DCIT, CHENNAI V. A.S.Shipping Agencies Pvt. Ltd., CHENNAI

ITA 2763/CHNY/2014

• Counselvise Citation: 276321714 RSA 2014
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 07-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: A S SRIRAMAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.2763, 2764, 2765, 2766 & 2767/MDS/2014 ( )( / ASSESSMENT YEARS : 2006-07, 2007-08, 2008-09, 2010- 11 & 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(1), CHENNAI - 600 034. V. M/S A.S. SHIPPING AGENCIES PVT. LTD., NO.113, (OLD NO.55), ARMENIAN STREET, CHENNAI - 600 034 PAN : AAACA 2906 N (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. P. RADHAKRISHNAN, JCIT -.+, / 0 / RESPONDENT BY : SH. A.S. SRIRAMAN, ADVOCATE 1 / 2% / DATE OF HEARING : 09.09.2015 3') / 2% / DATE OF PRONOUNCEMENT : 13.11.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE APPEALS OF THE REVENUE ARE DIRECTED AGAI NST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, CHENNAI, FOR THE ASSESSMENT YEARS 2006-07, 2007-08, 2008-09, 2010-11 AND 2011-12. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN ALL THE APPEALS, WE HEARD THE APPE ALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2 I.T.A. NOS.2763 TO 2767/MDS/14 2. SH. P. RADHAKRISHNAN, THE LD. DEPARTMENTAL REPRE SENTATIVE, SUBMITTED THAT THE ASSESSEE IS ENGAGED ITSELF IN TH E BUSINESS OF CLEARING AND FORWARDING AGENCY IN THE SEA PORT. TH E ASSESSEE IS ALSO OWNING AND OPERATING A CONTAINER FREIGHT STATI ON. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80-IA OF T HE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FROM OPERATING CONTA INER FREIGHT STATION. ACCORDING TO THE LD. D.R., CONTAINER FREI GHT STATION IS NOT AN INFRASTRUCTURE FACILITY AS DEFINED IN SECTION 80 -IA OF THE ACT. CONTAINER FREIGHT STATION CANNOT BE CONSTRUED EITHE R AS A PORT OR INLAND PORT. THE ASSESSEE HAS NOT ENTERED INTO A NY AGREEMENT WITH GOVERNMENT OF INDIA OR ANY OTHER LOCAL AUTHORI TY FOR CREATION OF INFRASTRUCTURE FACILITY. SINCE THE CONDITIONS STIP ULATED UNDER SECTION 80-IA WERE NOT FULFILLED, THE ASSESSING OFFICER REJ ECTED THE CLAIM OF THE ASSESSEE UNDER SECTION 80-IA OF THE ACT. HOWEV ER, THE CIT(APPEALS) FOUND THAT THE CONTAINER FREIGHT STATI ON SET UP BY THE ASSESSEE CAN BE CONSTRUED AS PORT OR INLAND PORT AN D THEREFORE, ELIGIBLE FOR THE BENEFIT OF DEDUCTION UNDER SECTION 80-IA OF THE ACT. THE CIT(APPEALS) HAS PLACED HIS RELIANCE ON THE DEC ISION OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR S 2008-09 AND 2009-10 IN I.T.A. NOS.1032 & 1033/MDS/2013. 3 I.T.A. NOS.2763 TO 2767/MDS/14 3. ON THE CONTRARY, SH. A.S. SRIRAMAN, THE LD.COUNS EL FOR THE ASSESSEE, SUBMITTED THAT FOR THE ASSESSMENT YEARS 2 008-09 AND 2009-10, THIS TRIBUNAL IN ASSESSEE'S OWN CASE IN I. T.A. NOS.1032 & 1033/MDS/2013, BY AN ORDER DATED 21.11.2013, FOUND THAT THE CONTAINER FREIGHT STATION OPERATED BY THE ASSESSEE HAS TO BE CONSTRUED AS INLAND PORT, THEREFORE, ELIGIBLE FOR D EDUCTION UNDER SECTION 80-IA OF THE ACT. THIS TRIBUNAL PLACED HIS RELIANCE ON ITS EARLIER ORDER IN THE ASSESSEE'S OWN CASE FOR ASSESS MENT YEARS 2003-04 AND 2005-06. REFERRING TO AN UNREPORTED JU DGMENT OF MADRAS HIGH COURT, A COPY OF WHICH IS FILED BY THE ASSESSEE, IN CIT V. M/S A.L. LOGISTICS PVT. LTD. IN TAX CASE (APPEAL ) NO.1031 OF 2014 DATED 23.12.2014, THE LD.COUNSEL SUBMITTED THAT ON IDENTICAL SET OF FACTS, THE MADRAS HIGH COURT FOUND THAT CONTAINER F REIGHT STATION IS A PORT OR INLAND PORT. IN THE ABSENCE OF A SPECIFI C EXCLUSION OF CONTAINER FREIGHT STATION IN CLAUSE (D) OF EXPLANAT ION TO SECTION 80- IA (4)(I) OF THE ACT, THE MADRAS HIGH COURT FOUND T HAT CONTAINER FREIGHT STATION IS AN INFRASTRUCTURE FACILITY ELIGI BLE FOR DEDUCTION UNDER SECTION 80-IA OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDL Y, THE ASSESSEE 4 I.T.A. NOS.2763 TO 2767/MDS/14 OWNS AND OPERATES A CONTAINER FREIGHT STATION. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE CONTAINER F REIGHT STATION FORMS PART OF PORT OR INLAND PORT WITHIN THE MEANIN G OF SECTION 80-IA OF THE ACT. WE HAVE CAREFULLY GONE THROUGH THE PRO VISIONS OF SECTION 80-IA OF THE ACT, MORE PARTICULARLY, SUB-SE CTION (4) OF SECTION 80-IA OF THE ACT. SUB-SECTION (4) OF SECTI ON 80-IA OF THE ACT CLEARLY SAYS THAT AN ENTERPRISE CARRYING ON THE BUS INESS OF DEVELOPING OR OPERATING AND MAINTAINING ANY INFRAST RUCTURE FACILITY WHICH FULFILLS ALL THE CONDITIONS PRESCRIBED IN SUB -SECTION (4) OF SECTION 80-IA OF THE ACT, IS ELIGIBLE FOR THE BENEF IT OF DEDUCTION. EXPLANATION TO SECTION 80-IA(4) OF THE ACT CLARIFIE S THE INFRASTRUCTURE FACILITY. EXPLANATION (D) TO SECTION 80-IA(4)(I) O F THE ACT CLARIFIES THAT A PORT, AIRPORT, INLAND WATERWAY, INLAND PORT OR NA VIGATIONAL CHANNEL IN THE SEA ARE TO BE CONSIDERED AS INFRASTRUCTURE F ACILITY. IN THE CASE BEFORE US, THE ASSESSEE OWNS AND OPERATES CONTAINER FREIGHT STATION. THE ASSESSEE CLAIMS THAT CONTAINER FREIGH T STATION FORMS PART OF INLAND PORT. WE FIND THAT THE MADRAS HIGH COURT IN A.L. LOGISTICS PVT. LTD. (SUPRA), HAS EXAMINED THIS ISSU E AND FOUND THAT CONTAINER FREIGHT STATIONS ARE CUSTOMS AREA ATTACHE D TO THE PORT. BY REFERRING TO A COMMUNICATION SAID TO BE ISSUED B Y DEPARTMENT OF REVENUE, CENTRAL BOARD OF EXCISE AND CUSTOMS, MINIS TRY OF 5 I.T.A. NOS.2763 TO 2767/MDS/14 FINANCE, IT WAS FOUND THAT THE WORK RELATED TO CUST OMS IS PERFORMED AT THESE INLAND CONTAINER DEPOTS. ULTIMATELY, BY P LACING RELIANCE ON THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN A LL CARGO GLOBAL LOGISTICS LTD. V. DCIT (2012) 137 ITD 287 AND THE JUDGMENT OF THE DELHI HIGH COURT IN CONTAINER CORPORATION OF INDIA LTD. V. ACIT (2012) 346 ITR 140, THE MADRAS HIGH COURT FOUND THA T THE CONTAINER FREIGHT STATION IS INLAND PORT, THEREFORE , IT IS AN INFRASTRUCTURE FACILITY WITHIN THE MEANING OF SECTI ON 80-IA(4) OF THE ACT. IN VIEW OF THIS JUDGMENT OF MADRAS HIGH COURT , THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT CONTAINER FREIGHT ST ATION HAS TO BE CONSTRUED AS INLAND PORT, HENCE, FORMS PART OF INFR ASTRUCTURE FACILITY WITHIN THE MEANING OF SECTION 80-IA(4) OF THE ACT. 5. THE NEXT CONTENTION OF THE LD. D.R. IS THAT NO A GREEMENT WAS ENTERED INTO BETWEEN THE ASSESSEE AND GOVERNMENT OR ANY LOCAL AUTHORITY FOR ESTABLISHING THE INFRASTRUCTURE FACIL ITY. 6. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 80- IA OF THE ACT. SECTION 80-IA(4)(I)(B) CLEARLY SAYS THAT SECTION 80-IA OF THE ACT APPLIES TO AN ENTERPRISE, WHICH HAS ENTE RED INTO AN AGREEMENT WITH CENTRAL GOVERNMENT OR A STATE GOVERN MENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR DEV ELOPING OR 6 I.T.A. NOS.2763 TO 2767/MDS/14 OPERATING AND MAINTAINING OR DEVELOPING, OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY. IN VIEW OF THE MAND ATORY REQUIREMENT UNDER SECTION 80-IA(4)(I)(B) OF THE ACT, THE ASSESS EE HAS TO NECESSARILY ENTER INTO AN AGREEMENT EITHER WITH CEN TRAL GOVERNMENT OR STATE GOVERNMENT OR WITH LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR DEVELOPING CONTAINER FREIGHT STATION. 7. THE MADRAS HIGH COURT IN THE CASE OF A.L. LOGIST ICS PVT. LTD. (SUPRA) HAS EXAMINED THIS ISSUE. IN THE CASE BEFOR E CIT(APPEALS), THE ASSESSEE MADE AN APPLICATION FOR SETTING UP OF CONTAINER FREIGHT STATION. THE DEPARTMENT OF COMMERCE APPROV ED THE PROPOSAL OF THE ASSESSEE FOR SETTING UP OF CONTAINE R FREIGHT STATION AT HALDIA. ACCORDINGLY, THE HIGH COURT FOUND THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA OF THE A CT. IN THE CASE BEFORE US, EVEN THOUGH THE ASSESSING OFFICER SPECIF ICALLY CLAIMED THAT THE ASSESSEE HAS NOT ENTERED INTO ANY AGREEMEN T EITHER WITH STATE GOVERNMENT OR ANY OTHER AUTHORITY OR LOCAL BO DY, THE CIT(APPEALS) HAS NOT EXAMINED THIS CONTENTION OF TH E ASSESSING OFFICER. THE CIT(APPEALS) SIMPLY PLACED HIS RELIAN CE ON THE DECISION OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FO R ASSESSMENT YEARS 2008-09 AND 2009-10. WE HAVE CAREFULLY GONE THROUGH THE 7 I.T.A. NOS.2763 TO 2767/MDS/14 DECISION OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FO R ASSESSMENT YEARS 2008-09 AND 2009-10. THIS TRIBUNAL, BY PACIN G RELIANCE ON THE EARLIER ORDER IN THE ASSESSEE'S OWN CASE FOR AS SESSMENT YEARS 2003-04 AND 2005-06, FOUND THAT THE CONTAINER FREIG HT STATION IS A PART OF INLAND PORT, THEREFORE, ELIGIBLE FOR DEDUCT ION UNDER SECTION 80-IA OF THE ACT. THE TRIBUNAL HAS NOT EXAMINED TH E CONTENTION OF THE ASSESSING OFFICER WHETHER THERE WAS ANY AGREEME NT BETWEEN THE ASSESSEE AND GOVERNMENT OR ANY OTHER AUTHORITIE S. THE MATERIAL AVAILABLE ON RECORD DOES NOT INDICATE ANY APPROVAL OBTAINED BY THE ASSESSEE AS IN THE CASE OF A.L. LOG ISTICS PVT. LTD. (SUPRA) BEFORE THE MADRAS HIGH COURT. AS FOUND BY THE TRIBUNAL IN THE CASE OF A.L. LOGISTICS PVT. LTD. (SUPRA), EVEN THOUGH NO SPECIFIC AGREEMENT WAS REQUIRED, APPROVAL FROM GOVERNMENT OR GOVERNMENT AGENCY IS REQUIRED FOR CLAIMING DEDUCTION UNDER SEC TION 80-IA OF THE ACT. SINCE THESE ASPECTS WERE NOT EXAMINED BY THE CIT(APPEALS), EVEN THOUGH A SPECIFIC ISSUE WAS RAISED BY THE ASSE SSING OFFICER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER IN THE LIGHT O F THE JUDGMENT OF MADRAS HIGH COURT IN A.L. LOGISTICS PVT. LTD. (SUPR A). ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE A ND ISSUE OF DEDUCTION UNDER SECTION 80-IA OF THE ACT IS REMITTE D BACK TO THE FILE 8 I.T.A. NOS.2763 TO 2767/MDS/14 OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SH ALL RE-EXAMINE THE ISSUE AND FIND OUT WHETHER THE ASSESSEE HAS OBT AINED ANY APPROVAL OR ENTERED INTO ANY AGREEMENT WITH GOVERNM ENT OR GOVERNMENT AGENCY, AS IN THE CASE OF A.L. LOGISTICS PVT. LTD. (SUPRA) AND THEREAFTER DECIDE THE SAME IN ACCORDANC E WITH LAW, AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 8. IN THE RESULT, ALL THE APPEALS FILED BY THE REVE NUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 13 TH NOVEMBER, 2015 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 13 TH NOVEMBER, 2015. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-I, CHENNAI-34 4. 1 92 /CIT, CHENNAI-I, CHENNAI 5. 7: -2 /DR 6. 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