STAR TRACK TERMINALS P.LTD, MUMBAI V. PR CIT 8, MUMBAI

ITA 3221/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9936 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 10-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 06-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS AMRITA RANJAN
• Assessee Lawyers: S KRISHNAN
• Keywords: Revision of order
• Section: 143(3); 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE S HRI B.R. BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 3221 /MUM/20 1 6 ASSESSMENT YEAR: 2011 - 2012 M/S STAR TRACK TERMINALS PVT. LTD., C/O APM TERMINALS INDIA PVT. LTD., URMI ESTATE , 11 TH FLOOR, 95 GANPATRAO KADAM MARG, LOWER PAREL (WEST), MUMBAI - 400013 PAN: AAHCS5182K VS. THE PRINCIPAL COMMISSIONER OF INCOME TAX 8, ROOM NO. 611, 6 TH FLOOR, AAYKAR BHAWAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) APPELLAN T BY : SHRI S. KRISHNAN (AR) RESPONDENT BY : MRS. AMRITA RANJAN (DR) DATE OF HEARING: 10/04 /201 7 DATE OF PRONOUNCEMENT: 07/ 0 7 /201 7 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FIL ED BY THE ASSESSEE AGAINST ORDER DATED 26/02/2016 PASSED BY THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX - 8 , MUMBAI, FOR THE A S S ESSMENT YEAR 2011 - 12 , WHEREBY THE LD. PR. CIT HAS SET ASIDE THE ASSESSMENT ORDER BY EXERCISING POWERS U/S 263 OF THE INCOME TAX ACT 1961 (HEREINAFTER TO BE REFERRED AS THE ACT) AND DIRECTED THE AO TO EXAMINE THE CLAIM OF DEDUCTION U/S 80 IA ( 4) OF THE ACT AFRESH. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF OPERATING CONTAINER FREIGHT STATI ON FILED ITS RETURN OF INCOME 2 ITA NO. 3221/MUM/2016 ASSESSMENT YEAR: 2011 - 12 DECLARING THE TOTAL INCOME O F RS. 34,13,700/ - . AFTER SCRUTINY , ASSESSMENT ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) WAS PASSED BY THE AO ACCEPTING THE RETURN FILED BY THE ASSESSEE. 3. SINCE, THE ASSESS EE COMPANY HAD MADE A CLAIM OF DEDUCTION U/S 80IA OF THE ACT , AMOUNTING TO RS. 2,66,44,480/ - FOR THE YEAR UNDER CONSIDERATION AND THE SAME HAD BEEN ALLOWED BY THE ASSESSING OFFICER, THE PRINCIPAL COMMISSIONER OF INCOME TAX, ISSUED NOTICE U/S 263 REQUIRING THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ASSESSMENT ORDER DATED 03.03.2014 SHOULD NOT BE CANCELLED/REVISED U/S 263 OF THE ACT. T HE CONTENTS OF NOTICE ARE REPRODUCED BELOW: I) THE COMPANY IS ENGAGED IN THE BUSINESS OF OPERATING CONTAINER FREIGHT STATIONS (CF S) INLAND CONTAINED DEPOT (ICS) AT DADRI , NOIDA (UP). AS PER SUB SECTION (4) OF SECTION 80IA OF THE INCOME TAX ACT, 1961, IT IS CLARIFIED THAT INDUSTRIAL UNDERTAKING ENGAGED IN INFRASTRUCTURE DEVELOPMENT QUALIFIED FOR DEDUCTION. FROM A PERUSAL OF THE RECOR DS FOR THE RELEVANT A.Y. 2011 - 12, IT IS SEEN THAT IN THE INSTANT CASE, THE CONTAINER FREIGHT STATION (CFS) IN RESPECT OF WHICH THE DEDUCTION U/S 80IA (4) WAS CLAIMED IS NOT OWNED BY THE COMPANY. IT HAS ENTERED INTO A SUB - LEASE AGREEMENT FOR LAND AT DADRI, GREATER NOIDA, WITH THE CONTAINER CORPORATION OF INDIA LTD. (CCL). HENCE, IT HAS NOT FULFILLED THE CONDITION LAID DOWN IN SUB - CLAUSE (A), CLAUSE (I) OF SUB - SECTION (4) OF SECTION 80IA OF THE ACT WHICH STATES THAT IT IS OWNED BY A COMPANY REGISTERED IN INDI A OR BY A CONSORTIUM OF SUCH COMPANIES. II) SECONDLY, AS PER CBDT CIRCULAR NO. 793 DATED 23.06.2000, THE STRUCTURES AT PORTS FOR PURPOSE OF SECTION 80IA OF INCOME TAX ACT ONLY IF THE CONCERNED PORT AUTHORITY HAS ISSUED A CERTIFICATE THAT THE SAID STRUCTURE F ORM PART OF THE PORT AN SUCH STRUCTURES HAVE BEEN BUILT UNDER BOT OR BOLT SCHEME ETC. THIS CIRCULAR WAS MODIFIED FOR A.Y. 2002 - 03 ONWARDS BY CBDT CIRCULAR NO. 10 DATED 16.12.2005 ACCORDING TO WHICH THE ONLY CONDITION TO BE SATISFIED BY THE STRUCTURES AT PO RTS FOR STORAGE, LOADING, 3 ITA NO. 3221/MUM/2016 ASSESSMENT YEAR: 2011 - 12 UNLOADING ETC TO FALL UNDER THE DEFINITION OF PORT FOR THE PURPOSE OF SECTION 80IA OF THE I.T. ACT WOULD BE THAT THE CONCERNED PORT AUTHORITY HAVE ISSUED A CERTIFICATE THAT THE SAID STRUCTURE FORMS A PART OF THE PORT. HOWEVER, FRO M TH E RECORDS IT IS SEEN THAT THE ASSESSING OFFICER HAS NOT CALLED FOR AND YOU HAVE NOT SUBSTANTIATED BY PRODUCING A CERTIFICATE FROM PORT AUTHORITIES TO THIS EFFECT. III) FURTHER, VIDE CBDT CLARIFICATION DATED 06.01.2011, IN WHICH THE CIRCULARS DATED 23.06.20 00 AND 16.12.2005 WERE CONSIDERED, IT WAS CLARIFIED THAT ICDS & CFSS ARE NOT PORTS LOCATED ON ANY INLAND WATER WAY, RIVER OR CANAL AND THEREFORE THEY CANNOT BE CLASSIFIED AS INLAND PORT FOR THE PURPOSE OF SEC. 80IA (2) OF THE ACT. IV) IN COMMON PARLANCE, A ND ALSO IN COMMERCIAL WORLD AND IT IS STATUTORILY RECOGNIZED, THAT A PORT IS ASSOCIATED WITH SHIPS AND IT IS A PLACE OF SHELTER WHERE SHIPS MAY LOAD AND UNLOAD THEIR CARGO. A CARGO WOULD, THEREFORE NOT INCLUDE AN INLAND PORT. V) IN THE NOTIFICATION NO. SO 254(E) DATED 14.3.2000 ISSUED BY THE CBDT INLAND PORT DOES NOT CONSTITUTE AS INFRASTRUCTURAL FACILITY FOR THE PURPOSE OF SECTION 10 (23G) AND 80IA OF THE ACT. VI) THE FINANCE ACT, 2001 FURTHER RATIONALIZED THE DEFINITION OF INFRASTRUCTURAL FACILITIES. THE D EFINITION OF INFRASTRUCTURAL FACILITIES AS GIVEN IN THE EXPLANATION (4) OF SECTION 80IA OF THE ACT INTRODUCED W.E.F. 01.04.2012 HAS OMITTED THE WORDS ANY OTHER PUBLIC FACILITY OF A SIMILAR NATURE AS MAY BE NOTIFIED BY THE BOARD IN THIS BEHALF IN THE OFFIC IAL GAZETTE, UNDER THE EARLIER PROVISIONS, SEVERAL PUBLIC FACILITIES WERE NOTIFIED BY THE BOARD AS INFRASTRUCTURAL FACILITIES. IN THIS CONTEXT, IT WAS CLARIFIED THAT SUCH PROJECTS FOR WHICH AGREEMENTS HAVE BEEN ENTERED ON OR OTHER 1.4.1 9 95 BUT BEFOR E 31. 3. 2001 AND WHICH HAVE BEEN NOTIFIED BY THE BOARD ON OR BEFORE 31.03.2001 WOULD CONTINUE TO BE EXEMPT SUBJECT TO THE FULFILLMENT OF THE CONDITIONS PRESCRIBED IN SECTION 80IA (4)(I)(B) AS IT EXISTED PRIOR TO ITS SUBSTITUTION BY THE FINANCE ACT, 2001 (AS NOTI FIED BY THE CBDT 4 ITA NO. 3221/MUM/2016 ASSESSMENT YEAR: 2011 - 12 IN ITS CIRCULAR NO. 7/2002 DATED 26.02.2002). IT IS SEEN FROM THE RECORDS THAT IN THIS CASE CFS IS INCORPORATED AFTER 31.03.2001. 4. ANOTHER SHOW CAUSE NOTICE WAS ISSUED BY THE LD. PRINCIPAL COMMISSIONER DURING THE COURSE OF PROCEEDINGS WHICH READS AS UNDER: 2 IN CONTINUATION OF SHOW - CAUSE NOTICE DATED 19.03.2016, IT IS SEEN FROM RECORDS THAT ASSESSMENT U/S 143 (3) OF THE INCOME TAX ACT, 1961 FOR A.Y. 2011 - 12 WAS COMPLETED ON 03.03.2014. TOTAL INCOME OF THE ASSESSEE AS PER ORDER U/S 1 43 (3) WAS DETERMINED AT RS. 3413700/ - . THE AO HAD NOT EXAMINED WHETHER THE ASSESSEE FULFILLED CONDITIONS PROVIDED IN SECTION 80IA (4)(I)(B) VIZ., THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WHETHER CENTRAL GOVERNMENT OR STATE GOVERNMENT OR A LOCAL AUTHORI TY OR ANY OTHER STATUTORY BODY FOR (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY. THE AO HAD THEREBY NOT EXAMINED WHETHER THE SAID INFRASTRUCTURE FACILITY WAS SET UP FOR THE P URPOSE OF PUBLIC UTILITY. 3. THE AFORESAID ASPECT, WHICH, PRIMA FACIE WARRANTED ENQUIRY ON THE FACTS AND CIRCUMSTANCES OF THE CASE, HAS NOT BEEN ENQUIRED INTO. ON THE FAC TS AND CIRCUMSTANCES OF THE CAS E IT IS CLEAR THAT IN RESPECT OF THE AFORESAID ASPECT , THE ORDER OF THE AO SUFFERS FROM ERROR WITHIN THE MEANING OF SECTION 263 OF THE I.T. ACT, 1961, THIS ERROR HAS RESULTED IN PREJUDICE TO THE REVENUE WITHIN THE MEANING OF SECTION 263 INASMUCH AS THE CLAIM OF THE ASSESSEE IS ALLOWED IN EXCESS AND/OR INCOME OF THE ASSESSEE HAS BEEN UNDER ASSESSED. ACCORDINGLY, IN RESPECT OF THIS ASPECT, ENUMERATED IN THE FOREGOING PARAGRAPHS PROVISIONS OF SECTION 263 OF THE INCOME - TAX ACT, 1961 ARE CLEARLY ATTRACTED TO THE FACTS OF THIS CASE. 5. IN RESPONSE TO THE SAID NOT ICES T HE ASSESSEE SUBM ITTED DETAILED RE P LY . R ELYING UPON THE DECISION OF THE APEX COURT IN CIT BHOPAL VS. GM. MITTAL, STAND STEEL PVT. LTD. (2003) 262 ITR 255 (SC) AND DECISION OF SPECIAL BENCH, ITAT, MUMBAI IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LTD. VS . DCIT 23 TAXMANN.COM 5 ITA NO. 3221/MUM/2016 ASSESSMENT YEAR: 2011 - 12 103 , THE ASSESSEE CONTENDED THAT IN VIEW OF THE LAW LAID DOWN BY THE HONBL;E SUPREME COURT AND THE DECISION OF THE MUMBAI TRIBUNAL ABOVE REFERRED, INITIATION OF PROCEEDINGS U/S 263 OF THE ACT IS WITHOUT JURISDICTION. HOWEVER, THE LD. CIT (A) RELYING UPON THE LAW LAID DOWN BY UNDER THE SUPREME COURT IN MALABAR INDUSTRIAL COMPANY LTD. VS. CIT (2000) 243 ITR 83 (SC) , RAJALAKSHMI MILLS LTD. VS. ITO (2009) 313 ITR (AT) 182 CHENNAI, GEEVEE ENTERPRISES VS. ADDL. CIT (1975) 99 ITR (375), DEL HI, CIT VS. RALSON ENTERPRISES (2007) 288 ITR 322 (SC) AND CIT VS. HINDUSTAN LEVER LTD. (2012) 343 ITR 161 BOMBAY AND CIRCULARS ISSUED BY THE CBDT FROM TIME TO TIME , SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO EXAMINE THE ISSUE REL ATING TO DEDUCTION U/S 80IA (4) OF THE ACT A FRESH IN THE LIGHT OF THE OBSERVATION MADE IN THE ORDER. 6. AGGRIEVED BY THE ORDER OF LD. PR. CIT, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE US ON THE FOLLOWING EFFECTIVE GROUNDS: - GROUND 1: ORDER U/S. 2 63 DIRECTING RE - EXAMINATION OF DEDUCTION U/S. 80IA TO CONTAINER FREIGHT STATION (CFS) 1. LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX 8, MUMBAI (CIT) ERRED ON FACTS AND IN LAW IN SETTING ASIDE THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) OF TH E ACT, DIRECTING ASSESSING OFFICER (AO) TO EXAMINE AFRESH THE ISSUE OF CLAIM OF DEDUCTION U/S 80IA (4) OF THE ACT FOR CFS FACILITY OF THE APPELLANT DADRI. 1.1 THE LEARNED CIT HAS ERRED IN MISQUOTING/MISINTERPRETING VARIOUS FACTS, SUCH AS: THE LEARNED CIT E RRED IN QUOTING THAT THE CFS IN RESPECT OF WHICH DEDUCTION U/S 80IA (4) WAS CLAIMED IS NOT OWNED BY THE COMPANY MERELY BECAUSE THE SUBJECT LAND WAS TAKEN ON SUB - LEASE. THE LEARNED CIT ERRED IN REFERRING VARIOUS CIRCULARS/CLARIFICATION/NOTIFICATIO N DEALING WITH PORT WHEN APPELLAN T WAS CLAIMING DEDUCTION AS INLAND PORT AND SUCH 6 ITA NO. 3221/MUM/2016 ASSESSMENT YEAR: 2011 - 12 CIRCULAR/CLARIFICATION/NOTIFICATION WERE DEALT WITH BY THE SPECIAL BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS V. DCIT [23 TAXMANN.COM 103] AND TRI BUNAL HAS ALLOWED DEDUCTION U/S. 80IA TO CFS. 1.2 THE LEARNED CIT HAS ERRED IN LAW AND ON FACTS BY TREATING THE ORDER PASSED BY AO AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE EVEN THOUGH LEARNED AO HAS ALLOWED DEDUCTION UNDER SECTION 80IA (4) AFTER MAKING SUFFICIENT ENQUIRIES. THE ACTION OF THE AO WAS IN LINE WITH THE DECISION OF THE SPECIAL BENCH OF MUMBAI TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. V. DCIT [23 TAXMANN.COM 103] DATED 6 TH JULY 2012 AND DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD. VS. ACIT [21 TAXMANN.COM 317]. FURTHER THE LEARNED CIT FAILS TO APPRECIATE THAT THERE IS NOT A SINGLE DECISION AGAINST THE TAX PAYER FOR THEM TO TAKE A VIEW THAT THE ORDER PASSED BY THE AO IS ERRONEOUS. 1.3 THE LEA RNED CIT HAS ERRED IN LAW AND ON FACTS IN REFUSING TO FOLLOW JURISDICTIONAL BOMBAY HIGH COURT DECISION ON THE VERY SAME SUBJECT MERELY ON THE GROUND THAT SLP AGAINST THAT DECISION HAS BEEN ADMITTED BY HONBLE SUPREME COURT. THE APPELLANT PRAYS THAT ON TH E FACTS AND CIRCUMSTANCES OF THE CASE, REVISIONA R Y PROCEEDINGS UNDER SECTION 263 OF THE ACT SHOULD BE DROPPED. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, BY DELETION, SUBSTITUTION, MODIFICATION OR OTHERWISE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL EITHER BEFORE OR DURING THE HEARING OF THIS APPEAL. 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES CASE IS COVERED BY THE DECISION OF THE SPECIAL BENCH OF MUMBAI TRIBUNAL IN ALL CARGO GLOBAL LOGISTICS V. DCIT . SINCE, THE ID ENTICAL ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN THE SAID CASE , THE AO HAS RIGHTLY ALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IA(4) OF THE ACT. THEREFORE, THE LD. PR. COMMISSIONER HA D NO JURISDICTION TO EXERCISE POWERS U/S 263 O F THE ACT. HENCE, THE IMPUGNED ORDER IS LIABLE TO BE QUASHED. 7 ITA NO. 3221/MUM/2016 ASSESSMENT YEAR: 2011 - 12 8. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE FINDINGS OF THE LD. PR. COMMISSIONER. 9. WE HAVE PERUSED THE RECORD AND GONE THROUGH THE ORDERS PASSED BY THE AUTHORITI ES BELOW AND THE CASES RELIED UPON BY THE ASSESSEE AND LD. PR. COMMISSIONER. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER THE ASSESSEE IS ENTITLED FOR THE DEDUCTION CLAIMED U/S 80IA ( 4) OF THE ACT, OR WHETHER THE ASSESSMENT ORDER PASSED BY THE AO IS E RRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE TO EXERCISE JURISDICTION U/S 263 OF THE ACT BY THE LD. PR. COMMISSIONER? 10. AS POINTED OUT BY THE LD . COUNSEL FOR THE ASSESSEE THE IDENTICAL ISSUE HAS ALREADY BEEN DECIDED BY THE SPECIAL BENCH OF THE BOMBAY TRIBUNAL IN ALL CARGO GLOBAL LOGISTICS V. DCIT (SUPRA) . IN THE SAID CASE ONE OF THE ISSUES TO BE ADJUDICATED BY THE BENCH WAS W HETHER A CONTAINER FREIGHT STATION ENGAGED IN PERFORMING FUNCTIONS SUCH AS WAREHOUSING, CUSTOMS CLEARANCE, AND TRANSPORT OF GOODS FROM ITS LOCATION TO SEA - PORTS AND VICE - VERSA BY RAILWAY OR BY TRUCKS IN CONTAINERS, HAS TO BE REGARDED AS AN INLAND PORT WHOSE INCOME IS ENTITLED TO DEDUCTION UNDER SECTION 80 - I A(4) . THE SPECIAL BENCH DECIDED THE SAID ISSUE IN FAVOUR OF THE ASSE SSEE. THE RELEVANT PORTION OF THE FINDINGS OF THE SPECIAL BENCH ON THIS ISSUE READS AS UNDER: 65. WE HAVE CONSIDERED THE FACTS OF THE CASES AND SUBMISSIONS MADE BEFORE US. IT MAY BE MENTIONED THAT ONE OF THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE CASE OF CONTAINER CORPN. OF INDIA LTD. ( SUPRA ) IS NOT BASED ON ANY OF THE CIRCULARS ISSUED BY THE PORT AUTHORITIES, HOWEVER, THE CFS THE ASSESSEE HAS BEEN GRANTED SUCH CERTIFICATE. THE CERTIFICATE MENTIONS THAT THE CFS CARRIES ON PORT RELATED ACTIVITIES, AND IT MAY BE CONSIDERED AS AN EXTENDABLE ACTIVITY OF THE PORT RELATED ACTIVITIES. IT IS CLARIFIED THAT THE CFS HAS NOT BEEN BUILT ON BOT OR BOLT SCHEME 8 ITA NO. 3221/MUM/2016 ASSESSMENT YEAR: 2011 - 12 AND THAT IT IS SITUATED ON LAND WHICH DOES NOT BELONG TO THE PORT. THE LETTERS WRI TTEN BY PORT TRUST TO THE ASSESSEE ALSO STATE THAT THE MATTER HAS BEEN REFERRED TO THE INCOME TAX DEPARTMENT. THE DEPARTMENT HAS CLARIFIED THAT AN ICD/CFS DOES NOT CONSTITUTE AN INLAND PORT. IN THE CASE OF CIT V. ABG HEAVY INDUSTRIES LTD. [2010] 189 TAXMAN 54 (BOM.), THE HON'BLE COURT HAS HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80 - IA. HOWEVER THERE IS A VERY SALIENT DIFFERENCE IN FACTS THAT STRUCTURES WERE LO CATED AT PORT AND SUCH STRUCTURES HAD TO BE HANDED OVER TO THE PORT TRUST ON EXPIRY OF THE PERIOD OF AGREEMENT. IN THE CASE AT HAND IT IS CLEAR THAT THE ASSETS OF THE CFS ARE NOT TO BE HANDED OVER TO THE PORT TRUST AT ANY POINT OF TIME AS IT IS NOT BUILT O N BOT & BOLT SCHEME. THE CFS IS ALSO NOT LOCATED AT THE PORT. AS AGAINST THE AFORESAID, THE LD. STANDING COUNSEL HAS SUBMITTED THAT CLARIFICATIONS ISSUED BY OTHER AUTHORITIES INCLUDING CENTRAL BOARD OF EXCISE AND CUSTOMS UNDER THE RELEVANT ACTS DO NOT LAY GUIDELINES UNDER THE INCOME TAX ACT AND THAT THE MATTER HAS TO BE DECIDED UNDER THE INCOME - TAX ACT INDEPENDENTLY. FOR DOING SO, INITIALLY A STRICT INTERPRETATION HAS TO BE PLACED ON THE WORDS 'INLAND PORT' TO EXAMINE THAT THE ASSESSEE IS ENTITLED TO THE DE DUCTION. CBDT HAS FURNISHED OPINION THAT ICDS AND CFSS ARE NOT ENTITLED TO SUCH DEDUCTION AS THEY DO NOT CONSTITUTE INLAND PORTS. OTHER ACTS AS WELL AS STUDY REPORT LEAD TO THE CONCLUSION THAT A PORT CAN BE SAID TO BE AN INLAND PORT ONLY IF IT HAS AN ACCES S TO THE SEA VIA A WATERWAY. 66. WE FIND THAT THE SOLITARY DECISION IN THIS CASE BY ANY HIGH COURT IS IN THE CASE OF CONTAINER CORPN. OF INDIA LTD. ( SUPRA ). IN THIS CASE IT HAS BEEN HELD THAT AN ICD IS NOT A PORT BUT IT IS AN INLAND PORT. THE CASE OF CFS IS SIMILAR SITUATED IN THE SENSE THAT BOTH CARRY OUT SIMILAR FUNCTIONS, I.E., WARE HOUSING, CUSTOMS CLEARANCE, AND TRANSPORT OF GOODS FROM ITS LOCATION TO THE SEAPORTS AND VICE - VERSA BY RAILWAY OR BY TRUCKS IN CONTAINERS. THUS, THE ISSUE IS NO LONGER RES - I NTEGRA . RESPECTFULLY FOLLOWING THIS DECISION, IT IS HELD THAT A CFS IS AN INLAND PORT WHOSE INCOME IS ENTITLED TO DEDUCTION U/S 80 - IA(4). QUESTION NO. 2 IS ANSWERED ACCORDINGLY. 11. SINCE, THE ASSESSEE WAS ENTITLED TO THE DEDUCTION CLAIMED U/S 80 - IA(4) O F THE ACT AS PER THE DECISION OF THE SPECIAL BENCH DISCUSSED ABOVE, THE AO HAS 9 ITA NO. 3221/MUM/2016 ASSESSMENT YEAR: 2011 - 12 RIGHTLY ALLOWED THE DEDUCTION IN QUESTION CLAIMED BY THE ASSESSEE . THE ASSESSMENT ORDER IS, THEREFORE, NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE . THE CASE S RELIED UPON BY THE LD. PR. COMMISSIONER ARE DISTINGUISHABLE ON FACTS. HENCE , IN OUR CONSIDERED OPINION THE ACTION OF LD. PR. COMMISSIONER IS BEYOND JURISDICTION AND LIABLE TO BE QUASHED. WE, THEREFORE, QUASH THE ORDER PASSED BY THE LD. PR. COMMISSIONER A ND ALLOW THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2011 - 2012 IS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JULY , 2017 . SD/ - SD/ - ( B.R. BASKARAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 07/ 0 7 / 2017 ALINDRA PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI