DCIT, Tuticorin V. Raja Agencies, Tuticorin

ITA 215/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8900 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 05-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR CIT MRS
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , . , # $ BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.215/MDS/2016 ( / ASSESSMENT YEAR: 2012-13) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -I TUTICORIN. VS M/S. RAJA AGENCIES, 1, BYE PASS ROAD, MADATHUR, TUTICORIN. PAN: AABFR9434Q ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. R.CLEMENT RAMESH KUMAR, ADDL.CIT /RESPONDENT BY : MRS. S.VIDYA, C.A. /DATE OF HEARING : 25 TH MAY,2016 /DATE OF PRONOUNCEMENT : 1 ST AUGUST, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 1, MADURAI DATED 18.11.2015 IN ITA NO.0096/2015-16 PASSED UNDER SECTION 143(3) R.W.S. 250(6) OF THE ACT. 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS AP PEAL, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE DISALLOWANCE OF `69,24,759/- MADE BY THE LEARNED ASSESSING OFFICER UNDER SECTION 80IA(4) OF THE ACT. 2 ITA NO.215/MDS/2016 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM CONSTITUTED BY TWO PARTNERS VIZ MR. D.GNANARAJ AND MR. D.DEVARAJ, CARRYING ON THE BUSINESS OF SHIPPING, CL EARING AND FORWARDING AND ACTING AS AGENT OF FREIGHT FORWARDIN G AGENCIES AT TUTICORIN, FILED ITS RETURN OF INCOME ON 28.09.2 012 FOR THE ASSESSMENT YEAR 2012- 13 ADMITTING INCOME OF `2,00,03,920/- . THE CASE WAS SELECTED FOR SCRUTINY AND SUBSEQUENTLY THE ASSESSMENT WAS COMPLETED BY THE LE ARNED ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT O N 31.03.2015 BY MAKING CERTAIN ADDITIONS/DISALLOWANCE S. ONE OF SUCH DISALLOWANCE IS THE CLAIM OF DEDUCTION BY T HE ASSESSEE UNDER SECTION 80IA OF THE ACT FOR ITS INCO ME EARNED IN RESPECT OF CFS DIVISION TO THE TUNE OF ` 69,24,7 59/- AS THE ASSESSEE HAS BEEN OPERATING CONTAINER FREIGHT STATI ON WHICH IS TREATED AS INLAND PORT UNDER THE AMBIT OF INFR ASTRUCTURE FACILITY. HOWEVER SINCE THE ASSESSEE HAD FAILED TO PRODUCE THE PRESCRIBED CERTIFICATE, THE LEARNED ASSESSING O FFICER DENIED THE BENEFIT OF SECTION 80IA OF THE ACT TO TH E ASSESSEE. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE BY OBSE RVING AS UNDER:- 3 ITA NO.215/MDS/2016 FROM THE ABOVE, IT COULD BE SEEN THAT THE CONTAINE R FREIGHT STATION SET UP BY THE APPELLANT WAS APPROVE D BY THE MINISTRY OF COMMERCE AND INDUSTRY, COMMISSIONER OF CUSTOMS, MINISTRY OF FINANCE. AS CONTENDED BY TH E REPRESENTATIVE AS PER SEC.80IA(4)(I)(B) THE ENTERPR ISE HAS TO BE APPROVED BY THE CENTRAL GOVERNMENT, STATE GOVERNMENT OR ANY OTHER STATUTORY AUTHORITY EVEN THOUGH IN THE BOARD'S CIRCULAR IT IS STIPULATED THA T IT SHOULD BE CERTIFIED BY THE CONCERNED PORT AUTHORITY . IN SIMILAR CIRCUMSTANCES, THE HON'BLE MADRAS HIGH COUR T IN THE CASE OF A.L. LOGISTIC (P) LTD. BY JUDGMENT DATE D 23.12.2014 FOR THE ASST. YEAR 2009-10 HELD AS UNDER :- '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 EVENS 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 CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE O F UNITED LINER AGENCIES OF INDIA (PRIVATE) LTD., VS. JCIT(OOS) IN ITA NOS.273 & 275/MUM /2013 (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 BOIA(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.' I FIND THAT THE ABOVE DECISION OF THE JURIS DICTIONAL HIGH COURT IS APPLICABLE TO THE FACTS OF THIS CASE. AS H ELD BY THE HON'BLE HIGH COURT, THE CONTAINER FREIGHT STATION S ET UP BY THE APPELLANT IS APPROVED BY THE CENTRAL GOVERNMENT BY THE MINISTRY OF COMMERCE AND INDUSTRY AND MINISTRY OF FINANCE AND, THEREFORE, THERE IS NO REQUIREMENT OF CERTIFICATE ISSUED BY TUTICORIN PORT TRUST. AS PER 4 ITA NO.215/MDS/2016 SEC.80IA(4)(I)(B) OF THE ACT, THE APPROVAL IS NECES SARY EITHER FROM THE CENTRAL GOVERNMENT OR ANY OTHER STATUTORY AUTHORITY PRESCRIBED BY THE BOARD. IN THIS CASE, AS THE APPROVAL HAS ALREADY BEEN GRANTED BY THE CENTRAL GOVERNMENT, THE ASSESSING OFFICER IS NOT JUSTIFIED IN DENYING THE DEDUCTION U/S.80IA(4) OF THE ACT. 5.1 FURTHER AS CONTENDED BY THE REPRESENTATIVE, THE APPELLANT CLAIMED DEDUCTION U/S.80IA(4) ON THE GROU ND THAT THE CONTAINER FREIGHT STATION DEVELOPED, OPERATED A ND MAINTAINED BY THE APPELLANT IS AN 'INLAND PORT' AS PER EXPLANATION OF INFRASTRUCTURE FACILITY IN SEC.80IA( 4) WHEREAS THE ASSESSING OFFICER WAS UNDER THE ERRONEOUS ASSUM PTION THAT THE DEDUCTION WAS CLAIMED ON THE GROUND THAT T HE APPELLANT DEVELOPED AND MAINTAINED A 'PORT' AND THE REBY HE WRONGLY APPLIED CIRCULAR NO.1 0/2005 DATED 6.12.2005. THE HON'BLE DELHI HIGH COURT EXAMINED THE LETTER IS SUED BY CENTRAL BOARD OF EXCISE CUSTOMS, NEW DELHI DATED 24.04.2007 AND LETTER ISSUED BY DEPARTMENT OF COMMERCE, INFRASTRUCTURE DIVISION DATED 27.05.2003 WHICH HAVE BEEN REPRODUCED IN THE ABOVE DECISION AND FINALLY CAME T O THE CONCLUSION THAT AS PER THE DEFINITION IN CUSTOMS AC T, CONTAINER FREIGHT STATION INLAND CONTAINER DEPOT WO ULD CONSTITUTE 'INLAND PORT' AS AN INFRASTRUCTURE FACIL ITY DEFINED UNDER SEC.80IA(4). FURTHER, THE ABOVE DECISION OF T HE HON'BLE DELHI HIGH COURT WAS FOLLOWED BY THE HON'BLE MADRAS HIGH COURT IN PARA-10 OF ITS ORDER IN THE CASE OF MIS. AL. LOGISTICS PVT. LTD. (CITED ABOVE) IN THE FOLLOWING WORDS :- 'AS HAS BEEN OBSERVED BY THE TRIBUNAL, IN THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD., VS. ACIT REPORTED IN 346 ITR 140 (DE!), CONTAINER FREIGHT STATION IS HELD TO BE FALLING WITHIN THE CUSTOMS AR EA ATTACHED TO THE PORT. AS THE. WORK RELATING TO CUSTOMS IS PERFORMED AT THESE INLAND CONTAINER DEPOTS /CONTAINER FREIGHT STATIONS, IT WOULD FALL UNDER TH E PROVISION OF SECTION 8OLA (4)(I) EXPLANATION (D) OF THE IT ACT. THE PLEA OF MR. T. RAVIKUMAR, LEARNED STANDING COUNSEL APPEARING FOR THE REVENUE THAT ANY OTHER PUBLIC FACILITY ON SIMILAR NATURE HAS BEE N OMITTED WITH EFFECT FROM 01.04.2002 WILL NOT MAKE T HE CASE ANY DIFFERENT IN VIEW OF THE DECISION OF THE D ELHI HIGH COURT (SUPRA), WHICH HOLDS THAT CSF IS PART OF 5 ITA NO.215/MDS/2016 AN INLAND PORT AND THERE IS NO SPECIFIC EXCLUSION O F CSF IN CLAUSE (D) OF EXPLANATION TO SECTION 8OLA (4)(I). THEREFORE, ON FACT WHEN IT HAS BEEN FOUND B Y THE TRIBUNAL THAT CSF IS AN INFRASTRUCTURE FACILITY , WE FIND NO GOOD REASON TO DIFFER ON FACT. WE RESPECTFU LLY AGREE WITH THE DELHI HIGH COURT.' FROM THE ABOVE, I FIND THAT THE CONTAINER FREIGHT STATION DEVELOPED BY THE ASSESSEE WOULD CONSTITUTE AN 'INLAND PORT' WHICH IS DEFINED AS AN INFRASTRUCTURE FACILITY UNDER SEC. 80LA (4) AND, THEREFORE, THE APPELLANT I S ENTITLED TO DEDUCTION U/S. 80IA(4). THE CBDT CIRCULAR NO.10/2005 IS NOT APPLICABLE TO THE CASE OF THE APPELLANT AS IT I S APPLICABLE ONLY IN THE CASE OF DEVELOPMENT, OPERATI ON AND MAINTENANCE OF 'PORT' AND NOT 'INLAND PORT'. TH E DEFINITION OF INFRASTRUCTURE FACILITY IN SEC.80IA(4 ) COVERS BOTH 'PORT' AND 'INLAND PORT' AND THE ASSESSING OFF ICER WAS UNDER THE WRONG IMPRESSION THAT THE DEDUCTION W AS CLAIMED AS 'PORT' AND THEREBY WRONGLY APPLIED THE BOARD'S CIRCULAR. IN VIEW OF THE ABOVE, FIND THAT THE APPELLANT IS EN TITLED TO DEDUCTION U/S.80IA(4) AND, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE MADE B Y HIM. 4. FROM THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS), IT IS EVIDENT THAT HE HAS ARRIVED AT THE ABOVE DECISION BY RELYING ON THE CIRCULAR OF THE CBDT AND THE DECISION OF THE HONBLE DELHI HIGH COURT CITED SUPR A. FURTHER, THE ASSESSEE HAS ALSO PRODUCED BEFORE US THE PRESCR IBED CERTIFICATE FROM THE PORT TRUST DATED 28.03.2016. I N THESE CIRCUMSTANCES, WE DO NOT FIND IT NECESSARY TO INTER FERE WITH 6 ITA NO.215/MDS/2016 THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 1 ST AUGUST, 2016 SD/- SD/- ( . ) ( . ) (G.PAVAN KUMAR) ( A.MOHAN ALANKAM ONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 1 ST AUGUST, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF