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

ITA 178/VIZ/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9008 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 13-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURUSAMY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HONBLE JUDICIAL MEMBER & SHRI G. MANJUNATHA, HONBLE ACCOUNTANT MEMBER ITA NO. 178/VIZ/2016 (ASST. YEAR : 2012-13) DCIT, CIRCLE-3(1), VISAKHAPATNAM. VS. M/S. GATEWAY EAST INDIA PVT. LTD., CONTAINER FREIGHT STATION, VPT EXIM PARK, OPP: GAIL, SHEELA NAGAR, VISAKHAPATNAM. PAN NO. AABCV 1938 N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MADHUR AGARWAL ADV. DEPARTMENT BY : SHRI GURUSAMY CIT DR DATE OF HEARING : 11/04/2017. DATE OF PRONOUNCEMENT : 19/04/2017. O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-1, VISAKHAPATNAM, DATED 09/02/2016 FOR THE ASSESSMENT YEAR 2012-13. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF OPERATION OF CONTAINER FREIGHT STATION (CFS), FILED ITS RETURN OF INCOME, BY DECLARING NIL INCOME AFTER CLAIMING DEDUCTION UNDER SECTION 80-IA(4) OF THE ACT. THE ASSESSING OFFICER HAS CALLED THE ASSESSEE TO JUSTIFY THE CLAIM UNDER SECTION 80-IA(4) OF THE ACT. THE ASSESSEE BEFORE THE ASSESSING OFFICER CONTENDED THAT SECTION 80-IA HAS 2 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) BEEN AMENDED BY THE FINANCE ACT, 2000 AS PER CBDT CIRCULAR NO. 739 DATED 23/06/2000. THE PORT TRUST COULD BE CERTIFIED STRUCTURES NEAR THE PORT FOR BENEFIT UNDER SECTION 10(23G) AND 80-IA OF THE ACT. THE ASSESSEE HAS OBTAINED THE SAID CERTIFICATE FROM THE PORT OF VISAKHAPATNAM AND WAS GOT APPROVAL FROM THE MINISTRY OF COMMERCE & INDUSTRY AND THAT THE ASSESSEE HAS CLASSIFIED AS CONTAINER FREIGHT STATION BY THE COMMISSIONER OF CUSTOMS AND SUBMITTED THAT INLAND PORT FALLS WITHIN THE DEFINITION OF INFRASTRUCTURE FACILITY UNDER SECTION 80IA-(4) AND ELIGIBLE FOR DEDUCTION. HOWEVER, ASSESSING OFFICER AFTER CONSIDERING THE EXPLANATION, DENIED THE CLAIM OF THE ASSESSEE BY OBSERVING THAT ICD & CSF ARE NOT INFRASTRUCTURE FACILITIES AND NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA(4). AN IMPORTANT CRITERIA FOR CLAIM UNDER SECTION 80-IA(4) OF THE ACT IS THE INDIAN COMPANY SHOULD ENTER INTO AN AGREEMENT WITH CENTRAL OR STATE GOVERNMENT OR A GOVERNMENT UNDERTAKING ETC. FOR OPERATING THE SAID FACILITY, SUBJECT TO THE CONDITION THAT SUCH FACILITY SHOULD BE TRANSFERRED TO THE SAID GOVERNMENT UNDERTAKING WITHIN THE PERIOD STIPULATED IN THE AGREEMENT. THERE IS NO AGREEMENT BETWEEN THE ASSESSEE COMPANY AND THE GOVERNMENT OR BODY, ETC. AS ENJOINED IN SECTION 80-IA OF THE ACT FOR DEVELOPMENT OF THE SAID STRUCTURE. 3 . ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). LD. CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE AND BY FOLLOWING THE DECISION IN THE CASE OF ASSESSEES ITSELF FOR THE ASSESSMENT YEAR 2011-12 IN ITA NO. 15/VIZAG/2015, BY ORDER 3 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) DATED 29/04/2015 DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80-IA(4) OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER:- 5.3 I HAVE CAREFULLY CONSIDERED THE ABOVE SUBMISSIONS. I HAVE ALSO PERUSED THE ORDER OF THE HON'BLE TRIBUNAL, VISAKHAPATNAM BENCH IN THE ASSESSEE'S OWN CASE FOR THE ASST. YR. 2011-12 IN ITA NO.15/VIZAG/2015, DATED 29.4.2015. THE RELEVANT PORTION OF THE DECISION OF THE HON'BLE TRIBUNAL IS EXTRACTED BELOW : ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO ON RURAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAW ' I D, WE HOLD AS FOLLOWS: IN CIRCULAR NO. 18/2009 DATED 8/6/2009 ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS IN F.NO.434117/2009-CUS.IV THE DIFFERENCE BETWEEN INLAND CONTAINER DEPOTS (ICD) AND CONTAINER FREIGHT STATIONS. (CFS) HAS BEEN SPELT OUT IN THE FOLLOWING MANNER : DEFINITION OF ICD : AN INLAND CONTAINER DEPOT MAY BE DEFINED AS : A COMMON USER FACILITY WITH PUBLIC AUTHORITY STATUS (EMPHASIS SUPPLIED) EQUIPPED WITH FIXED INSTALLATIONS AND OFFERING SERVICES FOR HANDLING AND TEMPORARY STORAGE OF IMPORT / EXPORT LADEN AND EMPTY CONTAINERS CARRIED UNDER CUSTOMS CONTROL AND WITH CUSTOMS AND OTHER AGENCIES COMPETENT TO CLEAR GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE-EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT. TRANSSHIPMENT OF CARGO CAN ALSO TAKE PLACE FROM SUCH STATIONS. DEFINITION OF CFS : A CONTAINER FREIGHT STATION MAY BE DEFINED AS : CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS. FIRSTLY, CFS DO NOT HAVE 'PUBLIC AUTHORITY STATUS' WHEREAS ICD IS A PLACE THAT ACTS AS A 'SELF CONTAINED CUSTOMS STATION' AS CATEGORICALLY SPELT IN CIRCULAR OF CBEC DT.8.6.2009. FURTHER THE SAID CIRCULAR CLEARLY DISTINGUISHES ICD AND CFS AND MAKES IT VERY OBVIOUS THAT CFS IS NOTHING BUT A WAREHOUSE. DISTINCTION BETWEEN ICT & CFS : INLAND CONTAINER DEPOT IS A PLACE THAT ACTS AS A SELF CONTAINED CUSTOMS STATIONS LIKE A PORT OR AIR CARGO UNIT WHERE FILLING OF CUSTOMS MANIFESTS. BILLS OF ENTRY SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE. WAREHOUSING TEMPORARY ADMISSIONS RE-EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT. 4 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) TRANSSHIPMENT ETC., TAKES PLACE' CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS AN ICD IS A SELF CONTAINED CUSTOMS STATION LIKE A PORT OR AIR CARGO UNIT WHERE FILING OF CUSTOMS MANIFESTS, BILLS OF ENTRYS, SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE-EXPORT TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT, TRANSSHIPMENT, ETC., TAKE PLACE. AN ICD WOULD HAVE ITS OWN AUTOMATED SYSTEM WITH A SEPARATE STATION CODE (SUCH AS INTO 6, INSNJF6 ETC.) BEING ALLOTTED BY DIRECTORATE GENERAL OF SYSTEMS AND WITHIN-BUILT CAPACITY TO ENTER EXAMINATION REPORTS AND ENABLE ASSESSMENT OF DOCUMENTS, PROCESSING OF MANIFEST, AMENDMENTS, ETC. CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS. A CFS IS ONLY A CUSTOMS AREA LOCATED IN THE JURISDICTION OF A COMMISSIONER OF CUSTOMS EXERCISING CONTROL OVER A SPECIFIED CUSTOMS PORT, COMMISSIONER OF CUSTOMS EXERCISING CONTROL OVER A SPECIFIED CUSTOMS PORT, AIRPORT, LCS/ICD. A CFS CANNOT HAVE AN INDEPENDENT EXISTENCE AND HAS TO BE LINKED TO A CUSTOMS STATION SET UP WITH THE MAIN OBJECTIVE OF DECONGESTING THE PORTS. IN A CFS ONLY A PART OF THE CUSTOMS PROCESSES MAINLY THE EXAMILNATION OF GOODS IS NORMALLY CARRIED OUT BY CUSTOMS BESIDES STUFFING / DESTUFFING OF CONTAINERS AND AGGREGATION/SEGREGATION OF CARGO. THUS, CUSTOMS FUNCTIONS RELATING TO PROCESSING OF MANIFEST, IMPORT / EXPORT DECLARATIONS AND ASSESSMENT OF BILL OF ENTRY / SHIPPING BILL ARE PERFORMED IN THE CUSTOM HOUSE / CUSTOMS FUNCTIONS RELATING TO PROCESSING OF MANIFEST, IMPORT / EXPORT DECLARATIONS AND ASSESSMENT OF BILL OF ENTRY / SHIPPING BILL ARE PERFORMED IN THE CUSTOM HOUSE / CUSTOMS FUNCTIONS / CUSTOM OFFICER THAT EXERCISES JURISDICTION OVER THE PARENT PORT / AIRPORT / ICD / LCS TO WHICH THE SAID CFS IS ATTACHED. IN THE CASE OF CUSTOMS STATIONS HAVING FACILITY OF AUTOMATED PROCESSING OF DOCUMENTS, TERMINALS ARE PROVIDED AT SUCH CFSS FOR RECORDING THE RESULT OF EXAMINATION, ETC. IN SOME CFSS, EXTENSION SERVICE CENTERS ARE AVAILABLE FOR FILING DOCUMENTS, AMENDMENTS ETC. HOWEVER, THE ASSESSMENT OF THE DOCUMENTS ETC IS CARRIED OUT CENTRALLY. AN ICD MAY ALSO HAVE A NUMBER OF CFSS ATTACHED TO IT WITHIN THE JURISDICTION OF THE COMMISSIONER OF CUSTOMS JUST AS IN THE CASE OF A PORT AND ITS CFSS (AS ON DATE THERE ARE 28 CFSS LINKED TO CHENNAL PORT) (REFER CIRCULAR NO. 19/2009-CUST., DATED 8-6-2009). A STANDALONE CUSTOMS CLEARANCE FACILITY IN AN INLAND COMMSSIONERATE CANNOT BE APPROVED BY THE COMMISSIONER AS A CFS, IF THERE IS NO ICD / PORT WITHIN ITS JURISDICTION TO WHICH THE SAID CFS CAN BE ATTACHED. SUCH A FACILITY CAN, HOWEVER, BE NOTIFIED AS AN ICD I.E., AS AN INDEPENDENT CUSTOMS STATION WITH PROVISION FOR FILING AND ASSESSMENT OF DOCUMENTS AND EXAMINATION OF GOODS. A CUSTOMS CLEARANCE FACILITY COULD BE ESTABLISHED AS A CFS AT A PORT CITY FOR EXAMINATION OF IMPORTED / EXPORT GOODS, SINCE THE CFS WOULD FALL UNDER THE JURISDICTION OF COMMISSIONER OF CUSTOMS, HAVING JURISDICTION OVER THE CUSTOMS PORT WITH WHICH THE CFS WOULD BE ATTACHED. FURTHER, IN A PORT CITY 5 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) SUCH AS CHENNAI OR MUMBAI, IT MAY BE POSSIBLE TO DEVELOP AN ICD WITHIN THE TERRITORIAL JURISDICTION OF THE CONCERNED CUSTOMS COMMISSONERATE IN ADDITION TO EXISTING CFSS. SUCH AN ICD SHOULD BE CAPABLE OF PROVIDING FULL-FLEDGED CUSTOMS SERVICES, INDEPENDENT EDT SYSTEM, AND ALL PROCEDURES MEANT FOR TRANSSHIPMENT OF CARGO HAVE TO BE FOLLOWED FOR MOVEMENT OF GOODS FROM THE PORT OF IMPORT TO THE ICD. FURTHER, SUCH AN ICD WOULD FUNCTION AS AN INDEPENDENT CUSTOMS STATION IN ALL RESPECTS AND WOULD NOT BE ATTACHED TO ANY OTHER PORT OR AIRPORT. THUS, IN RESPECT OF PROPOSALS IT HAS TO BE EXAMINED WHE4THER THE PROPOSED FACILITY IS REQUIRED TO BE APPROVED AS AN ICD OR CFS. MOVEMENT OF GOODS FROM A PORT I AIRPORT / LCS TO AN ICD IS IN THE NATURE OF MOVEMENT FROM ONE CUSTOMS STATION TO ANOTHER, GOVERNED BY GOODS IMPORTED (CONDITION OF TRANSSHIPMENT) REGULATIONS, 1995, ON THE OTHER HAND, MOVEMENT OF GOODS FROM A PORT I AIRPORT /LCS OR AN ICD TO A CFS IS AKIN TO FOCAL MOVEMENT FROM A CUSTOMS AREA OF THE CUSTOMS STATION TO ANOTHER CUSTOMS AREA OF THE SAME STATION, COVERED BY LOCAL PROCEDURE EVOLVED BY THE COMMISSIONER OF CUSTOMS AND COVERED BY BONDS, BANK GUARANTEE, ETC. FURTHER, THE PERSON UNDERTAKING THE TRANSSHIPMENT WOULD BE REQUIRED TO FOLLOW THE PRESCRIBED PROCEDURE. AS RIGHTLY CONTENDED BY THE LEARNED AR OF THE APPELLANT, THE ABOVE CIRCULAR ANSWERS IN A VERY CLEAR AND CATEGORICAL MANNER THE OBJECTIONS RAISED BY THE ASSESSING OFFICER. AS FAR AS THE CONTENTION THAT THERE IS NO AGREEMENT WITH ANY GOVERNMENT OR STATUTORY AUTHORITY, WE FIND THAT THE ASSESSEE HAS PLACED ON RECORD LETTER OF INTENT. IN FACT THE MINISTRY OF COMMERCE AND INDUSTRY, VIDE LETTER DATED 10/2/2005, WRITTEN TO THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY REGARDING SETTING UP OF A CF$ AT VISAKHAPATNAM APROPOS THE ASSESSEE'S CASE. 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 I? THE ABSENCE OF SPECIFIC AGREEMENT WITH THE CENTRAL/STATE GOVERNNIENT LOCAL AUTHOR/TY OR STATUTORY BODY, THE ASSESSEE IS ENTITLED TO C/AFIN THE BENEFIT OF AFL/N80LA4I. THE ASSESSEE HAD MADE AN APPLICATION FOR SETTING UP OF CFS AT FR/AID/A. -IN RESPONSE TO THE APPLICATION OF THE ASSESSEE, THE DEPARTMENT OF COMMERCE, INFRASTRUCTURE DIVISION, MINISTRY OF COMMERCE AND INDUSTRY APPROVED THE PROPOSAL OF THE ASSESSEE FOR SETTING UP OF CFS AT I-/AID/A FOR HANDING IMPOIT/EXPORT OF CARGO SUBJECT TO EXECUTION OF CERTAIN DOCUMENTS AND COMPLIANCE OF OTHER TERMS AND CONDITIONS AS STATED IN THE LETTER; THE ID. COUNSEL FOR THE ASSESSEE HAS P/ACED ON RECORD LETTER DT. 27-05-2003 FROM THE MINISTRY OF COMMERCE AND INDUSTRY PERMITTING THE ASSESSEE TO SET UP CFS AT FR/AID/A. THE CONTENTS OF THE LETTER ARE REPRODUCED HEREIN BELOW: NOJ6/6/2003-ZNFRA-Z GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPTT. OF COMMERCE INFRASTRUCTURE DIVISION ***** UDYOG BHAWAN, NEW DELHI DATED THE 27TH MAY, 2003. 6 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) TO THE DIRECTOR, M/S. AL LOGICSTICS PVT. LTD, CHENNI. SUBJECT : SETTING UP OF AN CFS AT HALDIA SIR, I AM DIRECTED TO REFER TO YOUR APPLICATION DATED 8.22003 ON THE ABOVE SUBJECT ARID TO SAY MAT THE GOVERNMENT HAS APPROVED YOUR PROPOSAL FOR SETTING UP OF AN CONTAINER FREIGHT STATION AT HALDIA FOR HANDLING IMPORT AND EXPORT CARGO. THE APPROVAL IS SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:- A) THE LETTER OF INTENT HOLDER SHALL TAKE ADEQUATE STEPS TO CREATE PROPER /INFRASTRUCTURE KEEPING IN VIEW THE INDICATIVE NORMS -GIVEN IN PAIRS A & B OF THE GUIDELINES FOR SETTING UP INLAND CONTAINER DEPOTS/ CONTAINER FREIGHT STATIONS (ICDS/CF5) WITHIN A PERIOD OF ONE YEAR FROM THE DATE OF ISSUE OF THIS LETTER. B) NECESSARY BOND AND GUARANTEES, AS REQUIRED, WOULD BE EXECUTED WITH THE CONCERNED COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE. C) THE APPROVAL WOULD BE SUBJECT TO CANCELLATION IN THE EVENT OF VIOLATION OF THE CUSTOMS AND OTHER LAWS OF THE LAND AND RULES. D) A QUARTERLY PROGRESS REPORT OF THE IMPLEMENTATION SHALL BE SENT TO THE MINISTRY OF COMMERCE. E) THE WORKING OF THE CFS WILL BE OPEN TO REVIEW BY THE INTER MINISTERIAL COMMITTEE. F) FORMALITIES IN RESPECT OF ACQUISITION / POSSESSION OF THE LAND SHALL BE COMPLETED WITHIN 60 DAYS AND INTIMATED TO THE M/O COMMERCE, FAILING WHICH THE APPROVAL GRANTED WOULD BE AUTOMATICALLY CANCELLED. 2. THE FACILITY TO BE SET UP SHALL BE FULLY COMPUTERIZED, WITH EDI COMPATIBILITY AND A MINIMUM COMPLEMENT OF EQUIPMENT AND ACCESSORIES AS NECESSARY SHALL BE MADE AVAILABLE AT THE FACILITY. THE INDICATIVE LIST OF EQUIPMENT / ACCESSORIES CONSIDERED NECESSARY IS ANNEXED. THE STATUS REGARDING CONFIRMATION OF THE INSTALLATION / AVAILABILITY OF THE ITEMS SHALL BE FURNISHED TO THE APPROPRIATE AUTHORITIES TO FACILITATE ISSUE OF REQUISITE NOTIFICATION. 3. PLEASE ACKNOWLEDGE RECEIPT OF THIS LETTER. YOURS FAITHFULLY, SD/- (N.G. BISWAS) DIRECTOR A PERUSAL OF CLAUSE 'B' OF THE ABOVE LETTER SHOWS THAT THE ASSESSEE WAS REQUIRED TO EXECUTE NECESSARY BOND AND GUARANTEES WITH THE CONCERNED COMMISSIONER OF CUSTOMS AN CENTRAL EXCISE. IT WAS ONLY ON THE COMPLIANCE OF ALL THE TERMS AND CONDITIONS MENTIONED IN THE AFORESAID LETTER THAT THE ASSESSEE WAS ALLOWED TO CARRY ON THE SERVICES OF CFS. THE ASSESSEE ON THE COMPLIANCE OF THE TERMS AND CONDITIONS AS MENTIONED IN THE LETTER, WAS NOTIFIED AS CFS COMPLEX FOR THE PURPOSE OF RECEIVING, STORING, IMPORT CONTAINERS, 7 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) RECEIVING/CONSOLIDATING EXPORT CARGO ETC. VIDE PUBLIC NOTICE OUO-1L- 2013. THE PUBLIC NOTICES WERE ISSUED BY THE OFFICE OF THE COMMISSIONER OF CUSTOMS (PORT) KOLKATA. 8. THUS, IT IS EVIDENT THAT THE PROPOSAL OF THE ASSESSEE WAS ACCEPTED BY THE GOVERNMENT ON CERTAIN CONDITIONS WHICH WERE DULY COMPLIED WITH BY THE ASSESSEE. THERE MAY NOT BE ANY SPECIFIC AGREEMENT, BUT THE SEQUENCES OF EVENTS CLEARLY SHOW THAT THE ASSESSEE IS PROVIDING CFS FACILITY IN ACCORDANCE WITH THE CONDITIONS LAID DOWN BY THE GOVERNMENT. IN SUCH CIRCUMSTANCES THERE IS NO NEED TO INSIST FOR THE SPECIFIC EXECUTION OF AGREEMENTS. THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF UNITED LINER AGENCIES OF INDIA (P.) LTD (SUPRA), HAS TAKEN A SIMILAR VIEW, WHERE NO SPECIFIC AGREEMENT WITH THE STATE GOVERNMENT WAS ENTERED INTO BUT FROM THE APPROVALS GRANTED TO THE ASSESSEE IT WAS INFERRED THAT ASSESSEE SHOULD BE DEEMED TO HAVE ENTERED INTO AN AGREEMENT WITH THE STATE GOVERNMENT. 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. RESPECTFULLY FOLLOWING THE COORDINATE BENCH ORDER, WE HOLD THAT THE CONTENTION OF THE AO THAT THERE IS NO AGREEMENT AND HENCE THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION IS NOT THE CORRECT POSITION OF LAW. THE HONBLE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION LTD. (SUPRA) HELD AS FOLLOWS: THE TERM INFRASTRUCTURE FACILITY WAS DEFINED IN SECTION 80- IA(12)(CA) OF THE INCOME TAX ACT, 1961, TO MEAN A ROAD, HIGHWAY, BRIDGE, AIRPORT, PORT OR RAIL SYSTEM OR ANY OTHER PUBLIC FACILITY OF A SIMILAR NATURE AS MAY BE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES. THE FINANCE (NO. 2), 1998, INCLUDED THE WORDS INLAND WATER WAYS AND INLAND PORTS IN THE DEFINITION OF INFRASTRUCTURE FACILITY IN SUB-SECTION (12), CLAUSE (CA), WITH EFFECT FROM APRIL 1, 1999. WHEN THE ENTIRE SECTION WAS RECAST AND EVEN AFTER SEVERAL AMENDMENTS WERE THEREAFTER MADE TO THE SECTION, INLAND PORTS CONTINUED TO ENJOY THE DEDEDUCTION AS INFRASTRUCTURE FACILITY. THERE IS NO DEFINITION OF THE WORDS INLAND PORTS IN ANY OF THE DICTIONARIES. BUT THE WORDS INLAND CONTAINER DEPOT WERE INTRODUCED IN SEC. 2(12) OF THE CUSTOMS ACT, 1962, WHICH DEFINES CUSTOMS PORT. THIS WAS BY WAY OF AN AMENDMENT MADE BY THE FINANCE ACT, 1983, WITH EFFECT FROM MAY 13, 1983. SIMULTANEOUSLY, CLAUSE (AA) WAS INSERTED IN SEC. 7(1) OF THE ACT UNDER WHICH THE CCHI ISSUE NOTIFICATION APPOINTING THE PLACES WHICH ALONE SHALL BE CONSIDERED AS INLAND CONTAINER DEPOTS FOR THE UNLOADING OF IMPORTED GOODS AND LOADING OF EXPORTED GOODS. THE CENTRAL BOARD OF EXCISE AND CUSTOMS ISSUED A CLARIFICATION THAT INLAND CONTAINER DEPOTS WERE INLAND PORTS. THE POWER TO NOTIFY INFRASTRUCTURE FACILITIES FOR THE PURPOSE OF THE SECTION WAS TAKEN AWAY FROM THE CENTRAL BOARD OF DIRECT TAXES W.E.F. APRIL 1,2002. HOWEVER, THERE WAS NO PROVISION MADE IN THE ACT SAYING THAT NOTIFICATIONS ISSUED EARLIER WOULD CEASE TO HAVE FROM APRIL 1, 2002.THE ASSESSEE, A PUBLIC SECTOR UNDERTAKING, WAS ENGAGED IN THE BUSINESS OF HANDLING AND 12 TRANSPORTATION OF CONTAINERISED CARGO. THE ACTIVITY OF THE ASSESSEE WAS CARRIED OUT 8 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) MAINLY ON ITS INLAND CONTAINER DEPORTS, CENTRAL FREIGHT STATIONS SEE HAD A TOTAL OF 45 INLAND CONTAINER DEPOTS. IT CLAIMED SPECIAL DEDUCTION UNDER SECTION 80-IA(4) FOR THE ASSESSMENT YEARS 2003-04 TO 2005-06. THE ASSESSING OFFICER DENIED SPECIAL DEDUCTION BUT THE TRIBUNAL ALLOWED IT. ON APPEAL TO THE HIGH COURT: HELD, ALLOWING THE APPEALS, THAT OUT OF THE TOTAL 45 INLAND CONTAINER DEPOTS OPERATED BY THE ASSESSEE, EXCEPT TWO ALL OTHERS WERE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES FOR THE PURPOSE OF SEC. 80IA(12)(CA). HAVING REGARD TO THE PROVISIONS OF THE CUSTOMS ACT, THE COMMUNICATION ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS AS WELL AS THE MINISTRY OF COMMERCE AND INDUSTRY, THE OBJECT OF INCLUDING INLAND PORT AS AN INFRASTRUCTURE FACILITY AND ALSO THAT CUSTOMS CLEARANCE ALSO TAKES PLACE IN THE INLAND CONTAINER DEPOT, THE ASSESSEES CLAIM THAT THE INLAND CONTAINER DEPOTS WERE INLAND PORTS UNDER EXPLANATION (D) TO SEC. 80IA(4) REQUIRED TO BE UPHELD. THE ISSUE HAS ALSO BEEN CLARIFIED BY THE GOVERNMENT VIDE CBEC CIRCULAR NO. 18/2009 DATED 08/06/2009. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE ALLOW THIS APPEAL OF THE ASSESSEE. 4. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE VERY OUTSET, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011-12 AND THE LD.CIT(A) BY FOLLOWING THE ORDER OF THE TRIBUNAL, ALLOWED THE CLAIM UNDER SECTION 80-IA(4) OF THE ACT. HE RELIED UPON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT-II VS. CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD . REPORTED IN [2015] 59 TAXMANN.COM 78 (BOMBAY) AND ALSO THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. A.L. LOGISTICS (P) LTD. REPORTED IN [2015] 55 TAXMANN.COM 283 (MADRAS). 6 . ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 9 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) 8 . THE ONLY ISSUE FOR CONSIDERATION BEFORE US IS WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA(4) OF THE ACT OR NOT? UNDER THE SIMILAR SET OF FACTS FOR THE EARLIER ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2011-12, THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 15/VIZAG/2015, BY ORDER DATED 29/04/2015 HAS CONSIDERED THE FACTS AND OTHER RELEVANT MATERIAL, PASSED A DETAILED ORDER BY HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA(4) OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IS EXTRACTED IS UNDER:- 8. IN CIRCULAR NO. 18/2009 DATED 08/06/2009 ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS IN F.NO. 434/17/2009-CUS.IV THE DIFFERENCE BETWEEN INLAND CONTAINER DEPOTS (ICD) AND CONTAINER FREIGHT STATIONS(CFS) HAS BEEN SPELT OUT IN THE 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 SERVICES FOR HANDLING AND TEMPORARY STORAGE OF IMPORT/EXPORT LADEN AND EMPTY CONTAINERS CARRIED UNDER CUSTOMS CONTROL AND WITH CUSTOMS AND OTHER AGENCIES COMPETENT TO CLEAR GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE-EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT. TRANSHIPMENT OF CARGO CAN ALSO TAKE PLACE FROM SUCH STATIONS. (B) DEFINITION OF CFS: A CONTAINER FREIGHT STATION MAY BE DEFINED AS: CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS. FIRSTLY, CFS DO NOT HAVE 'PUBLIC AUTHORITY STATUS' WHEREAS ICD IS A PLACE THAT ACTS AS A 'SELF CONTAINED CUSTOMS STATION' AS CATEGORICALLY SPELT IN CIRCULAR OF CBEC DT. 08.06.2009. FURTHER THE SAID CIRCULAR CLEARLY DISTINGUISHES ICD AND CFS AND MAKES IT VERY OBVIOUS THAT CFS IS NOTHING BUT A WAREHOUSE. (C) DISTINCTION 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 AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, 10 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) TEMPORARY ADMISSIONS, RE-EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT, TRANSHIPMENT, ETC., TAKES PLACE.' 'CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS'. AN ICD IS A 'SELF CONTAINED CUSTOMS STATION' LIKE A PORT OR AIR CARGO UNIT WHERE FILING OF CUSTOMS MANIFESTS, BILLS OF ENTRYS, SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE-EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT, TRANSSHIPMENT, ETC., TAKE PLACE. AN ICD WOULD HAVE ITS OWN AUTOMATED SYSTEM WITH A SEPARATE STATION CODE [SUCH AS INTKD 6, INSNF6 ETC.] BEING ALLOTTED BY DIRECTORATE GENERAL OF SYSTEMS AND WITH IN-BUILT CAPACITY TO ENTER EXAMINATION REPORTS AND ENABLE ASSESSMENT OF DOCUMENTS, PROCESSING OF MANIFEST, AMENDMENTS, ETC. CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS. A CFS IS ONLY A CUSTOMS AREA LOCATED IN THE JURISDICTION OF A COMMISSIONER OF CUSTOMS EXERCISING CONTROL OVER A SPECIFIED CUSTOMS PORT, AIRPORT, LCS/LCD. A CFS CANNOT HAVE AN INDEPENDENT EXISTENCE AND HAS TO BE LINKED TO A CUSTOMS STATION WITHIN THE JURISDICTION OF THE COMMISSIONER OF 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 CUSTOMS BESIDES STUFFING/DESTUFFING OF CONTAINERS AND AGGREGATION/SEGREGATION OF CARGO. THUS, CUSTOM'S FUNCTIONS RELATING TO PROCESSING OF MANIFEST, IMPORT/EXPORT DECLARATIONS AND ASSESSMENT OF BILL OF ENTRY/SHIPPING BILL ARE PERFORMED IN THE CUSTOM HOUSE/CUSTOM OFFICE THAT EXERCISES JURISDICTION OVER THE PARENT PORT/AIRPORT/ICD/LCS TO WHICH THE SAID CFS IS ATTACHED. IN THE CASE OF CUSTOMS STATIONS HAVING FACILITY OF AUTOMATED PROCESSING OF DOCUMENTS, TERMINALS ARE PROVIDED AT SUCH CFSS FOR RECORDING THE RESULT OF EXAMINATION, ETC. IN SOME CFSS, EXTENSION SERVICE CENTERS ARE AVAILABLE FOR FILING DOCUMENTS, AMENDMENTS ETC. HOWEVER, THE ASSESSMENT OF THE DOCUMENTS ETC. IS CARRIED OUT CENTRALLY. AN ICD MAY ALSO HAVE A NUMBER OF CFSS ATTACHED TO IT WITHIN THE JURISDICTION OF THE COMMISSIONER OF CUSTOMS JUST AS IN THE CASE OF A PORT AND ITS CFSS (AS ON DATE THERE ARE 28 CFSS LINKED TO CHENNAI PORT) [REFER CIRCULAR NO. 18/2009-CUS. , DATED 8- 6-2009]. A STANDALONE CUSTOMS CLEARANCE FACILITY IN AN INLAND COMMISSIONERATE CANNOT BE APPROVED BY THE COMMISSIONER AS A CFS, IF THERE IS NO ICD/PORT WITHIN ITS JURISDICTION TO WHICH THE SAID CFS CAN BE ATTACHED. SUCH A FACILITY CAN, HOWEVER, BE NOTIFIED AS AN ICD I.E., AS AN INDEPENDENT CUSTOMS STATION WITH PROVISION FOR FILING AND ASSESSMENT OF DOCUMENTS AND EXAMINATION OF GOODS. A CUSTOMS CLEARANCE FACILITY COULD BE ESTABLISHED AS A CFS AT A PORT CITY FOR EXAMINATION OF IMPORTED/EXPORT GOODS, SINCE THE CFS WOULD FALL 11 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) UNDER THE JURISDICTION OF COMMISSIONER OF CUSTOMS, HAVING JURISDICTION OVER THE CUSTOMS PORT WITH WHICH THE CFS WOULD BE ATTACHED. FURTHER, IN A PORT CITY SUCH AS CHENNAI OR MUMBAI, IT MAY BE POSSIBLE TO DEVELOP AN ICD WITHIN THE TERRITORIAL JURISDICTION OF THE CONCERNED CUSTOMS COMMISSIONERATE IN ADDITION TO EXISTING CFSS. SUCH AN ICD SHOULD BE CAPABLE OF PROVIDING FULL-FLEDGED CUSTOMS SERVICES, INDEPENDENT EDI SYSTEM, AND ALL PROCEDURES MEANT FOR TRANSHIPMENT OF CARGO HAVE TO BE FOLLOWED FOR MOVEMENT OF GOODS FROM THE PORT OF IMPORT TO THE ICD. FURTHER, SUCH AN ICD WOULD FUNCTION AS AN INDEPENDENT CUSTOMS STATION IN ALL RESPECTS AND WOULD NOT BE ATTACHED TO ANY OTHER PORT OR AIRPORT. THUS, IN RESPECT OF PROPOSALS FOR SETTING UP OF ICD/CONTAINER FREIGHT STATION FROM PROSPECTIVE OPERATORS IT HAS TO BE EXAMINED WHETHER THE PROPOSED FACILITY IS REQUIRED TO BE APPROVED AS AN ICD OR CFS. MOVEMENT OF GOODS FROM A PORT/AIRPORT/LCS TO AN ICD IS IN THE NATURE OF MOVEMENT FROM ONE CUSTOMS STATION TO ANOTHER, GOVERNED BY GOODS IMPORTED (CONDITION OF TRANSHIPMENT) REGULATIONS, 1995. ON THE OTHER HAND, MOVEMENT OF GOODS FROM A PORT/AIRPORT/LCS OR AN ICD TO A CFS IS AKIN TO LOCAL MOVEMENT FROM A CUSTOMS AREA OF THE CUSTOMS STATION TO ANOTHER CUSTOMS AREA OF THE SAME STATION, COVERED BY LOCAL PROCEDURE EVOLVED BY THE COMMISSIONER OF CUSTOMS AND COVERED BY BONDS, BANK GUARANTEE, ETC. FURTHER, THE PERSON UNDERTAKING THE TRANSHIPMENT WOULD BE REQUIRED TO FOLLOW THE PRESCRIBED PROCEDURE. AS RIGHTLY CONTENDED BY THE LEARNED AR OF THE APPELLANT, THE ABOVE CIRCULAR ANSWERS IN A VERY CLEAR AND CATEGORICAL MANNER THE OBJECTIONS RAISED BY THE ASSESSING OFFICER. 9. AS FAR AS THE CONTENTION THAT THERE IS NO AGREEMENT WITH ANY GOVERNMENT OR STATUTORY AUTHORITY, WE FIND THAT THE ASSESSEE HAS PLACED ON RECORD LETTER OF INTENT. IN FACT THE MINISTRY OF COMMERCE AND INDUSTRY, VIDE LETTER DATED 10/02/2005, WRITTEN TO THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY REGARDING SETTING UP OF A CFS AT VISAKHAPATNAM APROPOS THE ASSESSEES CASE. 10. IN THE CASE OF A L LOGISTICS P. LTD. (SUPRA) THE CHENNAI BENCH OF THE TRIBUNAL AT PARA 7 HELD AS FOLLOWS: 7. NOW, WE PROCEED TO THE NEXT ISSUE, WHETHER IN THE ABSENCE OF SPECIFIC AGREEMENT WITH THE CENTRAL/STATE GOVERNMENT, LOCAL AUTHORITY OR STATUTORY BODY, THE ASSESSEE IS ENTITLED TO CLAIM THE BENEFIT OF SECTION 80IA(4)(I)? THE ASSESSEE HAD MADE AN APPLICATION FOR SETTING UP OF CFS AT HALDIA. IN RESPONSE TO THE APPLICATION OF ASSESSEE, THE DEPARTMENT OF COMMERCE, INFRASTRUCTURE DIVISION, MINISTRY OF COMMERCE AND INDUSTRY APPROVED THE PROPOSAL OF THE ASSESSEE FOR SETTING UP OF CFS AT HALDIA FOR HANDLING IMPORT/EXPORT OF CARGO SUBJECT TO EXECUTION OF CERTAIN DOCUMENTS AND COMPLIANCE OF OTHER TERMS AND CONDITIONS AS STATED IN THE LETTER. THE ID. COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD LETTER DT.27-05-2003 FROM THE MINISTRY OF COMMERCE AND INDUSTRY PERMITTING THE ASSESSEE TO SET UP CFS AT RALDIA. THE CONTENTS OF THE LETTER ARE REPRODUCED HEREIN BELOW: 'NO. 16/6/2003-LNFRA-I GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY 12 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) DEPTT. OF COMMERCE INFRASTRUCTURE DIVISION UDYOG BHAWAN, NEW DELHI, DATED THE 27 TH MAY,2003. TO THE DIRECTOR, M/S A L LOGISTICS PVT. LTD., CHENNAI. SUBJECT: SETTING UP OF AN CFS AT HALDIA. SIR, I AM DIRECTED TO REFER TO YOUR APPLICATION DATED 8.2.2003 ON THE ABOVE SUBJECT AND TO SAY THAT THE GOVERNMENT HAS APPROVED YOUR PROPOSAL FOR SETTING UP OF AN CONTAINER FREIGHT STATION AT HALDIA FOR HANDLING IMPORT AND EXPORT CARGO. THE APPROVAL IS SUBJECT TO T LE FOLLOWING TERMS AND CONDITIONS:- (A) THE LETTER OF INTENT HOLDER SHALL TAKE ADEQUATE STEPS TO CREATE PROPER INFRASTRUCTURE KEEPING IN VIEW THE INDICATIVE NORMS GIVEN IN PARTS A& B OF THE GUIDELINES FOR SETTING UP INLAND CONTAINER DEPOTS I CONTAINER FREIGHT STATIONS (ICDS/CFS) WITHIN A PERIOD OF ONE YEAR FROM THE DATE OF ISSUE OF THIS LETTER. (B) NECESSARY BOND AND GUARANTEES, AS REQUIRED, WOULD BE EXECUTED WITH THE CONCERNED COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE. (C) THE APPROVAL WOULD BE SUBJECT TO CANCELLATION IN THE EVENT OF VIOLATION OF THE CUSTOMS AND OTHER LAWS OF THE LAND AND RULES. (D) A QUARTERLY PROGRESS REPORT OF THE IMPLEMENTATION SHALL BE SENT TO THE MINISTRY OF COMMERCE. (E) THE WORKING OF THE CFS WILL BE OPEN TO REVIEW BY THE INTER MINISTERIAL COMMITTEE. (F) FORMALITIES IN RESPECT OF ACQUISITION/POSSESSION OF THE LAND SHALL BE COMPLETED WITHIN 60 DAYS AND INTIMATED TO THE MLO COMMERCE, FAILING WHICH THE APPROVAL GRANTED WOULD BE AUTOMATICALLY CANCELLED. 2. THE FACILITY TO BE SET UP SHALL BE FULLY COMPUTERIZED, WITH EDI COMPATIBILITY AND A MINIMUM COMPLEMENT OF EQUIPMENT AND ACCESSORIES AS NECESSARY SHALL BE MADE AVAILABLE AT THE FACILITY. THE INDICATIVE LIST OF EQUIPMENT/ACCESSORIES CONSIDERED NECESSARY IS ANNEXED. THE STATUS REGARDING CONFIRMATION OF THE INSTALLATION! AVAILABILITY OF THE ITEMS SHALL BE FURNISHED TO THE APPROPRIATE AUTHORITIES TO FACILITATE ISSUE OF REQUISITE NOTIFICATION. 3. PLEASE ACKNOWLEDGE RECEIPT OF THIS LETTER. YOURS FAITHFULLY, SD/- (N.G. BISWAS) DIRECTOR' A PERUSAL OF CLAUSE 'B' OF THE ABOVE LETTER SHOWS THAT THE ASSESSEE WAS REQUIRED TO EXECUTE NECESSARY BOND AND GUARANTEES WITH THE CONCERNED COMMISSIONER OF CUSTOMS AN CENTRAL EXCISE. IT WAS ONLY ON THE COMPLIANCE OF ALL THE TERMS AND CONDITIONS MENTIONED IN THE AFORESAID LETTER THAT THE ASSESSEE WAS ALLOWED TO CARRY ON THE SERVICES OF CFS. THE ASSESSEE ON THE COMPLIANCE OF THE TERMS AND CONDITIONS AS MENTIONED IN THE LETTER, WAS NOTIFIED AS CFS COMPLEX FOR THE PURPOSE OF RECEIVING, STORING, IMPORT CONTAINERS, RECEIVING/CONSOLIDATING EXPORT CARGO ETC. VIDE PUBLIC NOTICE OUO-1L- 2013. THE PUBLIC NOTICES WERE ISSUED BY THE OFFICE OF THE COMMISSIONER OF CUSTOMS (PORT) KOLKATA. 13 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) 8. THUS, IT IS EVIDENT THAT THE PROPOSAL OF THE ASSESSEE WAS ACCEPTED BY THE GOVERNMENT ON CERTAIN CONDITIONS WHICH WERE DULY COMPLIED WITH BY THE ASSESSEE. THERE MAY NOT BE ANY SPECIFIC AGREEMENT, BUT THE SEQUENCES OF EVENTS CLEARLY SHOW THAT THE ASSESSEE IS PROVIDING CFS FACILITY IN ACCORDANCE WITH THE CONDITIONS LAID DOWN BY THE GOVERNMENT. IN SUCH CIRCUMSTANCES THERE IS NO NEED TO INSIST FOR THE SPECIFIC EXECUTION OF AGREEMENTS. THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF UNITED LINER AGENCIES OF INDIA (P.) LTD (SUPRA), HAS TAKEN A SIMILAR VIEW, WHERE NO SPECIFIC AGREEMENT WITH THE STATE GOVERNMENT WAS ENTERED INTO BUT FROM THE APPROVALS GRANTED TO THE ASSESSEE IT WAS INFERRED THAT ASSESSEE SHOULD BE DEEMED TO HAVE ENTERED INTO AN AGREEMENT WITH THE STATE GOVERNMENT. 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 ORDER, WE HOLD THAT THE CONTENTION OF THE AO THAT THERE IS NO AGREEMENT AND HENCE THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION IS NOT THE CORRECT POSITION OF LAW. 12. THE HONBLE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION LTD. (SUPRA) HELD AS FOLLOWS: THE TERM INFRASTRUCTURE FACILITY WAS DEFINED IN SECTION 80- IA(12)(CA) OF THE INCOME TAX ACT, 1961, TO MEAN A ROAD, HIGHWAY, BRIDGE, AIRPORT, PORT OR RAIL SYSTEM OR ANY OTHER PUBLIC FACILITY OF A SIMILAR NATURE AS MAY BE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES. THE FINANCE (NO. 2), 1998, INCLUDED THE WORDS INLAND WATER WAYS AND INLAND PORTS IN THE DEFINITION OF INFRASTRUCTURE FACILITY IN SUB-SECTION (12), CLAUSE (CA), WITH EFFECT FROM APRIL 1, 1999. WHEN THE ENTIRE SECTION WAS RECAST AND EVEN AFTER SEVERAL AMENDMENTS WERE THEREAFTER MADE TO THE SECTION, INLAND PORTS CONTINUED TO ENJOY THE DEDEDUCTION AS INFRASTRUCTURE FACILITY. THERE IS NO DEFINITION OF THE WORDS INLAND PORTS IN ANY OF THE DICTIONARIES. BUT THE WORDS INLAND CONTAINER DEPOT WERE INTRODUCED IN SEC. 2(12) OF THE CUSTOMS ACT, 1962, WHICH DEFINES CUSTOMS PORT. THIS WAS BY WAY OF AN AMENDMENT MADE BY THE FINANCE ACT, 1983, WITH EFFECT FROM MAY 13, 1983. SIMULTANEOUSLY, CLAUSE (AA) WAS INSERTED IN SEC. 7(1) OF THE ACT UNDER WHICH THE CCHI ISSUE NOTIFICATION APPOINTING THE PLACES WHICH ALONE SHALL BE CONSIDERED AS INLAND CONTAINER DEPOTS FOR THE UNLOADING OF IMPORTED GOODS AND LOADING OF EXPORTED GOODS. THE CENTRAL BOARD OF EXCISE AND CUSTOMS ISSUED A CLARIFICATION THAT INLAND CONTAINER DEPOTS WERE INLAND PORTS. THE POWER TO NOTIFY INFRASTRUCTURE FACILITIES FOR THE PURPOSE OF THE SECTION WAS TAKEN AWAY FROM THE CENTRAL BOARD OF DIRECT TAXES W.E.F. APRIL 1,2002. HOWEVER, THERE WAS NO PROVISION MADE IN THE ACT SAYING THAT NOTIFICATIONS ISSUED EARLIER WOULD CEASE TO HAVE FROM APRIL 1, 2002.THE ASSESSEE, A PUBLIC SECTOR UNDERTAKING, WAS ENGAGED IN THE BUSINESS OF HANDLING AND 12 TRANSPORTATION OF CONTAINERISED CARGO. THE ACTIVITY OF THE ASSESSEE WAS CARRIED OUT MAINLY ON ITS INLAND CONTAINER DEPORTS, CENTRAL FREIGHT STATIONS SEE HAD A TOTAL OF 45 INLAND CONTAINER DEPOTS. IT CLAIMED SPECIAL DEDUCTION UNDER SECTION 80-IA(4) FOR THE ASSESSMENT YEARS 2003-04 TO 2005-06. THE ASSESSING OFFICER DENIED 14 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) SPECIAL DEDUCTION BUT THE TRIBUNAL ALLOWED IT. ON APPEAL TO THE HIGH COURT: HELD, ALLOWING THE APPEALS, THAT OUT OF THE TOTAL 45 INLAND CONTAINER DEPOTS OPERATED BY THE ASSESSEE, EXCEPT TWO ALL OTHERS WERE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES FOR THE PURPOSE OF SEC. 80IA(12)(CA). HAVING REGARD TO THE PROVISIONS OF THE CUSTOMS ACT, THE COMMUNICATION ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS AS WELL AS THE MINISTRY OF COMMERCE AND INDUSTRY, THE OBJECT OF INCLUDING INLAND PORT AS AN INFRASTRUCTURE FACILITY AND ALSO THAT CUSTOMS CLEARANCE ALSO TAKES PLACE IN THE INLAND CONTAINER DEPOT, THE ASSESSEES CLAIM THAT THE INLAND CONTAINER DEPOTS WERE INLAND PORTS UNDER EXPLANATION (D) TO SEC. 80IA(4) REQUIRED TO BE UPHELD. 13. THE ISSUE HAS ALSO BEEN CLARIFIED BY THE GOVERNMENT VIDE CBEC CIRCULAR NO. 18/2009 DATED 08/06/2009. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE ALLOW THIS APPEAL OF THE ASSESSEE. 9 . INSOFAR AS CASE LAWS RELIED ON BY THE ASSESSEE IS CONCERNED, IN THE CASE OF A.L. LOGISTICS (P) LTD. (SUPRA), THE HON'BLE MADRAS HIGH COURT HELD THAT PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS (INFRASTRUCTURE FACILITY), CONTAINER FREIGHT STATION IS PART OF INLAND PORT AND, THEREFORE, IS AN INFRASTRUCTURE FACILITY, AS DEFINED IN EXPLANATION TO SECTION 80-IA(4)(I) OF THE ACT, ASSESSEE IS ELIGIBLE FOR DEDUCTION. IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA), THE HON'BLE BOMBAY HIGH COURT HAS HELD THAT PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS (INFRASTRUCTURE FACILITY), SET UP WITHIN PRECINCTS OF PORT, THEN, HAVING CONSIDERED ITS PROXIMITY TO SEA-PORT AND ITS ACTIVITIES, IT CAN BE SAFELY CONCLUDED THAT DEDUCTION ADMISSIBLE UNDER SUB-SECTION (4) OF SECTION 80-IA CAN BE CLAIMED BY BOTH ICDS AND CFSS. 10. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY FOLLOWING THE DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011-12 IN ITA NO. 15/VIZAG/2015, BY ORDER DATED 29/04/2015 AND ALSO 15 ITA NO.178/VIZ/2016 (M/S. GATEWAY EAST INDIA PVT. LTD.) THE DECISIONS OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA) AND THE HON'BLE MADRAS HIGH COURT IN THE CASE OF A.L. LOGISTICS (P) LTD. (SUPRA), THE APPEAL FILED BY THE REVENUE IS DISMISSED. 11 . IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF APRIL, 2017. SD/- SD/- (G. MANJUNATHA) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 TH APRIL, 2017. VR/- COPY TO: 1. THE ASSESSEE M/S. GATEWAY EAST INDIA PVT. LTD., CONTAINER FREIGHT STATION, VPT EXIM PARK, OPP: GAIL, SHEELA NAGAR, VISAKHAPATNAM. 2. THE REVENUE - DCIT, CIRCLE-3(1), VISAKHAPATNAM. 3. THE PCIT, VISAKHAPATNAM. 4. THE CIT(A)-1, VISAKHAPATNAM. 5. THE D.R., VISAKHAPATNAM. 6. GUARD FILE. BY ORDER