BOLT SCHEME SAND THAT IT IS SITUATED ON LAND WHICH DOES NOT BELONG TO THE PORT THE LETTERS WRITTEN BY PORT TRUST TO THE ASSESSEE ALSO STAT E THAT THE MATTER HAS BEEN REFERRED TO THE IT DEPARTMENT. THE D EPARTMENT HAS CLARIFIED THAT AN ICD/CFS DOES NOT CONSTITUTE AN I NLAND PORT. IN THE CASE OF GIT VS. ABG HEAVY INDUSTRIES LTD. & ORS. (20 10) 231 CTR (BOM) 127: (2010) 37 DTR (BOM) 233: (2010) 189 TAXMAN 54 (BOM), THE HON'BLE COURT HAS HELD THAT THE ASSESSEE IS EN TITLED TO DEDUCTION UNDER S. 80-IA. HOWEVER THERE IS A VERY SAL IENT DIFFERENCE 9 ITA NO.1778/PN/2014 IN FACTS THAT STRUCTURES WERE LOCATED AT PORT AND SUCH STRUCTURES HAD TO BE HANDED OVER TO THE PORT TRUST ON EXPIRY OF THE PERIOD OF AGREEMENT IN THE CASE AT HAND IT IS CLEAR THAT THE A SSETS OF THE CFS ARE NOT TO BE HANDED OVER TO THE PORT TRUST AT ANY P OINT OF TIME AS IT IS NOT BUILT ON BOT AND BOLT SCHEME. THE CFS IS ALSO N OT LOCATED AT THE PORT. AS AGAINST THE AFORESAID, THE LEARNED STANDIN G COUNSEL HAS SUBMITTED THAT CLARIFICATIONS ISSUED BY OTHER AUTHORITI ES INCLUDING CBEC UNDER THE RELEVANT ACTS DO NOT LAY GUIDELINES UN DER THE IT ACT AND THAT THE MATTER HAS TO BE DECIDED UNDER THE IT A CT INDEPENDENTLY. FOR DOING SO, INITIALLY A STRICT INTE RPRETATION HAS TO BE PLACED ON THE WORDS 'INLAND PORT' TO EXAMINE THAT THE ASSESSEE IS ENTITLED TO THE DEDUCTION. CBDT HAS FURNISHED OPINI ON THAT ICDS AND CFSS ARE NOT ENTITLED TO SUCH DEDUCTION AS THEY DO NOT CONSTITUTE INLAND PORTS. OTHER ACTS AS WELL AS STUDY RE PORT LEAD TO THE CONCLUSION THAT A PORT CAN SAID TO BE AN INLAND P ORT ONLY IF IT HAS AN ACCESS TO THE SEA VIA A WATERWAY. 66. WE FIND THAT THE SOLITARY DECISION IN THIS CASE BY ANY HIGH COURT IS IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD. (SUPRA). IN THIS CASE IT HAS BEEN HELD THAT AN ICD IS NOT A PORT BUT IT IS AN INLAND PORT. THE CASE OF CFS IS SIMILARLY SITUATED IN THE SENSE THAT BOTH CARRY OUT SIMILAR FUNCTIONS. I.E.. WAREHOUSING, CUSTOMS CLEARANCE AND TRANSPORT OF GOODS FROM. ITS LOCATION TO THE SEAP ORTS AND VICE VERSA BY RAILWAY OR BY TRUCKS IN CONTAINERS. THUS, THE ISSUE IS NO LONGER RES INTEGRA. RESPECTFULLY FOLLOWING THIS DECI SION, IT IS HELD THAT A CFS IS AN INLAND PORT WHOSE INCOME IS ENTITLED TO DEDUCTION UNDER S. 80-IA(4). QUESTION NO. 2 IS ANSWERED ACCORDIN GLY,' 6.1 IN THIS VIEW OF THE SITUATION, RESPECTFULLY FOLLO WING THE AFORESAID DECISION OF SPECIAL BENCH WE ALLOW THE APPE AL FILED BY THE ASSESSEE AND IT IS HELD THAT ASSESSEE IS ENTITLED TO GET DEDU CTION UNDER SECTION 80IA(4) OF THE ACT. 6.1 RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUN AL IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECEDING ASSESSMENT Y EAR AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO O UR NOTICE BY LD. DEPARTMENTAL REPRESENTATIVE , WE FIND NO INFIRMI TY IN THE ORDER OF THE CIT(A) ALLOWING THE CLAIM OF THE ASSESSEE. ACC ORDINGLY, THE ORDER OF THE CIT(A) IS UPHELD AND THE GROUNDS RAISED B Y THE REVENUE ARE DISMISSED. 13. SINCE THE LD.CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF T HE ASSESSEE HAS FOLLOWED THE DECISION OF THE TRIBUNAL IN ASSESS EES OWN CASE AS WELL AS VARIOUS OTHER DECISIONS, THEREFORE, IN ABSEN CE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE AGAINST THE DEC ISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE CIT(A) ALLOWING THE CLAIM OF DEDUCTION U/S.80IA(4 ). MERELY BECAUSE THE REVENUE HAS FILED AN APPEAL BEFORE THE HONB LE HIGH 10 ITA NO.1778/PN/2014 COURT, THE SAME IN OUR OPINION CANNOT BE A GROUND TO TA KE A CONTRARY VIEW THAN THE VIEW TAKEN BY THE TRIBUNAL ESPECIALLY IN ABS ENCE OF ANY ORDER REVERSING THE DECISION OF THE TRIBUNAL. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) AND THE GROUNDS RAISED BY THE R EVENUE ARE DISMISSED. 14. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05-10-2016. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; ' DATED : 05 TH OCTOBER, 2016. ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. THE CIT(A ), - I, THANE THE CIT-I, THANE 5. $ ''( , ( , / DR, ITAT, A PUNE; 5 . + / GUARD FILE. / BY ORDER, // $ ' //TRUE COPY // -. ' ( / SR. PRIVATE SECRETARY ( , / ITAT, PUNE
