ACIT, CHENNAI V. M/s. Kailash Shipping Services Pvt. Ltd., CHENNAI

ITA 2624/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7448 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 28-02-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 09-09-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SANKARANARAY ANAN
• Section: 143(3); 142(1); 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , ' # BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 2624/MDS/2016 / ASSESSMENT YEAR : 2012-13 ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 4(2), CHENNAI - 600 034. VS. M/S. KAILASH SHIPPING SERVICES PVT. LTD., WESCARE TOWERS, GROUND FLOOR, NO. 16, CENATOPH ROAD, TEYNAMPET, CHENNAI - 600 018. [PAN: AAACK 2806R] ( / APPELLANT) ( / RESPONDENT) $% & / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT )*$% & / RESPONDENT BY : SHRI S. SANKARA NARAYANAN & + /DATE OF HEARING : 28.02.2017 & + /DATE OF PRONOUNCEMENT : 24.03.2017 /O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS)-8, CHENNAI IN ITA NO. 101/2 015-16 DATED 22.06.2016 PASSED U/S. 143 AND 250 OF THE ACT. :-2-: I.T.A. NO. 2624/MDS/2016 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 2.1 THE CIT(A) ERRED IN DELETING THE DISALLOWANCE O N THE CLAIM OF DEDUCTION U/S. 80IA TO THE EXTENT OF RS. 86,63,274/-. 2.2 THE CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT CONTAINER FREIGHT STATION (CFS) CANNOT BE CLASSIFIED AS 'INLAND PORTS' FOR TH E PURPOSE OF SECTION 80IA(4). 2.3 THE CIT(A) ERRED IN HOLDING THAT THE ASSESSEE I S ENTITLED TO THE BENEFIT U/S. 80IA OF THE INCOME TAX ACT IN VIEW OF THE STATUS OF CFS HAVING BEEN CLARIFIED BY THE MINISTRY OF COMMERCE AND INDUSTRY AS 'INLAND PORTS' AND ALSO FOR THE REASON THAT THE CHENNAI PORT TRUST HAD ISSUED A CERTIFICATE STATING THAT THE CFS OF THE ASSESSEE MAY BE CONSIDE RED AS EXTENDED ARM OF THE PORT IN ACCORDANCE WITH THE CBDT CIRCULAR NO . 793 DATED 23.06.2000 READ WITH CIRCULAR NO. 133/95 CUS DATED 22.12.1992 OF THE CENTRAL BOARD OF EXCISE AND CUSTOMS, NEW DELHI. 2.4 THE CIT(A) OUGHT TO HAVE NOTED THAT AFTER THE A MENDMENT OF THE SECTION 80IA(4) VIDE FINANCE ACT, 2001 WITH EFFECT FROM 01. 04.2002, THERE IS CERTAIN CHANGE IN THE DEFINITION OF INFRASTRUCTURE FACILITY GIVEN IN THE EXPLANATION. THE PORTION 'AS MAY BE NOTIFIED BY TH E BOARD IN THIS BEHALF IN THE OFFICIAL GAZETTE' AS APPEARING BEFORE THE SAID AMENDMENT HAS BEEN DELETED IN THE NEW EXPLANATION AND HENCE THE INSTAN T ASSESSEE'S CLAIM ON DEDUCTION U/S. 80IA(4) WAS NOT ALLOWABLE ON THE BAS IS OF THE ABOVE EXPLANATION INDEPENDENT OF THE NOTIFICATIONS :-3-: I.T.A. NO. 2624/MDS/2016 2.5 THE CIT(A)'S RELIED UPON DECISION OF JURISDICTI ONAL HIGH COURT IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2009-10 VIDE TCA NO. 4 97 OF 2015 DATED 23.07.2015 WAS NOT ACCEPTED BY THE DEPARTMENT AND A GAINST WHICH AN SLP PROPOSAL HAD BEEN SENT TO THE BOARD FOR FILING OF SLP BEFORE THE HON'BLE APEX COURT. 2.6 HAVING REGARD TO THE HON'BLE APEX COURT'S DECIS ION IN THE CASE OF CIT VS CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) L TD (2015) HAS GRANTED SLP AGAINST HIGH COURT OF BOMBAY'S RULING T HAT ICDS AND CFSS ARE INFRASTRUCTURAL FACILITY ENTITLED TO DEDUCTION UNDE R SUB SECTION (4) OF SECTION 80IA, THE CIT(A) OUGHT TO HAVE UPHELD THE DISALLOWA NCE U/S. 80IA(4) MADE BY THE AO. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF CLEARING AND FORWARDING AGENTS AND CONTAINER FREIGHT STATION AND FILED THE RETURN OF INCOME ELECTRONICAL LY FOR THE ASSESSMENT YEAR 2012-13 ON 26.09.2012 WITH TOTAL INCOME RS. NIL AND THE INCOME AS PER PROVISIONS OF SECTION 115JB OF THE ACT IS RS. 2,46, 87,758/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTIC E U/S. 143(2) AND 142(1) ARE ISSUED ALONG WITH DETAILED QUESTIONNAIRE. IN RESPO NSE TO THE NOTICE, THE LD. AR APPEARED FROM TIME TO TIME AND PRODUCED BOOKS OF AC COUNTS, COPY OF ACKNOWLEDGMENT WITH COMPUTATION OF INCOME, BALANCE SHEET, PROFIT AND LOSS ACCOUNT WITH SCHEDULES, AUDIT REPORT IN FORM 3CA AN D 3CD, FORM 29B, 26AS, AND FORM 10CCB AND OTHER DETAILS IN SUPPORT OF RETURN O F INCOME FOR THE ASSESSMENT :-4-: I.T.A. NO. 2624/MDS/2016 PURPOSE. THE ASSESSING OFFICER ON PERUSAL OF THE I NFORMATION IN THE ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS CLAIMED DED UCTION U/S. 80IA OF THE ACT RS. 6,71,54,507/- AND ADJUSTED TO AN EXTENT OF RS. 1,40,26,352/- FOR THE CONTAINER FREIGHT STATION OPERATED AT CHENNAI. BUT UNDER THE PROVISIONS OF SECTION 80IA OF THE ACT, THE FACILITY DOES NOT COME UNDER INFRASTRUCTURE FACILITY AND THEREFORE NOT ELIGIBLE FOR DEDUCTION U/S. 80IA OF THE ACT AND THE ASSESSEE HAS FURNISHED THE EXPLANATIONS THAT THE CONTAINER FREIG HT STATION IS ELIGIBLE DEDUCTION U/S. 80IA OF THE ACT BUT LD. AO DEALT ON THE DISAL LOWANCE OF CLAIM AT PAGE 2 TO 4 AND PASSED ORDER U/S. 143(3) DATED 27.03.2015. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE COMPANY HAS FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS, THE LD. AR A RGUED THE GROUNDS AND SUBSTANTIATED THE CASE WITH THE EXPLANATIONS AND AL SO SUPPORTED THE CASE WITH THE DECISIONS IN ASSESSEE'S OWN CASE FOR THE ASSESS MENT YEAR 2009-10 PASSED BY THE TRIBUNAL IN ITA NO. 365/MDS/2014 DATED 08.10.20 14. THE LD. CIT(A) CONSIDERED THE FINDINGS OF THE ASSESSING OFFICER AN D THE ASSESSEE SUBMISSIONS AND RELIED ON THE DECISION OF THE JURISDICTIONAL HI GH COURT IN ASSESSEE'S OWN CASE IN TCA 479/2015 DATED 23.07.2015 REFERRED AT PARA 4 OF THE ORDER AND HELD 'CONTAINER FREIGHT STATIONS' MAINTAINED BY CHENNAI IS A INFRASTRUCTURE FACILITY U/S. 80IA OF THE ACT AND DELETED THE ADDITION AND ALLOWE D THE APPEAL. 5. AGGRIEVED BY THE ORDER, THE REVENUE HAS FILED A N APPEAL WITH THE TRIBUNAL. BEFORE US, THE LD. DR ARGUED THE GROUNDS AND SUBMIT TED THAT THE LD. CIT(A) HAS :-5-: I.T.A. NO. 2624/MDS/2016 ERRED IN DELETING THE DISALLOWANCE MADE BY THE ASSE SSING OFFICER U/S. 80IA(4A) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE CONT AINER FREIGHT STATION CANNOT BE CLASSIFIED AS INLAND PORTS FOR THE PURPOSE OF U/S. 80IA(4A) OF THE ACT. THE JURISDICTIONAL HIGH COURT DECISION IN THE ASSESSEE' S OWN CASE WAS NOT ACCEPTED BY THE DEPARTMENT AND PROPOSAL FOR FILING SLP WAS SENT TO THE BOARD TO FILE BEFORE THE HON'BLE SUPREME COURT AND PRAYED FOR SETTING AS IDE THE ORDER OF CIT(A). CONTRA, THE LD. AR OF THE ASSESSEE RELIED ON THE OR DERS OF THE CIT(A) AND SUPPORTED HIS SUBMISSIONS WITH THE DECISION IN THE ASSESSEE'S OWN CASE OF THE JURISDICTIONAL HIGH COURT. 6. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATE RIAL ON RECORD AND JUDICIAL DECISIONS. THE LD. DR CONTENTION THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITION WITHOUT CONSIDERING THE FACTS THAT THE CONTAINER FREIGHT STATION CANNOT BE CLASSIFIED AS INLAND PORT. WHEREAS, THE LD. AR FILED THE COPY OF THE JURISDICTIONAL HIGH COURT DECISION IN ASSESSEE'S OW N CASE IN CIT VS KAILASH SHIPPING SERVICES PVT. LTD., IN TCA NO. 497/2015 DA TED 23.07.2015, WHERE THE HON'BLE HIGH COURT HAS HELD AT PARA 9 AS UNDER: 'IN VIEW OF THE STATUS OF CFS HAVING BEEN CLARIFI ED BY THE MINISTRY OF COMMERCE AND INDUSTRY AS 'INLAND PORTS' AND THE CHE NNAI PORT TRUST HAS ISSUED A CERTIFICATE STATING THAT THE CFS OF THE AS SESSEE MAY BE CONSIDERED AS EXTENDED ARM OF THE PORT IN ACCORDANCE WITH THE CBDT CIRCULAR NO. 793 DATED 23.06.2000 READ WITH CIRCULAR NO. 133/98 CUS DATED 22.12.1995 OF THE CENTRAL BOARD OF EXCISE AND CUSTOMS, NEW DELHI, WE HOLD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT UNDER SECTION 8 0IA OF THE INCOME TAX ACT.' :-6-: I.T.A. NO. 2624/MDS/2016 THE FACT THAT THE REVENUE HAS NOT ACCEPTED THE DECI SION OF JURISDICTIONAL HIGH COURT AND PROPOSAL WAS SENT TO THE BOARD FOR FILING THE SLP WITH THE HON'BLE SUPREME COURT. WE ARE OF THE OPINION THAT THE JURI SDICTIONAL HIGH COURT DECISION IS BINDING ON THE AUTHORITIES IN THE STATE OF TAMIL NADU & PUDUCHERRY. WE FIND THE LD. CIT(A) HAS ALLOWED THE CLAIM FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT IN ASSESSEE'S OWN CASE. ACCORDINGLY, WE ARE NOT INCLINE TO INTERFERE WITH THE ORDER OF CIT(A) AND UPHELD THE SAME AND DISMISS THE GROUNDS OF THE REVENUE. 7. IN THE RESULT, REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 24TH DAY OF MARCH, 2017 AT CHENNAI. SD/ - ( ) ( SANJAY ARORA) / ACCOUNTANT MEMBER SD/ - ( . ) (G. PAVAN KUMAR) & /JUDICIAL MEMBER /CHENNAI, 0 /DATED: 24TH MARCH, 2017 JPV & )'+23 43-+ /COPY TO: 1. $%/ APPELLANT 2. )*$% /RESPONDENT 3. 5+ ( )/CIT(A) 4. 5+ /CIT 5. 367 )'+' /DR 6. 789 /GF