DCIT, Tuticorin V. M/s. Diamond Shipping Agencies (P) Ltd., Tuticorin

ITA 2432/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8018 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 22-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: G BASKAR MS S SRINIRANJANI
• Section: 143(3); 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , ' # BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.2432/MDS/2016 / ASSESSMENT YEAR : 2013-14 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1, TUTICORIN. VS. M/S. DIAMOND SHIPPING AGENCIES (P) LIMITED, DIAMOND HOUSE, A-4, WORLD TRADE AVENUE, HARBOUR ESTATE, TUTICORIN - 628 004. [PAN: AAACD 6487H] ( / APPELLANT) ( /RESPONDENT) % & / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT )*% & / RESPONDENT BY : SHRI G. BASKAR, ADVOCATE, MS. S. SRINIRANJANI, ADVOCATE & /DATE OF HEARING : 22.11.2016 & /DATE OF PRONOUNCEMENT : 25.11.2016 /O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDER OF CIT(A) ITA NO. 223/2015-16 DATED 13.05.2016 PASSED U/S. 143(3) AND SECTION 250 OF THE INCOME TAX ACT :-2-: I.T.A. NO. 2432/MDS/2016 2. THE FOLLOWING GROUNDS ARE RAISED BY THE REVENUE: 2.1 THE CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE U/S. 80IA(4) OF THE ACT, ON THE GROUND THAT THE ASSESSEE DEVELOPED AND OPERA TED CONTAINER FREIGHT STATION (CFS) WHICH CAN BE TAKEN AS AN 'INLAND PORT ' SPECIFIED IN SECTION 80IA(4). 2.2 THE DECISION IN THE CASE OF A.S. LOGISTICS PVT. LTD ., DATED 23.12.2014 FOR THE ASSESSMENT YEAR 2009-10 RENDERED BY THE HON'BLE MAD RAS HIGH COURT AND RELIED ON BY THE CIT(A) HAS NOT BEEN ACCEPTED BY TH E DEPARTMENT AND SLP HAS BEEN FILED BEFORE SUPREME COURT AND THE SAME IS PENDING. 3. THE BRIEF FACTS OF THE CASE THAT THE ASSESSEE I S IN THE BUSINESS OF SHIPPING AND TRANSPORT AND FILED THE E-RETURN OF IN COME ON 25.09.2013 ADMITTING THE NILL INCOME. SUBSEQUENTLY, THE CASE WAS SELECT ED FOR SCRUTINY AND NOTICE U/S. 143(2) AND 142(1) OF THE ACT WAS ISSUED. IN COMPL IANCE TO THE NOTICE, THE LD. AR APPEARED FROM TIME TO TIME AND FURNISHED THE BOOKS OF ACCOUNTS AND OTHER DETAILS. THE LD. AO ON PERUSAL OF THE FINANCIAL STATEMENTS O BSERVED THAT THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S. 80IA OF THE ACT IN RESPE CT OF INCOME EARNED FROM CFS DIVISION RS. 2,57,84,288/- AS THE CONTAINER FREIGHT STATION (CFS) IS A INLAND PORT WHICH COMES UNDER THE DESCRIPTION OF THE INFRASTRUC TURE FACILITY AND THE ASSESSEE SUBMITTED THE CERTIFICATE RECEIVED FROM CUSTOM AUTH ORITY GRANTING THAT THE ASSESSEE COMPANY IS APPOINTED AS CUSTODIAN OF THE GOODS IN A FORESAID CUSTOM AREA FOR THE :-3-: I.T.A. NO. 2432/MDS/2016 PURPOSE OF IMPORTS AND EXPORTS, BUT FROM THE ASSESS MENT YEAR 2002-03, THE STRUCTURE AT PORTS FOR STORAGE, LOADING AND UNLOADI NG ETC WILL FALL UNDER THE DEFINITION OF PORT FOR THE PURPOSE OF SECTION 10(23G) AND SECT ION 80IA OF THE INCOME TAX ACT AND THE CONDITIONS ARE: (I) THE ENTERPRISES STARTS OPERATING AND MAINTAINI NG THE INFRASTRUCTURE FACILITY ON OR AFTER APRIL 1ST, 1995. (II) THE RETURN OF INCOME SHOULD BE SUBMITTED ON O R BEFORE THE DUE DATES MENTIONED U/S. 139(1) OF THE INCOME TAX ACT. (III) DEDUCTION SHOULD BE CLAIMED IN THE RETURN OF INCOME FILED BY THE ASSESSEE. (IV) THE CONCERNED PORT AUTHORITY HAS ISSUED A CER TIFICATE THAT THE SAID STRUCTURE FORM PART OF THE PORT (CIRCULAR NO. 10 /2005 DATED 16.12.2005). 4. THE LD. AO FOUND THAT ASSESSEE COMPANY HAS COMPL IED THREE CONDITIONS AND THE ASSESSEE WAS ASKED TO PRODUCE TH E CERTIFICATE FROM PORT AUTHORITIES AND TO SATISFY THE FOUR CONDITION. SIN CE, ASSESSEE COULD NOT PRODUCE THE CERTIFICATE FROM PORT-AUTHORITY IN THE ASSESSME NT PROCEEDINGS, THE LD. AO HAS DENIED DEDUCTION U/S. 80IA OF THE ACT RS. 2,57,84,2 88/- AND ADDED TO THE RETURNED INCOME ALONG WITH OTHER ADDITIONS AND PASS ED ORDER U/S. 143(3) OF THE ACT DATED 22.03.2016 DETERMINING ASSESSED INCOME OF RS. 2,71,42,620/- 5. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE COMPANY FILED THE APPEAL BEFORE COMMISSIONER OF INCOME TAX (APPEALS). IN THE APPELLANT PROCEEDINGS, THE LD. AR ARGUED THE GROUNDS AND RETR EATED THE SUBMISSIONS OF :-4-: I.T.A. NO. 2432/MDS/2016 ASSESSMENT PROCEEDINGS. THE INCOME FROM CONTAINER FREIGHT STATION (CFS) BEING AN INFRASTRUCTURE FACILITY ELIGIBLE FOR DEDUCTION U /S. 80IA OF THE ACT. THE LD. CIT(A) IN THE ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 201 2-13 IN ITA. NO. 0065/2015- 16 DATED 29.09.2015 ALLOWED THE CLAIM. THE APPELLA TE AUTHORITY CONSIDERED THE SUBMISSIONS AND CERTIFICATE DATED 27.04.2016 ISSUED BY THE TUTICORIN PORT TRUST FOR CLAIM U/S. 80IA OF THE ACT AND RELIED ON ASSESS MENT YEAR 2012-13 APPELLATE ORDER AND DIRECTED THE ASSESSING OFFICER TO ALLOW T HE DEDUCTION U/S. 80IA. AGGRIEVED THE REVENUE HAS FILED APPEAL TO TRIBUNAL. THE LD. DR ARGUED THAT THE ASSESSEE HAS NOT COMPLIED THE REQUISITE CONDITION U /S. 80IA AND LD. CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION U/S. 80IA OF THE ACT AND THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF A.L. LOGISTICS (P) LTD., WAS NOT ACCEPTED BY THE DEPARTMENT AND SLP HAS BEEN FILED BEFORE THE SUPREME COURT AND PRAYED FOR SET ASIDE OF ORDER OF CIT(A). CONTRA, THE LD. AR RELIED ON THE ORDERS OF THE CIT(A) AND TRIBUNAL ORDER IN THE ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2012-13. 6. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATE RIAL ON RECORD AND JUDICIAL DECISIONS. THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION, WITHOUT CONSIDERING THE FACTS AND THE DECISION IS CHALLENGED AND SLP FILED BEFORE THE HON'BLE SUPREME COURT. WHEREAS, T HE LD. AR PRODUCED THE COPY OF ORDER OF TRIBUNAL IN ITA NO. 2272/MDS/2015 DATED 19 .02.2016 FOR ASSESSMENT YEAR 2012-13 AND CERTIFICATE FROM V.O. CHIDAMBARANAR POR T TRUST, DATED 27.04.2016 DECLARING THE ASSESSEE'S CFS AS IN LAND PORT. WE F IND NO CHANGE IN FACTS, SO THAT THE PRESENT CASE IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH IN :-5-: I.T.A. NO. 2432/MDS/2016 ASSESSEE'S OWN CASE IN ITA NO. 2272/MDS/2015 FOR TH E ASSESSMENT YEAR 2012-13 THE RELEVANT PART(PAGE 2 PARA 3 AND 4) OF WHICH READS A S UNDER: '3. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE O PINION THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE MADRAS HIGH CO URT IN THE CASE OF CIT VS A.L. LOGISTICS PVT. LTD., 374 ITR 609, WHEREIN HELD AS FOLLOWS: AS HAS BEEN OBSERVED BY THE TRIBUNAL, IN THE DECISION OF THE DE LHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD., VS. ACIT RE PORTED IN 346 ITR 140 (DEL), CONTAINER FREIGHT STATION IS HELD TO BE FALL ING WITHIN THE CUSTOMS AREA ATTACHED TO THE PORT. AS THE WORK RELATING TO CUSTO MS IS PERFORMED AT THESE INLAND CONTAINER DEPOTS/CONTAINER FREIGHT STATIONS, IT WOULD FALL UNDER THE PROVISION OF SECTION 80IA(4)(I) EXPLANATION (D) OF THE INCOME TAX ACT. THE PLEA OF MR. T. RAVIKUMAR, LEARNED STANDING COUNSEL APPEARING FOR THE REVENUE THAT ANY OTHER PUBLIC FACILITY ON SIMILAR NATURE HA S BEEN OMITTED WITH EFFECT FROM 1.4.2002 WILL NOT MAKE THE CASE ANY DIFFERENT IN VIEW OF THE DECISION OF THE DELHI HIGH COURT (SUPRA), WHICH HOLDS THAT CSF IS PART OF AN INLAND PORT AND THERE IS NO SPECIFIC EXCLUSION OF CSF IN CLAUSE (D) OF EXPLANATION TO SECTION 80IA(4)(I). THEREFORE, ON FACT WHEN IT HAS ITA NO.2272/15 BEEN FOUND BY THE TRIBUNAL THAT CSF IS AN INFRASTRUCTURE FACIL ITY, WE FIND NO GOOD REASON TO DIFFER ON FACT. WE RESPECTFULLY AGREE WITH THE D ELHI HIGH COURT. 4. IN VIEW OF THE ABOVE JUDGMENT OF THE JURISDICTIO NAL HIGH COURT, THE CIT(A) OBSERVED THAT THE CONTAINER FREIGHT STATION DEVELOPED AND OPERATED BY THE ASSESSEE CONSTITUTE AN INLAND PORT WHICH I S DEFINED AS INFRASTRUCTURE FACILITY U/S 80IA(4) AND THEREFORE, THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IA(4) OF THE ACT. BEING SO, IN OUR OPINION, THERE IS NO INFIRMITY IN THE ORDER OF THE CIT(A) AND ACCORDINGLY THE SAME IS CONFIRMED . ' 7. WE RESPECTFULLY FOLLOWING THE DECISION OF THE CO ORDINATE BENCH OF TRIBUNAL, UPHELD THE ORDER OF CIT(A) AND DISMISS TH E REVENUE APPEAL. :-6-: I.T.A. NO. 2432/MDS/2016 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED ON FRIDAY, THE 25TH DAY OF NOVEMBE R, 2016 AT CHENNAI. SD/ - ( ) (SANJAY ARORA) ! / ACCOUNTANT MEMBER SD/- (. ) (G. PAVAN KUMAR) % ! /JUDICIAL MEMBER /CHENNAI, / /DATED: 25TH NOVEMBER, 2016 JPV & )'12 32 /COPY TO: 1. %/ APPELLANT 2. )*% /RESPONDENT 3. 4 ( )/CIT(A) 4. 4 /CIT 5. 2 )'' /DR 6. 8 /GF.