AI Insights
The case revolves around the dispute concerning the eligibility of Allcargo Logistic Ltd to claim deductions under section 80IA(4)(i) of the Income Tax Act, 1961, for the assessment year 2017-18. The revenue challenged the CIT(A)'s decision which allowed the deduction claimed by Allcargo Logistic Ltd, arguing that the activities undertaken by the assessee did not fall under the specified section of the Act. The Tribunal examined the submissions, the legal provisions, and relevant judicial precedents, ultimately supporting the CIT(A)'s decision and dismissing the revenue's appeal.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 124812 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 4 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-03-2023
Appeal Filed By
Department
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
09-01-2023
Assessment Year
2017-2018
Appeal Filed On
07-11-2021
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI BASKARAN BR, ACCOUNTANT MEMBER & SHIR PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No. 2046/Mum/2021 (A.Y: 2017-18) DCIT C.CIR 8(1), Room No. 656, 6 th Floor, Aayakar Bhavan, MK Road, Mumbai – 400020. Vs. All cargo Logistic Ltd 6 th Floor, Avvashya House, CST Road, Kalina, Santacruz (E), Mumbai – 400098. ./ज आइआर ./PAN/GIR No. : AACCA2894D Appellant .. Respondent Appellant by : Mr.Manoj Kumar Sinha.DR Respondent by : Mr.Madhur Agrawal, Mr Fenil Bhatt & Mr. Chimanlal Dangi.AR Date of Hearing 10.01.2023 Date of Pronouncement 20.02.2023 आद श / O R D E R PER PAVAN KUMAR GADALE JM: The revenue has filed the appeal against the order of the Commissioner of Income Tax (Appeals)-50, Mumbai, passed u/s 250 of the Act. The revenue has raised the fallowing grounds of appeal: 1. "Whether on the facts and in the circumstances of the case and in law, the Ld.. CIT(A) is justified in holding that the assesse was entitled to deduction of Rs. 4,04,83,352/- under section 80-IA of the Income Tax Act, 1961 even ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 2 - though activities undertaken by the assessee do not fall section 80-IA(4) of the I.T.Act, 19613 2. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in interpreting the phrase "on its behalf" in first proviso to sub section 4 of section 801A as "on behalf of the transferee" as against "on behalf" 2. The brief facts of the case are that the assessee company is engaged in the business of operating and maintaining container freight station (CFS), Mundra Chennai and JNPT Munro. The assessee has filed the return of income for the A.Y 2017-18 on 23.11.2017 disclosing a total income of Rs.106,95,00,730/- and claimed deduction u/s 80IA(4)(i) of the Act, further the assessee has filed the revised return of income disclosing a total income of Rs.107,26,81,550/-. Subsequently, the case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act along with questionnaire was issued through ITBA System.In compliance, the assessee has filed the copy of return of income, audited report, Audited Profit &Loss account, Balance sheet and enclosures etc. The Assessing Officer (AO) on perusal of the submissions filed by the assessee find that the assessee has claimed deduction u/s 80IA(4)(i) of the Act of Rs. ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 3 - 53,49,63,560/- which includes deduction u/s 80IA(4)(i) of Rs. 11,86,17,663/- in respect of Mundra CFS being 8 th year of claim of deduction. and Rs. 37,58,62,545/- in respect of Chennai CFS division being 9 th year claim of deduction and the deduction u/s 80IA(4)(i) of the Act of Rs. 4,04,83,352/- is claimed in respect of CFS divisions, NPT Uran being the 1 st year of claim of deduction restricted only for 3 months after acquisition of the business of M/s Transindia Logistic Part Pvt Ltd under a Slump Sale business agreement. 3. The AO has called for the various details/ clarifications on the claims. The assessee has explained that it has purchased/ acquired M/s Trans india Logistic Part Pvt Ltd, which is a wholly owned subsidiary notified as Custodian of container freight station(CFS) through the transfer agreement for total consideration of Rs. 80,49,75,526/- as Slump Sale. Whereas M/s Transindia Logistic Part Ltd was notified as custodian of container fright station (CFS) as per notification No. 11/2012 dated 05.09.2012, thereafter the company has informed the Customs Department about the Slump Sale agreement dated 11.08.2016 ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 4 - executed. The A.O. considering the facts has called for the details referred at Para 5 of the assessment order, whereas the assessee has filed the reply and explained the nature of transactions and the financial aspects, provisions and judicial decisions vide letter dated 20.12.2019 referred at Para 6 of the order. 4. The AO has dealt on the explanations, details and information and was not satisfied with the claim as the assessee has purchased wholly owned subsidiary M/s Transindia Logistics Park Pvt Ltd vide business transfer agreement under Slump Sale and as per the agreement undertaking includes transferor’s business along with the associated assets and liabilities and made interpretations on the claim of deduction u/s 80IA(4)(i) of the Act. The AO observed that the assessee has acquired the CFS as a going concern and the eligibility criteria u/s 80IA(4) of the Act was not fulfilled as the infrastructure facility of the assessee is not a new infrastructure facility which was already been in use by M/s Transindia Logistic Park Pvt Ltd. Finally, the AO was not satisfied the claim of deduction u/s 80IA(4)(i) of the Act in respect of the ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 5 - transaction of CFS Uran as the assessee company neither developed new infrastructure nor operating and maintaining the infrastructure of the transferor company observed at Para 8.5 to 9 of the order and restricted the deduction u/s 80IA of the Act to the extent of Rs. 49,44,80,208/- as against Rs53,49,63,560/- claimed by the assessee and assessed the total income of Rs. 111,31,64,900/- and passed the order u/s 143(3) of the Act dated 30.12.2019. 5. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas the CIT(A) has considered the grounds of appeal, submissions of the assessee, findings of the AO and the CIT(A) has accepted the additional evidence filed. Whereas the CIT(A) has called for the remand report from the AO referred at Para 5.4 of the order and the AO in compliance has filed the remand report referred at Para 5.5 of the order. The CIT(A) dealt on the facts of the case, submissions of the AO in the remand report, rejoinder and discussed exhaustively on the provisions of the Act and circulars and deleted the disallowance made u/s 80IA(4)(i) of the Act and ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 6 - partly allowed the assessee appeal. Aggrieved by the CIT(A) order, the revenue has filed the appeal with the Honble Tribunal. 6. At the time of hearing, the Ld. DR submitted that the CIT(A) has erred in granting the relief to the assessee irrespective of the fact that the assessee has not fulfilled criteria of claim u/s 80IA(4) of the Act and the two different ownerships of CFS in the same financial year ,which invalid the claim of deduction U/sec 80IA(4)(i) of the Act. Further the CIT(A) has misinterpreted the facts and provisions and the case laws relied are distinguishable and the Ld.DR relied on the order of the A.O. and prayed for allowing the revenue appeal. Per Contra, the Ld.AR submitted that the assessee has satisfied the eligibility norms as per the provisions of the Act and circulars and rightly claimed the deduction and substantiated the submissions with the voluminous paper books and catena of judicial decisions and supported the order of the CIT(A). 7. We heard the rival submissions and perused the material on record. The sole matrix of the disputed ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 7 - issue that the CIT(A) has erred in allowing the deduction u/s 80IA(4)(i) of the Act in respect of CFS Urvan overlooking the findings of the A.O. and the asssesee has not fulfilled the criteria of claim under the provisions of the Act. At this Juncture, we consider it appropriate to refer to the observations of the CIT(A) in granting the relief dealt at Page 31 Para 7.4.1 to 7.4.11 of the order read as under: 7.4.1 I have considered the submissions of the appellant and perused the materials available on record. The appellant has requested to delete the impugned disallowance made u/s 801A(4) of the Act at Rs.4,04,83,352/-. The appellant has made elaborate submissions and the same are considered carefully. The appellant's main contentions are that they have fulfilled all the conditions stipulated in sec 801A(4) of the Act and hence are eligible for deduction u/s 80IA(4) of the Act. 7.4.2 From perusal of impugned order, it is observed that the Ld. AO has given a factual finding that during the year under consideration the appellant through Transfer Business Agreement (TBA), the appellant company has purchased/acquired a Container Freight Station (CFS) from its wholly owned subsidiary M/s Transindia Logistic Park P Ltd under "Slump Sale". The Ld. AO has also noted that M/s Transindia Logistic P Ltd was notified as "Custodian for container freight station" (CFS) as per Notification No. 11/2012 dated 05.09.2012 issued by the Office of the Commissioner of Customs (Export)-JNPT, Nahavasheva and thereafter, the assessee company has informed the Customs Department about the Slump Sale agreement dated 11.08.2016 executed between M/s Transindia Logistic P Ltd and M/s Allcargo Logistics P Ltd and on the basis of same, the appellant company was ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 8 - appointed as "Custodian of Container Freight Station" vide Notification No.13/2016 dated 22.12.2016. 7.4.3 The Ld. AO's main reasons for denying the claim of deduction on CFS purchased/acquired by the appellant under slump sale were that sec 801A(4) of the Act is applicable to only new infrastructure facility and since the appellant had purchased/acquired the CFS under consideration from its wholly owned subsidiary M/s Transindia Logistic Park P Ltd, so the same cannot be held to be a new infrastructure facility in the hands of the appellant company. The Ld. AO has also held that even the proviso to sec 80IA(4) of the Act is not applicable to the facts of the present case as the appellant company has acquired the CFS from its wholly owned subsidiary M/s Transindia Logistic Park P Ltd and not operating and marinating the said CFS on their behalf, i.e. on behalf of transferor M/s Transindia Logistic Park P Ltd but it is being operated and maintained on the behalf of assessee company itself. The Ld. AO is of the view that as per Proviso to sec 80IA(4) of the Act, there should be relationship of principal and agent between the transferor enterprises and the transferee enterprises as the transferee enterprise need to operate and maintain the transferred Infrastructure facility on behalf of the transferor enterprise. 7.4.4 In order to understand the issue under consideration, it is important to analyze the various sub- sections of 80IA of the Act. The sub section (1) of sec 801A provides that the same is applicable where the gross total income of an assessee includes any profits and gains derived from an undertaking or an enterprise from any business referred to in sub section (4). The sub section (2) of sec 801A provides for the period of eligibility of deduction. The sub section (2A) of sec 801A provides for quantum of deduction. The sub section (3) of sec 801A provides for conditions of formation of undertakings, i.e. it is not formed by splitting up, or the reconstruction, of a business already in existence and it is not formed by the transfer to a new business of machinery or plant previously used for any purposes. The sub section (4) to ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 9 - sec 801A provides for nature of business which is eligible for deduction. 7.4.5 In the present case, the appellant has claimed deduction u/s 801A(4)(i) of the Act and the same provides the eligible business as any enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility, which fulfills all the conditions laid down therein. The proviso to sec 80IA(4)(i) of the Act provides for allowance of deduction where an infrastructure facility is transferred on or after the 1st day of April, 1999 by an enterprise which developed such infrastructure facility (transferor enterprise) to another enterprise (transferee enterprise) for the purposes of operating and maintaining the infrastructure facility on its behalf in accordance with the agreement with Central Government, State Government, local authority or statutory body and it further provides that the provisions of this section shall apply to the transferee enterprise as if it were the enterprise to which this clause applies and the deduction from profits and gains would be available to such transferee enterprise for the unexpired period during which the transferor enterprise would have been entitled to the deduction, if the transfer had not taken place. 7.4.6 The said sec 801A(4)(i) and proviso thereto clearly suggest that the deduction is attached to the undertaking or enterprise and not to the assessee. That is evident from the proviso of sec 80IA(4)(i) which provides that where any infrastructure facility is transferred from one enterprises to another enterprise then the deduction will be allowable in the hands of transferee enterprise for the unexpired period during which the transferor enterprises would have been entitled to the deduction, if the transfer had not taken place. The same has also been clarified by the CBDT circular No. 10/2014 dated 06.05.2014, which has clarified the issue of eligibility of deduction u/s 80-IA for unexpired period. Para 3 of the said circular of CBDT clarifies that the proviso to clause (i) and clause (iii) of sub-section (4) of section 80-IA deal with the situation ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 10 - where operation & maintenance of infrastructure facility or operation & maintenance of industrial park / SEZ respectively is transferred to another enterprise in the manner provided therein and the transferee undertaking can avail deduction for the unexpired period. The Para 5 of said circulars provides as under. "5. The vital factor in determining the eligibility criteria for availing deduction u/s 80-IA in above cases would be verification of factual issues so as to ascertain whether (a) there has been splitting up or reconstruction of a business already in existence, (b) transfer is in accordance with the proviso to clause (i) or clause (iii) of sub-section (4) of section 80-IA, or (c) transfer of an enterprise or undertaking is in a scheme of amalgamation or demerger. It is however clarified that if an enterprise or undertaking develops an infrastructure facility, industrial park or special economic zone, as the case may be, and transfers it to another enterprise or undertaking for operation and maintenance in accordance with the proviso to clause (i) or clause (iii) of sub-section (4) of section 80- IA of the Act and this transfer is not by way of amalgamation or demerger, the transferee shall be eligible for the deduction for the unexpired period. [For example, if the 'transferor' has availed of the deduction for development of an infrastructure facility for 6 years and thereafter transfers it to the 'transferee' for operation and maintenance; such transferee will be eligible for deduction for remaining 4 years.] It is further clarified that profit for the purposes of deduction in the case of transferee shall also be computed in accordance with sub- sections (5) to (10) of section 80-1A of the Act." The Para 5 of said CBDT circular clearly provides that the deduction u/s 801A(4)(i) of the Act would be available in the hands of transferee enterprise for the unexpired period provided the transfer is not by way of amalgamation or demerger. It is an admitted fact that in the present case the CFS under consideration was purchased/acquired under "Slump Sale". ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 11 - 7.4.7 The above referred CBDT Circular No.10/2014 dated 06.05.2014 also clarifies that in case of such transfer of Infrastructure facility, it is to be ensured that there has been no splitting up or reconstruction of a business already in existence, transfer is in accordance with the proviso to clause (i) or clause (iii) of sub-section (4) of section 801A(4) and the transfer is not by way of amalgamation or demerger. During the assessment proceedings, the appellant had specifically placed reliance on said CBDT Circular No.10/2014 and the Ld. AO has discussed the same in the impugned order and there is no finding of the Ld. AO that in the case of transfer of CFS under consideration, there was any splitting up or reconstruction of a business already in existence. During the appellate proceedings, the appellant had placed reliance on the CBDT Circular No.1/2013 dated 17.01.2013, wherein the Board has issued certain clarifications in respect of sec 10A rws 10AA & 10B of the Act on the ground that the provisions of sec 80IA of the Act are similar to provisions of sec 10A/10AA/10B of the Act. As discussed above, vide above referred letter of this office dated 07.07.2021, the Ld. AO's attention was drawn to the fact that the appellant has placed reliance on said CBDT Circular No.1/2013 dated 17.01.2013 and the appellant has specifically placed reliance on Para 2(i)(a)(iv) of said Circular wherein in response to question "Whether tax Benefits under section 10A, 10AA and 10B would continue to remain available in case of a slump- sale of a Unit/Undertaking", the Board had clarified that "the vital factor in determining the above issue would be facts such as how a slump- sale is made and what is its nature. It will also be important to ensure that the slump sale would not result into any splitting or reconstruction of existing business. These are factual issue requiring verification of facts. It is however, clarified that on the sole ground of change of ownership of an undertaking the claim of exemption cannot be denied to an otherwise eligible undertaking and the tax holiday can be availed of for the unexpired period at the rates as applicable for the remaining years, subject to fulfillment of prescribed ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 12 - conditions." In view of the same, the Ld. AO was requested to make necessary verification and submit factual report as to whether the unit/undertaking purchased on slump sale from Transindia Logistics Park P Ltd in AY 2017-18, results into any splitting or reconstruction of existing business as stipulated in above referred Board Circular No.1/2013. In pursuance of the above, the Ld. AO has submitted the report called for vide his letter dated 26.07.2021 and has not made any adverse findings/comments, except reiterating the reasons for disallowance u/s 801A(4) of the Act as advanced in the impugned assessment order. 7.4.8 The Hon'ble Bombay High Court, in the case of CIT vs Sonata Software Ltd, reported in 21 taxmann.com 23, has considered the issue of deduction u/s 10A of the Act, where the STP undertaking was transferred under Slum Sale and held as under. "11. The Tribunal in the present case has come to the conclusion that where a running business is transferred lock, stock and barrel by one assessee to another assessee the principle of reconstruction, splitting up and transfer of plant and machinery cannot be applied. According to the Tribunal the benefit of Section 10A attaches to the undertaking and not to the assessee which owns the undertaking. The benefit of Section 10A was held to have attached itself to the STP unit of the software division which was owned by IOCL till 19 October 1994 and it was owned by the assessee subsequent to that date. What is material, according to the Tribunal, is not who owns the undertaking but whether the undertaking is entitled to the benefit available under Section 10A. As regards the issue of transfer by IOCL to the assessee, the Tribunal noted that Section 10A(9) was substituted by the Finance Act 2000 with effect from 1 April 2002. Section 10A(9) provided that where during any previous year the ownership or beneficial interest in an undertaking of the business is transferred by any means, the deduction under sub- section (1) shall not be allowed to the assessee for the Assessment Year relevant to such previous year and the ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 13 - subsequent years. The Tribunal noted that if a transfer between IOCL and the assessee were to be effected after 1 April 2001, that would result in the undertaking being disentitled to the benefit under Section 10A. This was a pointer to the fact that prior to the substitution a transfer of ownership or beneficial interest in the undertaking would not disentitle an assessee to the benefit of Section 10A. (As a matter of fact it may also be noted that the provisions of Section 10A(9) were omitted by the Finance Act 2003 with effect from 1 April 2004). 12. The judgment of the Division Bench of this Court in Gaekwar Foam & Rubber Co. Ltd.'s case (supra) explains that the concept of a reconstruction of a business implies that the original business is not to cease functioning and its identity is not lost. Reconstruction is of a business already in existence and there must be a continuation of the activities and business of the same industria undertaking. Where the ownership of a business or undertaking changes hands that would not be regarded as reconstruction. This judgment has specifically been approved by the Supreme Court in Textile Machinery Corpn. Ltd.'s case (supra). As regards the splitting up of a business, the relevant test is whether an undertaking is formed by splitting up of a business already in existence. Unless the formation of the undertaking takes place by the splitting up of a business already in existence, the negative prohibition would not be attracted. In the present case, the entire business of the software undertaking was transferred to the Assessee. The undertaking of the Assessee was not formed by the splitting up of the business. 13. For the aforesaid reasons, the first question of law would have to be answered in the affirmative in favour of the assessee and against the Revenue." Similar law has been laid down by the Hon'ble Mumbai Tribunal in the case of M/s JSK Industries P Ltd for AY 2010-11 in ITA No.2639/Mum/2014, wherein vide its order dated 23.02.2018, while adjudicating the issue of deduction u/s 80IB of the Act has held as under. ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 14 - "13. The careful reading of sub-section (2) of section 801B make it clear that there are two conditions are provided in negative term i.e. (i) Industrial undertaking is not formed by splitting up reconstruction of business already in existence, (ii) is not formed by transfer of new business of machinery or plant previously used for any purpose. The Assessing Officer has not about the manufacturing or produce product of any article or things not being any article or things specified in XI Schedule or operate one or more Cold-Storage or plant in any part of India. Further, there is no dispute that industrial undertaking manufactures or produce articles or things undertaking employed 10 or more workers in a manufacturing process carried out with the aid of power, or employed 20 or more workers in manufacturing process carried on without the aid of power. The AO has not disputed anyone of two negative terms. Even otherwise, the assessee has placed on record the sufficient evidence to substantiate the requirement of fulfilment of condition laid down under section 80IB consisting of evidence related with the challan of Provident Fund of more than 21 employees with the undertaking during the relevant period. Moreover, there is no dispute that the industrial undertaking is situated in industrial backward state. In our view, there is no bar or prohibition in section 801B on sale (slump[1]sale) of eligible undertaking to another assessee and the benefit attached with eligible undertaking cannot be denied to another assessee. There are only two negative terms prescribed under sub-section (2) of section 801B, which we have referred above. Thus, we have no hesitation in accepting the submissions of Id AR for the assessee that he benefits of section 80IB are travelled (Transferred) with the undertaking and the fact of change of ownership does not affect the deduction. Sub-section (1) & (2) of section 801B categorically refers to the business carried out by industrial undertaking. Thus, mere change of ownership would not affect the claim of deductions. With the above factual and legal discussion, we confirmed the order of Id. CIT(A) and dismissed the appeal of Revenue. ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 15 - 15.In the result, appeal filed by Revenue is dismissed." In the present case, it is an admitted fact that in the impugned assessment order, the Ld. AO in Para 8.3 of said order has given a factual finding that the assessee company has made a Business Transfer Agreement with M/s Transindia Logistics Park P Ltd and M/s Transindia Logistics Park P Ltd had claimed deduction u/s 801A(4)(i) for the period of 9 months, whereas the assessee company has claimed deduction u/s 80IA(4)(i) for the period of 3 months, i.e. after acquisition of the running business/undertaking. Therein the Ld. AO has also given factual finding that M/s Transindia Logistics Park P Ltd has transferred entire running undertaking to the assessee company under slump sale. 7.4.9 As discussed above one of the arguments of the Ld. AO is that the CFS under consideration which was acquired by the appellant through Slump Sale cannot be held to a new infrastructure facility in the hands of the appellant company as it was used in the hands of its wholly owned subsidiary. I have considered the said argument of the Ld. AO and of the considered opinion that the same runs in total contrast to the provisions of sec 80IA(4)(i) of the Act and the law laid down by Hon'ble Courts/Tribunals in above referred cases, as if said argument is accepted then the proviso to sec 80IA(4)(i) would become redundant. Though the said proviso clearly provides that where an infrastructure facility is transferred on or after the 1st day of April, 1999 by an enterprise which developed such infrastructure facility (transferor enterprise) to another enterprise (transferee enterprise) for the purposes of operating and maintaining the infrastructure facility then deduction would be available to such transferee enterprise for the unexpired period and if the arguments of the Ld. AO is accepted that in the hands of transferee enterprise such infrastructure facility will not be considered as new infrastructure facility, then in 90 case the Proviso to sec 801A(4)(i) can be made applicable. It is settled law that no provisions of Act should be interpreted in such way that the same become redundant. Since, the said argument of the Ld. AO ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 16 - is contrary to the express provisions of law and also as clarified in above referred CBDT circulars so the same cannot be accepted. 7.4.10 The other argument of the Ld. AO is that there should be Principal and Agent relationship between the transferor enterprise and the transferee enterprise and the transferee enterprise should operate and maintain such transferred infrastructure facility on behalf of the transferor enterprise is also devoid of merits as the same is not mandated by the provisions of the Act. The usages of words "on its behalf" in the said proviso to sec 801A(4)(i) of the Act is with reference to the transferee enterprise and not with reference to the transferor enterprise and the same is evident as said words "on its behalf" have been used after the words "...such infrastructure facility (hereafter referred to in this section as the transferor enterprise) to another enterprise (hereafter in this section referred to as the transferee enterprise) for the purpose of operating and maintaining the infrastructure facility". 7.4.11 In view of the above discussions, am of the considered opinion that the Ld. AO was not justified in disallowing the above referred claim of deduction u/s 80IA(4) of the Act. Hence, the impugned disallowance made u/s 80IA(4) of the Act at Rs. 4,04,83,352/- is DELETED. The Ground Nos. 1 to 7 raised in appeal are ALLOWED. 8. The Ld.AR emphasized that the assessee has submitted the exhaustive information on the claim of deduction satisfying the eligibility criteria and filed the income tax return, Tax Audit report U/sec44AB of the Act in Form.No.3CD and in compliance to notices/letter , the asssessee has furnished the detail note on deduction U/sec80IA(4) of the Act in respect ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 17 - of transferor company CFS at Uran placed at page113 to 129 of the paper book-1, in continuation of submissions before the A.O. the asssessee has submitted the business transfer agreement , Audited financial statements of CFS Uran, notification of the Customs department on appointment as CCFS and additional details including the indemnity bond provided to the customs authorities referred at page 267. Further the assessee has complied with the guide lines in the circulars issued from time to time. In the appellate proceedings, the assessee has filed the additional evidence and was admitted and the CIT(A) has called for the remand report from the A.O. and the asssessee has filed rejoinder placed at 605 to 613 of the paper book. The Ld.AR highlighted the Audited financial statements, details of the transferor company and in particular Audit report in Form .No.10CCB on eligibility of claim under U/sec80IA of the Act on CFS division placed at page 727 to 731 of the paper book. The asseseee has substantiated the claim with requisite details/ information in the assessment & appellate proceedings on the business agreement/ Slump Sale. The Ld.AR relied on the ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 18 - fallowing judicial decisions in support of claim of deduction. (i).CIT Vs Sonata Software Ltd (343 ITR 397)(Bombay). (ii).Pr.CIT Vs Cream Jewellary ITA no 307 of 2007 dated 16-4-2019 (Bombay) (iii).DCIT Vs M/s JSK Industries Pvt ltd. ITA .NO .2639/Mum/2014 dated 23.02.2018( Mumbai ITAT) (iv) CIT Vs Heartland K G information Ltd(359 ITR1) (Madras) (v).CIT Vs Heartland Delhi Transcription services (p) Ltd. (366 ITR 523)(Dehi) (V) CIT. Udaipur Vs Chetak enterprises (P ) Ltd( S C ) (423 ITR 267) The Ld. AR contentions are that the asssesee company is entitled to the deduction U/sec80IA of the Act as the transferor company has already entered in to agreement in carrying on the business as CFS and benefit of deduction is available to the assseee company as it was acquired under Slump Sale and there is only change of ownership and activities of the ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 19 - asssessee fall under sec80IA(4) of the Act. We find the CIT(A) has dealt on the facts, provisions of law, remand report, rejoinder and judicial decisions . The Ld. DR could not controvert the findings of the CIT(A) with any new cogent material or information to take different view. We considered the facts, circumstances, submissions as discussed above are of the view that the CIT(A) has passed a reasoned and logical order. Accordingly, we do not find any infirmity in the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue. 9. In the result, the appeal filed by the revenue is dismissed. Order pronounced in the open court on 20.02.2023. Sd/- Sd/- (BASKARAN BR) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 20.02.2023 KRK, PS /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. आ र आ / The CIT(A) ITA No. 2046/Mum/2021 M/s Allcargo Logistic Ltd, Mumbai. - 20 - 4. आ र आ ( ) / Concerned CIT 5. "#$ % & &' , आ र ) र*, हमद द / DR, ITAT, Mumbai 6. % -. / 0 / Guard file. ान ु सार/ BY ORDER, " & //True Copy// 1. ( Asst. Registrar) ITAT, Mumbai
Other Referred Cases
CIT vs Sonata Software Ltd, Pr.CIT vs Cream Jewellary, DCIT vs M/s JSK Industries Pvt Ltd, CIT vs Heartland K G information Ltd, CIT vs Heartland Delhi Transcription services (p) Ltd, CIT Udaipur vs Chetak enterprises (P) Ltd
Laws Referred To
Income Tax Act, 1961
1:1 Consultation on Startup Fundraising
₹5000
1:1 Consultation on Legal Requirements
₹1
1:1 Consultation on SME Listing
₹0
Convertible Note Agreement
Mehul₹5000
Startup Dissolution Resolution
₹0
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