ACIT, CHENNAI V. M/s. Continental Container Freight Station P. Ltd., CHENNAI

ITA 2786/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7461 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 26-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: A.S.SRIRAMAN
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 142(1); 143(1); 201; 143(2)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I T.A. NO. 27 86 /MDS/201 6 / ASSESSMENT YEAR :20 1 0 - 1 1 THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1 ( 2 ) , CHENNAI 600 034 . VS. M/S. CONTINENTAL CONTAINER FREIGHT STATION P. LTD., NO. 81, SWAMY COMPLEX, THAMBU CHETTY STREET, CHENNAI 600 001. [PAN: AA DC C 3448C ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S HIVA SRINIVAS , J CIT / RESPONDENT BY : SHRI A.S. SRIRAMAN , A DVOCATE / DATE OF HEARING : 2 6 . 1 2 .201 6 / DATE OF P RONOUNCEMENT : 24 . 0 3 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1 , CHENNAI DATED 0 1 . 0 7 .201 6 RELEVANT TO THE ASSESSMENT YEAR 20 10 - 1 1 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN D ELETING THE DISALLOWANCE OF .1,79,70,172/ - MADE UNDER SECTION 80IA(4) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] . 2. BRIEF FACTS OF THE CASE ARE THE ASSESSEE IS ENGAGED IN THE BUSINESS OF I.T.A. NO . 2 786 /M/ 16 2 OPERATING CONTAINER FREIGHT STATIONS (CFS)/INLAND CONTAINER DEPOTS (ICD) AT PONDY, KARUR, TIRUPUR AND TUTICORIN. THE ASSESSEE HAS FILED ITS RETURN ADMITTING NIL INCOME AFTER CLAIMING DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 09.03.2012. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUT INY AND NOTICE UNDER SECTION 143(2) OF THE ACT DATED 25.08.2011 WAS DULY ISSUED TO THE ASSESSEE ON 30.08.2011. FURTHER, NOTICE UNDER SECTION 142(1) OF THE ACT WITH A DETAILED QUESTIONNAIRE WAS ISSUED ON 26.08.2011. THE ASSESSEE WAS ASKED TO SUBSTANTIATE IT S CLAIM OF DEDUCTION UNDER SECTION 8 0 IA OF THE ACT . IN RESPONSE TO THE ABOVE, THE ASSESSEE HAS FILED ALL DETAILS INCLUDING FORM 10CCB . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT UNDER SECTION 143(3 ) OF THE ACT ASSESSING TOTAL INCOME OF THE ASSESSEE AT .1,79,70,170/ - AFTER MAKING DISALLOWANCE OF .1,79,70,172/ - . 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND BY FOLLOWING T HE ORDER FOR THE ASSESSMENT YEAR 2009 - 10, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO MODIFY THE ORDER AND ALLOWED THE GROUND RAISED BY THE ASSESSEE. 4. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT BEEN ENTERED INTO AN AGREEMENT WITH THE STATE GOVERNMENT, CENTRAL GOVERNMENT , LOCAL AUTHORITY I.T.A. NO . 2 786 /M/ 16 3 OR ANY OTHER STATUTORY BODIES FOR DEVELOPMENT, OPERATION AND MAINTENANCE OF INFRASTRUCTURAL FACILITIES AS MANDATED UNDER SUB - CLAUSE (B) OF SECTI ON 80IA(4)(I) OF THE ACT. THEREFORE, HE HAS PLEADED THAT THE ORDER OF THE LD. CIT(A) ON THIS ISSUE SHOULD BE REVERSED. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED IN FAV OUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCHES OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR EARLIER ASSESSMENT YEAR AND PRAYED THAT THE SAME SHOULD BE FOLLOWED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. 6. WE HAVE HEARD BOTH SIDES, PERUSE D THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSEE HAS CLAIMED DEDUCTION OF .1,79,70,172/ - BY FILING FORM 10CCB, WHEREIN, IN COL. NO. 14 THE NATURE OF INFRASTRUCTURE FACILITY, THE ASSESSEE HAS MENTIONED AS INLAND PORT AS SPECIFIED IN SECTION 80IA(4)(I) OF THE ACT. BY FILING APPLICATION, THE ASSESSEE HAS OBTAINED APPROVAL OF THE CUSTOMS AUTHORITIES AND THE SAME HAS BEEN NOTIFIED BY PUBLIC NOTICE ON VARIOUS DATES FOR VARIOUS LOCATIONS FOR THE OPERATION OF CFS . THIS FACT WAS NOT DISPUTED BY THE DEPARTMENT. THE ONLY DISPUTE OF THE DEPARTMENT IS THAT THE ASSESSEE HAS NOT BEEN ENTERED INTO AN AGREEMENT WITH THE STATE GOVERNMENT, CENTRAL GOVERNMENT, LOCAL AUTHORITY OR ANY OTHER STATUTORY BODIES FOR DEVELOPMENT, OPE RATION AND MAINTENANCE OF INFRASTRUCTURAL FACILITIES AS MANDATED UNDER SUB - CLAUSE (B) OF I.T.A. NO . 2 786 /M/ 16 4 SECTION 80IA(4)(I) OF THE ACT. ON APPEAL, THE LD. CIT(A) HAS OBSERVED AS UNDER: 7. I HAVE CAREFULLY CONSIDERED THE FACT IN ISSUE, THE SUBMISSIONS MADE BY THE APPELLA NT AND THE MATERIAL ON RECORD. I HAVE ALSO PERUSED THE ORDER OF LD. CIT(A) IN THE CASE OF THE APPELLANT FOR A.Y. 2009 - 10 IN ITA NO. 304/11 - 12/A - 1 DATED 30.09.2014 WHERE THIS ISSUE HAS BEEN CONSIDERED IN DETAIL IN PARA 4.2 OF THE SAID ORDER AND APPEAL HAS B EEN ALLOWED IN FAVOUR OF THE APPELLANT. RESPECTFULLY FOLLOWING THE DECISION, THE MATERIAL FACTS REMAINING THE SAME, THE PLEA MADE BY THE APPELLANT WITH REGARD TO CLAIM U/S 80IA(4) IS ALLOWED. THE AO IS DIRECTED TO MODIFY THE ORDER ACCORDINGLY. THIS GROUND OF APPEAL IS ALLOWED. 6.1 AS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE, WE HAVE PERUSED THE ORDERS OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2009 - 10 IN I.T.A. NO.136/MDS/2015 FILED BY THE REVENUE AS WELL AS ASSESSEE IN I.T.A. NOS.13 94/MDS/2014 & 94/MDS/2015 VIDE ORDER DATED 25.11.2016, WHEREIN, WHILE DECIDING SIMILAR ISSUE ON AN IDENTICAL FACTS AND CIRCUMSTANCES, THE COORDINATE BENCHES OF THE TRIBUNAL HAS OBSERVED AND HELD AS UNDER: 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THERE IS NO DISPUTE THAT ASSESSEE WAS OPERATING A CONTAINER FREIGHT STATION AND PROVIDING WAREHOUSING FACILITIES. LD. ASSESSING OFFICER HIMSELF HAD STATED THAT THERE WAS APPROVAL FROM THE ASSESSEE FOR ITS CFS OP ERATION AT CHENNAI, TUTICORIN, TIRUPPUR AND KARUR AT PARA 3 OF HIS ORDER. THAT WAREHOUSING FACILITIES OPERATED BY THE ASSESSEE WERE PART AND PARCEL OF THE CFS ACTIVITY HAS NOT DISPUTED BY THE REVENUE. HON BLE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPO RATION OF INDIA LTD VS. ACIT 340 ITR 140 HAD HELD THAT EVEN INLAND CONTAINER DEPOT WOULD BE ELIGIBLE FOR DEDUCTION U/S. 80IA(4) OF THE ACT WHEN IT WAS DOING ACTIVITIES SIMILAR TO CFS. HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF A.L. LOGISTICS PVT. LTD (SUPRA) HAD ALSO TAKEN A SIMILAR VIEW. THEREFORE, WE ARE OF THE OPINION THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN TAKING A VIEW THAT WAREHOUSING RENTAL RECEIVED BY THE ASSESSEE IN CORPORATE OFFICE I.T.A. NO . 2 786 /M/ 16 5 ENNORE AND PONDICHERRY WERE ELIGI BLE FOR DEDUCTION U/S.80IA(4) OF THE ACT CONSIDERING THESE AS PART OF THE CFS FACILITY. 12. WITH RESPECT TO TRANSPORTATION REVENUE RELATING TO PONDICHERRY AND TUTICORIN TO PORTS, IT IS NOT DISPUTED THAT SUCH TRANSPORTATION CHARGES WERE RECEIVED FOR MOVIN G GOODS IN CARGO CONTAINERS TO THE PORTS. HENCE, THE DISTINCTION SOUGHT TO BE MADE BETWEEN AREAS OF TRANSPORT WAS NOT IN OUR OPINION JUSTIFIED. SIMILARLY, INCIDENTAL CHARGES ON ACCOUNT OF TRAILER DETENTION AND VEHICLE LEASE, WERE A PART OF THE BOUQUET OF S ERVICES OFFERED BY THE ASSESSEE AS A PART OF ITS CFS DIVISION. HENCE, WE ARE OF THE OPINION THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE U/S. 80IA(4) OF THE ACT ON THESE ITEMS. 6. 2 RESPECTFULLY FOLLOWI NG THE DECISION OF THE COORDINATE BENCHES OF THE TRIBUNAL, WE SUSTAIN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DISMISS THE GROUND RAISED BY THE REVENUE. 7 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 24 TH MARCH, 201 7 AT CHENNAI. SD/ - SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 24 . 0 3 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.