ITO, Ward-3(1), Hyderabad, Hyderabad V. M/s Sealion Sparkle Maritime Services Limited, Hyderabad

ITA 1864/HYD/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2944 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 09-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: V RAMAKRISHNA
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1864/HYD/2014 ASSESSMENT YEAR: 2010-11 THE INCOME TAX OFFICER, WARD 3(1), HYDERABAD VS. M/S SEALION SPARKLE MARITIME SERVICES LTD., HYDERABAD. PAN AAHCS 0839F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI B. KURMI NAIDU ASSESSEE BY : SHRI V. RAMA KRISHNA DATE OF HEARING 01-02-2016 DATE OF PRONOUNCEMENT 05-02-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) - IV, HYDERABAD, DATED 24/10/2014 FOR TH E AY 2010-11. 2. BRIEF FACTS ARE, THE ASSESSEE, A COMPANY ENGAGED IN THE BUSINESS OF O&M OF PORTS AND OPERATING OF SHIPS, HA D FILED ITS RETURN OF INCOME FOR THE AY 2010-11, DECLARED TOTAL INCOME OF RS. 15,60,499/- AFTER CLAIMING DEDUCTION U/S 80IA FOR R S. 55,37,852/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AN D TOTAL INCOME WAS DETERMINED AT RS. 34,89,640/- BY THE AO IN THE ASSESSMENT MADE U/S 143(3) VIDE ORDER DATED 28/03/13 AFTER DISALLOW ING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IA. 2 ITA NO. 1864/HYD/2014 SEALION SPARKLE MARITIME SERVICES LTD., HYD. 3. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED APPEAL BEFORE CIT(A). THE CIT(A) ALLOWED ASSESSEES CLAIM OF DEDUCTION U/S 80IA RELYING ON THE DECISION OF THE COORDINATE BENC H OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO. 697/H/2010, F OR AY 2006-07 ORDER DATED 30/09/2013. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL: I) THE LD. CIT(A) ERRED BOTH IN LAW AND ON FACTS. II) THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE F ACT THAT THE ASSESSEE HAS FAILED TO COMPLY WITH CONDITIONS REQU IRED AS PER SUB-SECTION (A) TO (C) OF 80IA(4) OF THE ACT. III) THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE IS NOT ENGAGED IN THE ACTIVITY OF OPERATI NG AND MAINTAINING A PORT, AND THE ACTIVITY OF THE ASSESS EE IS LIMITED MERELY TO RENTING OUT THE TUG BOATS, PILOT LAUNCHE S AND MOORING LAUNCHES FOR USE BY ENNORE PORT LTD. 5. THE LD. DR RELIED ON THE ORDER OF AO. 6. THE LD. AR SUBMITTED THAT THE DISALLOWANCE MADE BY THE AO WAS ALREADY COVERED BY THE DECISION OF THE ITAT IN ASSE SSEES OWN CASES FOR EARLIER YEARS. 7. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIAL ON RECORD. WE FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERATIO N BEFORE THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEARS. THE COORDINATE BENCH FOR AY 2006-07 (SUPRA), HAS HELD AS FOLLOWS: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSE SSEE IS A JOINT VENTURE 3 ITA NO. 1864/HYD/2014 SEALION SPARKLE MARITIME SERVICES LTD., HYD. COMPANY OF M/S. OCEAN SPARKLE LTD. ASSESSEE ENTERE D INTO AN AGREEMENT WITH M/S. ENNORE PORT LTD. FOR MAINTENAN CE AND OPERATION. AS RIGHTLY SUBMITTED BY THE LEARNED REPRESENTATIVE FO R THE ASSESSEE FOR THE ASSESSMENT YEAR 2003-04 IN ITA NO.238/HYD/2007, IN THE CASE OF M/S. OCEAN SPARKLE LIMITED, AFTER CONSIDERING SIMILAR A GREEMENT WITH M/S. ENNORE PORT LTD., THIS TRIBUNAL, VIDE ITS ORDER DA TED 18.7.2008, FOUND THAT THE ASSESSEE HAS COMPLIED WITH ALL THE THREE CONDI TIONS PRESCRIBED UNDER S.80IA(4) OF THE ACT. ONE OF US, THE JUDICIAL MEMB ER, WAS A PARTY TO THE ORDER OF THE TRIBUNAL DATED 18.7.2008. THIS TRIBUN AL AFTER EXAMINING THE AGREEMENT ENTERED INTO WITH M/S. ENNNORE PORT LTD. WITH SIMILAR TERMS AND CONDITIONS FOR CARRYING OUT SIMILAR ACTIVITY F OUND THAT THE ASSESSEE WAS ENTITLED FOR DEDUCTION U/S. 80IA PROVIDED M/S. ENNORE PORT LTD. HAS NOT AVAILED THE SAME DEDUCTION UNDER S.80IA OF THE ACT. IN THE CASE BEFORE US ALSO, INSTEAD OF M/S. OCEAN SPARKLE LIMI TED, ASSESSEE, A JOINT VENTURE COMPANY OF M/S. OCEAN SPARKLE LIMITED. ENT ERED INTO AGREEMENT WITH SIMILAR TERMS AS IN THE CASE OF M/S. OCEAN SP ARKLE LIMITED AND M/S. ENNORE PORT LTD. HAS GIVEN A CERTIFICATE STAYING T HAT THE ACTIVITY OF THE ASSESSEE AMOUNTS TO OPERATION AND MAINTENANCE OF E NNORE PORT. IN THE CIRCUMSTANCES, HEREFORE, AS FOUND BY THIS TRIBUNAL IN THE CASE OF M/S. OCEAN SPARKLE LIMITED, THE ASSESSEE HAS COMPLIED W ITH ALL THE THREE CONDITIONS REQUIRED FOR DEDUCTION UNDER S.80IA(4) OF THE INCOME TAX ACT. THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER S.80IA, PROVIDED M/S. ENNORE PORT LTD. HAS NOT AVAILED THE SAID REL IEF FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IN VIEW OF THE ABOVE DIS CUSSION, WE ARE UNABLE TO SUSTAIN THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDERS OF THE L OWER AUTHORITIES ON THIS ISSUE, AND DIRECT THE ASSESSING OFFICER TO AL LOW ASSESSEE'S CLAIM FOR DEDUCTION UNDER S.80IA OF THE ACT, IF M/S. ENNORE PORT LTD. HAS NOT AVAILED THE SAME FOR THE YEAR UNDER CONSIDERATION. 7.1 MOREOVER, THE COORDINATE BENCH IN THE GROUP CAS E OF M/S SEALION SPARKLE PORT & TERMINAL SERVICES (DAHEJ) LT D., HYDERABAD IN ITA NO. 1195/HYD/2015 FOR AY 2012-13 VIDE ORDER DAT ED 20/11/15 UPHELD THE ORDER OF THE CIT(A) IN ALLOWING THE ASSE SSEES CLAIM OF DEDUCTION U/S 80IA FOLLOWING THE ORDERS OF ITAT IN ASSESSEES OWN CASE. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE CIT(A) IN ALLOWING THE GROUND RAISED BY THE ASSESSEE FOLLO WING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSE ES OWN CASE FOR AY 2006-07 (SUPRA) AND ACCORDINGLY, WE UPHOLD THE O RDER OF CIT(A) DISMISSING THE APPEAL FILED BY REVENUE. 4 ITA NO. 1864/HYD/2014 SEALION SPARKLE MARITIME SERVICES LTD., HYD. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 5 TH FEBRUARY, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 5 TH FEBRUARY, 2016 KV COPY TO:- 1) ITO, WARD 3(1), 7 TH FLOOR, B-BLOCK, IT TOWERS, AC GUARDS, HYDERABAD 2) M/S SEALION SPARKLE MARITIME SERVICES LTD., 128, 1 ST FLOOR, SRINIGAR COLONY, HYDERABAD 500 073. 3) CIT (A)- IV , HYDERABAD. 4) CIT III, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.