The ACIT, Visakhapatnam V. M/s. Gateway East India Pvt.Ltd., Visakhapatnam

ITA 342/VIZ/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6612 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 09-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R GOVINDHA RAJAN
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 342 / VIZ /201 7 (ASST. YEAR : 20 13 - 14 ) ACIT, CIRCLE - 3(1), VISAKHAPATNAM. V S . M/S. GATEWAY EAST INDIA PVT. LTD., CONTAINER FREIGHT STATION, VPT EXIM PAR K , OPP. GAIL, NEAR AYYAPPA SWAMI TEMPLE, SHEELA NAGAR, VISAKHAPATNAM. PAN NO. AABCV 1938 N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MADHUR AGRAWAL ADV. DEPARTMENT BY : SHRI R. GOVINDHA RAJAN CIT DR DATE OF HEARING : 06 / 0 9 /201 7 . DATE OF PRONOUNCEMENT : 11 / 1 0 /201 7 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , VISAKHAPATNAM , DATED 06 /0 3 /201 7 FOR THE ASSESSMENT YEAR 20 13 - 14 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE - COMPANY IS ENGAGED IN THE BUSINESS OF OPERATION OF CONTAINER FREIGHT STATION (CFS) , FILED ITS RETURN OF INCOME BY DECLARING TOTAL INCOME OF 29,23,530/ - AFTER CLAIMING DEDUCTION UNDER SECTION 80IA(4) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT') . THE ASSESSING OFFICER HAS 2 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) CALLED THE ASSESSEE TO JUSTIFY ITS CLAIM UNDER SECTION 80IA(4) OF THE ACT. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE PROVISIONS OF SECTION 80IA(4) HAS AMENDED BY FINANCE ACT 2000 AND AS PER CBDT CIRCULAR NO. 793 , DATED 23/06/2000 , THE PORT COULD VERIFY STRUCTURES NEAR THE PORT FOR BENEFIT UNDER SECTION 10(23G) & 80IA OF THE ACT. THE ASSESSEE HAD OBTAINED SUCH CERTIFICATE FROM VISAKHAPATNAM PORT TRUS T. IT WAS ALSO SUBMITTED THAT THE ASSESSEE GOT APPROVAL FROM THE MINISTRY OF COMMERCE & INDUSTRY AND THAT THE ASSESSEE HAS CLASSIFIED AS CONTAINER FREIGHT STATION BY THE COMMISSIONER OF CUSTOMS . IT WAS FURTHER SUBMITTED THAT IN VIEW OF THE AMEND ED PROVIS ION FROM A SSESSMENT Y EAR 200 0 - 01 , INLAND PORT FALLS WITHIN THE DEFINITION OF INFRASTRUCTURE FACILITY UNDER SECTION 80IA(4) AND THAT THE MINISTRY OF SHIPPING VIDE LETTER DATED 16/09/2008 HA S CLASSIFIED CFS AS AN INLAND PORT. WITH REFERENCE TO THESE CIRCULARS, THE ASSESSEE HAS CONTENDED TH A T IT FALLS WITHIN THE PURVIEW OF INLAND PORT AND THEREFORE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4). HOWEVER, ASSESSING OFFICER DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE . FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE ASSESSMENT ORDER IS EXTRACTED AS UNDER: - THE EXPLANATION OFFERED VIDE THE ABOVE REFERRED LETTER HAS BEEN CAREFULLY PERUSED IN THE LIGHT OF THE NOTIFICATIONS AND CIRCULARS ISSUED BY THE BOARD. THE REVISIONS OF SECTION 80IA (4) OF THE ACT HAVE BEEN SUBJECTED TO AMENDMENTS FROM TIME TO TIME. VIDE FINANCE ACT, 2007 WITH EFFECT FROM 01.04.2008, THE DEFINITION FOR INLAND PORT HAVE UNDERGONE CHANGES BY AMENDMENTS AND CLARIFICATION ISSUED FROM TIME TO TIME BY THE BOARD CIRCULAR NO.793, DATED 23.06.2000 IS REPRODUCED AS UNDER: 'THE BOARD HAS RECEIVED VARIOUS REPRESENTATIONS SEEKING CLARIFICATION WHETHER STRUCTURES AT PORTS FOR STORAGE, LOADING AND UNLOADING ETC., WILL FALL UNDER THE DEFINITION OF 'PORT' FOR THE PURPOSES OF SECTION 10(23G ) AND 80IA OF THE INCOME - TAX ACT, 1961. 3 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) THE BOARD HAS CONSIDERED THE MATTER AND IT HAS BEEN DECIDED THAT SUCH STRUCTURES WILL BE INCLUDED IN THE DEFINITION OF 'PORT' FOR THE PURPOSE OF SECTION 10(23G) AND 80IA OF THE INCOME - TAX ACT, 1961, IF THE FOLLOWING CONDITIONS ARE FULFILLED: (A) THE CONCERNED PORT AUTHORITY HAS ISSUED A CERTIFICATE THAT THE SAID STRUCTURES FORM PART OF THE PORT, AND (B) SUCH STRUCTURES HAVE BEEN BUILT UNDER BOT AND BOLT SCHEMES AND THERE IS AN AGREEMENT THAT THE SAME WOULD BE TRANSFER RED TO THE SAID AUTHORITY ON THE EXPIRY' OF THE TIME STIPULATED IN THE AGREEMENT. THE ABOVE CIRCULAR WAS SUPERSEDED BY CIRCULAR NO. 10/2005 DATED 16.12.2005 WHICH IS REPRODUCED AS UNDER: 'REFERENCE IS INVITED TO BOARD CIRCULAR NO.793 DATED 23,06,2000 AND AM ENDMENT IN SECTION 80 - IA BY THE FINANCE ACT, 2001. 2. PORT, FOR THE PURPOSE OF SECTION 10(23G) AND 80IA OF THE INCOME - TAX ACT, 1961, INCLUDES STRUCTURES AT THE PORTS FOR STORAGE, LOADING AND UNLOADING ETC., IF THE FOLLOWING CONDITIONS ARE FULFILLED. (A) TH E CONCERNED PORT AUTHORITY HAS ISSUED A CERTIFICATE THAT THE SAID STRUCTURES FORM PART OF THE PORT, AND (B) SUCH STRUCTURES HAVE - BEEN BUILT UNDER BOT AND BOLT SCHEMES AND THERE IS AN AGREEMENT THAT THE SAME WOULD BE TRANSFERRED TO THE SAID AUTHORITY ON THE EXPIRY OF THE TIME STIPULATED IN THE AGREEMENT. THIS DEFINITION IS APPLICABLE TO ASSESSMENT YEAR 2Q01 - 02 AND ANY EARLIER ASSESSMENT YEAR. 3. HOWEVER, FOR AND FROM ASSESSMENT YEAR 2002 - 03 ONWARDS, STRUCTURES AT THE PORTS FOR STORAGE, LOADING AND UNLOADI NG ETC., WILL BE INCLUDED IN THE DEFINITION OF PORT FOR THE PURPOSE OF SECTION 10(23G) AND 80 - IA OF THE INCOME - TAX ACT, 1961, IF THE FOLLOWING CONDITION IS FULFILLED: 'THE CONCERNED PORT AUTHORITY HAS ISSUED A CERTIFICATE THAT THE SAID ST RUCTURES FORM PART OF THE PORT. A PERUSAL OF THE CERTIFICATE ISSUED BY THE VISAKHAPATNAM PORT TRUST INDICATE THAT T HE STRUCTURE ON WHICH THE ASSESSEE HAS CLAIMED DEDUCTION U/S.80IA (4) OF THE INCOME - TAX ACT, 1961 DOES NOT FULFIL THE CONDITIONS ENUMERATED IN CIRCULAR NO,793 , DTD.23.06.2000 SUCH AS THE CONTAINER FREIGHT STATION HAS NOT BEEN BUILT UNDER BOT AND BOLT SCHEME AND THERE IS NO AGREEMENT THAT THE SAME WOULD BE TRANSFERRED TO VPT ON EXPIRY OF TIME STIPULATED IN THE AGREEMENT AS MENTIONED IN CIRCULAR NO.793, D A T E D 23. 06.2000 OR CIRCULAR NO. 10/2005, DTD,16.12.2005. IT CAN BE SEEN FROM THE ABOVE THAT THE CONDITIONS ENUMERATED VIDE CIRCULAR NO.793, DTD.23.06.2000 FOR SUCH STRUCTURES TO BE INCLUDED IN THE DEFINITION OF PORT IS NOT FULFILLED BY THE ASSESSEE - COMPANY. COMING TO CIRCULAR NO. 10/2005, THE CONDITIONS LAID DOWN FOR SUCH STRUCTURE TO BE ELIGIBLE FOR DEDUCTION IS THAT THE CONCERNED PORT AUTHORITY HAS ISSUED A CERTIFICATE, THAT THE SAID STRUCTURES FORM PART OF THE PORT. IN SUPPORT OF THE ABOVE, THE ASSESSEE SUBMITTE D A CERTIFICATE FROM THE VISAKHAPATNAM PORT TRUST WHICH MENTIONS THAT THE CONTAINER FREIGHT STATION M/S. GATEWAY EAST INDIA PVT . LTD MAY BE CONSIDERED AS EXTENDED ARM OF THE PORT IN ACCORDANCE WITH CBDT CIRCULAR NO.793, DTD.23.06.2000 R.W. CLARIFICATION DT D.24.04.2007 ISSUED BY THE CENTRAL BOARD OF CUSTOMS AND EXCISE, NEW DELHI. 4 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) ON PERUSAL OF THE SAID CERTIFICATE ISSUED BY THE VISAKHAPATNAM PORT TRUST, IT CAN BE SEEN THAT THE STRUCTURE DOES NOT FORM PART OF THE PORT IN AS MUCH AS IT IS NOT LOCATED IN THE PO RT. THERE IS NO AMBIGUITY IN CIRCULAR NO. 10/2005 WHEREIN IT IS CLARIFIED THAT THE STRUCTURE MUST BE A PART OF THE PORT. THE LITERAL MEANING OF PART OF THE PORT IS THAT IT IS WITHIN THE PRECINCTS OR PREMISES OF THE PORT .... IT IS IMPORTANT TO TAKE A LOOK AT THE CERTIFICATE ISSUED BY THE VISAKHAPATNAM PORT TRUST STATING THAT THE STRUCTURE IS AN 'EXTENDED ARM OF THE PORT'. THIS DEFINITION CLEARLY REVEALS THE FACT THAT THE INFRASTRUCTURE FACILITY OF THE ASSESSEE IS NOT LOCATED IN THE PORT BUT AN EXTENDED ARM OF THE PORT I.E., IN A PREMISES AWAY FROM THE PORT. SINCE IT IS AN EXTENDED ARM WHICH MEANS AWAY FROM THE PORT IT IS DEAR THAT IT IS NOT A PART OF THE PORT AS ENJOI N ED IN THE CIRCULAR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LEARNED COUNSELS APPEARI NG ON BEHALF OF THE ASSESSEE - COMPANY RELIED UPON THE DECISION OF THE HONOURABLE ITAT SPECIAL BENCH, MUMBAI AND THE SAID CASE LAW HAS BEEN CAREFULLY PERUSED* THE DECISION OF HONOURABLE ITAT, SPECIAL BENCH, MUMBAI IN THE CASE OF M/S, ALL CARGO GLOBAL LOGISTI CS LTD. VS. DCIT FOR THE ASSESSMENT YEARS 2004 - 05 TO 2009 - 10 INVOLVED GROUNDS REGARDING INTERPRETATION OF SECTION 153A AND DEDUCTION U/S.8QIA(4) OF THE INCOME - TAX ACT, 1961 AND ARE THEREFORE DISTINGUISHABLE ON SALIENT FEATURES AND FACTS OF THE CASE. THE D EPARTMENT HAS NOT ACCEPTED THE DECISION OF THE HONOURABLE ITAT SPECIAL BENCH, MUMBAI ON THE ABOVE ISSUE AND HAS PREFERRED APPEALS BEFORE THE HONOURABLE HIGH COURT, MUMBAI. AFTER HAVING CAREFULLY CONSIDERED THE VARIOUS ISSUES EMERGING FROM THE ABOVE CITED C IRCULARS OF THE BOARD AND THE DECISION OF THE HONOURABLE SPECIAL BENCH, MUMBAI, IT IS IMPORTANT TO REPRODUCE A CLARIFICATION ISSUED BY THE CBDT REGARDING INFRASTRUCTURE ACTIVITIES U/S.80IA(4)(I) OF THE ACT WITH RESPECT TO CFS AND ICDS VIDE LETTE R ADDRESSED TO ALL THE CHIE F COMMISSIONER OF INCOME - TAX IN F.NO.178/42/2010 - ITA - I, DT.06.01.2011. 'UNDER SECTION 80IA (4)(I) OF INCOME - TAX ACT, A DEDUCTION IS GIVEN TO THE INCOME OF AN UNDERTAKING ENGAGED IN SETTING UP OF AN INFRASTRUCTURE FACILITY. THE TERM 'INFRASTRUCTURE FACILITY' HAS BEEN DEFINED IN SECTION 80IA(4), INTER ALIA, AS UNDER: 'A PORT, AIRPORT, INLAND WATERWAY, INLAND PORT OR NAVIGATIONAL CHANNEL IN THE SEA.' IN ORDER TO CLARIFY THE TERM PORT, AND WHETHER THE FACILITIES OF LOADING AND UNLOADING CONSTITUTE A PART OF A PORT, THE BOARD ISSUED TWO CIRCULARS I.E., CIRCULAR N.793 DATED 23.06.2000 AND CIRCULAR NO.10 DATED 16,12.2005. IN THE FIRST CIRCULAR, IT WAS CLARIFIED THAT STRUCTURES AT PORTS FOR STORAGE, LOADING AND UNLOADING WILL BE COVERED BY T HE DEFINITION OF PORT FOR THE PURPOSE OF SECTION 10(23G) AND SECTION 80IA SUBJECT TO THE CONDITION, THAT THE CONCERNED PORT AUTHORITIES HAS ISSUED A CERTIFICATE THAT SUCH STRUCTURES FORM A PART OF THE PORT AND THE SAME HAVE BEEN CONSTRUCTED UNDER THE BOLT SCHEME. THIS WAS AGAIN REITERATED IN THE CIRCULAR DTD.16.12,2005 WHEREIN IT WAS STATED THAT FOR THE ASSESSMENT YEAR 2002 - 03 ONWARDS, STRUCTURES AT PORTS FOR STORAGE, LOADING AND UNLOADING WILL BE INCLUDED IN THE DEFINITION OF PORT. REFERENCES HAVE BEEN REC EIVED IN THE BOARD SEEKING CLARIFICATION WHETHER THE CONTAINER FREIGHT STATIONS (CFSS) AND INLAND CONTAINER DEPOTS (ICDS) ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA (4)(I) AND WHETHER THEY ARE TO BE CONSIDERED AS INFRASTRUCTURE FACILITY FOR THE PURPOSE OF THE SAID SUB - SECTION, ESPECIALLY IN VIEW OF THE AFORESAID CIRCULAR NO.10/2005, WHICH STATES THAT STRUCTURES FOR LOADING AND UNLOADING AT THE PORT AREA ARE A PART OF THE PORT. THE BOARD HAS CONSIDERED THE ABOVE ISSUE AND IT IS CLARIFIED 5 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) THAT THE AFORESA ID CIRCULAR IS APPLICABLE TO THE STRUCTURE FOR LOADING, UNLOADING AND STORAGE AT THE PORT. AN ICD OR A CFSS IS USUALLY NOT LOCATED AT THE PORT AND THEREFORE IT IS NOT A PART OF THE PORT FOR THE PURPOSE OF SECTION 80IA(4)(I) AND NOT COVERED BY THE CIRCULAR NO.10/2005 DATED 16.12.2005 AND CIRCULAR NO.793 DATED 23.06.2000 ON THE SUBJECT. IN THIS REGARD, IT IS FURTHER ADDED THAT IF SUCH A FACILITY IS LOCATED AT THE PORT THEN, IT CAN BE CONSIDERED TO BE AN INFRASTRUCTURE FACILITY BEING A PART OF THE PORT. 2. REF ERENCES HAVE ALSO BEEN RECEIVED AS TO WHETHER INLAND CONTAINER DEPOTS (ICDS) AND CONTAINER FREIGHT STATION (CFS) CAN BE TERMED AS INLAND PORTS AND THEREBY CLASSIFIED AS INFRASTRUCTURE FACILITY UNDER SECTION 8 0IA(4)(I) OF THE INCOME - TAX ACT, 1961. IN THIS C ONTEXT, I AM FURTHER DIRECTED TO CONVEY THAT THE BOARD HAS CONSIDERED THE ISSUE AND IT HAS BEEN DECIDED THAT AS ICDS AND CFSS ARE NOT PORTS L OCATED ON ANY INLAND WATERWAY, RIVER OR CANAL, AND THEREFORE THEY CANNOT BE CLASSIFIED AS INLAND PORTS FOR THE PURP OSE OF SECTION 8QIA(4) OF THE INCOME - TAX ACT.' T HE SOLE CONTROVERSY IN THE INSTANT CASE IS WHETHER CONTAINER FREIGHT STATIONS (CFS) OPERATED BY THE ASSESSEE FOR SHIPPING COMPANIES DURING THE SUBJECT YEAR IS 'INFRASTRUCTURE FACILITY' AND THE INCOME DERIVED FROM CFS IS ELIGIBLE FOR DEDUCTION U/S.80IA(4)(I). UNDER SEC, 80IA(4)(I) OF THE I.T. ACT, A DED UCTION IS ADMISSIBLE IN RESPECT OF THE INCOME OF AH UNDERTAKING ENGAGED IN SETTING UP AN INFRASTRUCTURE FACILITY. THE EXPRESSION 'INFRASTRUCTURE FACILITY' HAS BEEN DEFINED IN SEC.80IA(4), WHICH INCLUDES 'A PORT, AIRPORT, INLAND WATER WAY, INLAND PORT OR NAVIGATIONAL CHANNEL IN THE SEA'. ON THIS SUBJECT, CBDT ISSUED A CIRCULAR DATED 06.01.2011, IN WHICH EARLIER CIRCULARS DATED 16.12,2005 AND 23.6.2000 WERE CONSI DERED. THE CLARIFICATION PROVIDED IN BOARD'S CIRCULAR IS USEFUL AID FOR AN INTERPRETATION OF THE PROVISIONS OF SECTION 80IA(4)(I) AND TO DECIDE WHETHER CFS IS AN 'INFRASTRUCTURE FACILITY' WITHIN THE MEANING OF SEC.80LA(4). IT HAS BEEN - CLARIFIED IN THE SAI D CIRCULAR DATED 06.01.2011 THAT AN ICD OR A CFS IS USUALLY NOT LOCATED AT THE PORT AND THEREFORE IS NOT A PART OF THE 'PORT' FOR THE PURPOSE - OF SEC.80IA(4). IT HAS BEEN FURTHER CLARIFIED THAT AS ICDS AND CSS ARE NOT PORTS LOCATED ON ANY INLAND WATER WAY, RIVER OR CANAL THEY CANNOT BE CLASSIFIED AS 5|BNLAND PORTS' FOR THE PURPOSE OF SECTION 80(IA)(4). I N THE CASE OF THE PRESENT A SSESSEE, CFS IS LOCATED AWAY FROM THE PORT PREMISES AND THEREFORE AS PER THE CLARI FICATION ISSUED BY THE BOARD, IT DOES NOT FORM P ART OF THE 'PORT' OR 'INLAND PORT AS CONTEMPLATED IN SEC.80IA(4). IN THE AUTHORITIES REFERRED BY THE ITAT WHILE GRANTING RELIEF SOUGHT FOR BY THE ASSESSEE, THE CLARIFICATION ISSUED BY THE CBDT WAS NOT CONSIDERED IN PROPER PERSPECTIVE AND THE DECISION WAS RENDERED BY SIMPLY RELYING ON THE DEFINITION OF ICD AND CFS EXPLAINED IN CIRCULARS ISSUED UNDER OTHER ENACTMENTS. THE DECISION OF THE TTAT CANNOT BE ACCEPTED WHEN THE BOARD HAS CLARIFIED THE MATTER IN NO UNCERTAIN TERMS AS TO THE MEANING OF 'PORT' AND 'INL AND PORT' FOR THE PURPOSE OF DEDUCTION U/S.80IA(4)(I). FURTHER, WHILE ALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.8QIA(4), ITAT RELIED ON CIRCULAR NO, 18/2009 DATED 8,6,2009 ISSUED BY CENTRAL BOARD OF EXCISE AND CUSTOMS WHEREIN THE DISTINCTION BET WEEN INLAND CONTAINER DEPOTS (ICDS) AND CONTAINER FREIGHT STATIONS (CFS) WAS STATED TO HAVE BEEN SPELT OUT, HOWEVER, IT IS TO BE MENTIONED THAT THE DESCRIPTION OF ACTIVITY OF THE ASSESSEE UNDER CENTRAL EXCISE ACT OR SALES TAX ACT OR ANY OTHER ENACTMENT BY ITSELF CANNOT BE TAKEN AS CONCLUSIVE OF WHAT THE EXPRESSION 'INFRASTRUCTURE FACILITY' DENOTES UNDER THE IT ACT. IN THIS REGARD, REFERENCE CAN BE MADE TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VENKATESHWARA HATCHERIES LTD., (237 I TR 174) WHEREIN THE A PEX COURT FURTHER HELD AS UNDER: - '16. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON SEVERAL DECISIONS UNDER THE SALES TAX ACTS, CENTRAL EXCISE ACT AND THE PROVISIONS OF OTHER 6 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) STATUTES FOR THE CONTENTION THAT 'ARTICLE' INCLUDES GOODS AND GOODS COULD BE ANIMATE OBJECTS AND, VIEWED ILL THIS LIGHT, THE HATCHING OF EGGS WOULD COME WITHIN THE MEANING OF THE WORD 'PRODUCE' WHICH IS OF WIDER IMPORT THAN THE WORD 'MANUFACTURE'. NO DOUBT, SEVERAL SALES TAX ACTS HAVE INCLUDED ANIMATE THING S FOR THE PURPOSE OF LEVYING TAX ON SALES. BUT THE MEANING ASSIGNED TO A PARTICULAR WORD IN A PARTICULAR STATUTE CANNOT BE IMPORTED TO A WORD USED IN A DIFFERENT STATUTE/' (PARA 16) IN VIEW OF THE ABOVE DECISION OF THE HON'BLE SUPREME COURT, THE DESCRIPTIO N OF THE ACTIVITY OF THE ASSESSEE AND DEFINITION OF ICD AND CFS UNDER OTHER ENACTMENTS CANNOT BE ACCEPTED AS CONCLUSIVE AS REGARDS THE CONNOTATION OF THE WORD 'INFRASTRUCTURE FACILITY' OR 'PORT' OR 'INLAND PORT' USED IN SE C. 80IA(4)(I) OF THE INCOME TAX ACT, 1961 BECAUSE DIFFERENT ENACTMENTS / STATUTES MAKE DIFFERENT CLASSIFICATION / CATEGORIZATION OF GOODS AND SERVICES FOR CERTAIN SPECIFIC PURPOSES AND REQUIREMENTS. THUS, MEANING OF THE SAME WORD MAY VARY FROM ONE STATUTE TO ANOTHER AND IT IS NOT CORRECT TO GO EXCLUSIVELY BY THE MEANING GIVEN TO A WORD IN OTHER ENACTMENTS, MORE SO WHEN THE CBDT HAS ISSUED CLARIFICATION UNDER SEC.80IA(4)(I) WITH RESPECT TO CFS AND ICD AND WHETHER THEY FORM PART OF PORT OR INLAND PORT. FROM THE ABOVE DISCUSSION, THE FOLLOWI NG FACTS EMERGE THAT MAKE THE ASSESSEE COMPANY M/S. GATEWAY EAST INDIA PVT . LTD INELIGIBLE FROM CLAIMING DEDUCTION U/S,80IA(4) OF THE INCOME - TAX ACT, 1961: AS STATED IN PARA 9 OF THIS ORDER ON DEFINITION OF BEING PART OF THE PORT, THE ICD OF THE ASSESSEE I S NOT LOCATED IN THE PORT, IT IS LOCATED ON A PREMISES SITUATED AWAY FROM THE PORT TAKEN ON LONG LEASE OF 30 YEARS BY THE VISAKHAPATNAM PORT TRUST, THE LAND DOES NOT BELONG TO THE VISAKHAPATNAM PORT TRUST AND IT IS NOT LOCATED IN THE PORT. SINCE IT IS NOT LOCATED IN THE PORT THE ASSESSEE DOES NOT FULFIL THE CONDITIONS AS PER THE CIRCULAR FOR CLAIMING DEDUCTION. IMPORTANTLY BOTH ICD & CFS ARE NOT INFRASTRUCTURE FACILITIES AS CLARIFIED BY THE CLARIFICATION CITED ABOVE AND HENCE ARE NOT ELIGIBLE FOR DEDUCTION U/S.80IA(4). THE CASE OF THE ASSESSED SQUARELY FALLS UNDER THIS CLARIFICATION. AN IMPORTANT CRITERIA FOR THE CLAIM U/S.80IA (4) OF THE INCOME - TAX ACT, 1961 IS 'THE INDIAN COMPANY SHOULD ENTER INTO AN AGREEMENT WITH CENTRAL OR STATE GOVERNMENT OR A GOVERNM ENT UNDERTAKING ETC. FOR OPERATING THE SAID FACILITY SUBJECT TO THE CONDITION THAT SUCH FACILITY SHOULD BE TRANSFERRED TO THE SAID GOVERNMENT UNDERTAKING WITHIN THE PERIOD STIPULATED IN THE AGREEMENT.'' THERE IS NO AGREEMENT BETWEEN THE ASSESSEE COMPANY AN D THE GOVERNMENT OR BODY, ETC AS ENJOINED IN SECTION 80IA OF THE ACT FOR DEVELOPMENT OF THE SAID STRUCTURE. THIS IS A MAJOR CRITERIA GOVERNING THE ELIGIB ILITY FOR CLAIMING DEDUCTION/S.80 IA WHICH THE ASSESSEE ALSO DOES NOT FULFIL. ACCORDINGLY , THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF DEDUCTION CLAIMED UNDER SECTION 80IA(4) AND MADE IMPUGNED ADDITION OF 16,37,21,837/ - . 3 . ON BEING AGGRIEVED , ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) BY FOLLOWING THE DECISIO N IN THE CASE OF 7 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) ASSESSEE ITSELF DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80IA(4) O F THE ACT. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER: - 5.3 I HAVE CAREFULLY CONSIDERED THE ABOVE SUBMISSIONS. I HAVE ALSO PERUSED THE ORDER OF THE HON'BLE TRIBUNAL, VISAKHAPATNAM BENCH IN THE ASSESSEE'S OWN CASE FOR THE ASST. YR. 2011 - 12 IN ITA NO.15/VIZAG/2015, DATED 29.4.2015. THE RELEVANT PORTION OF THE DEC ISION OF THE HON'BLE TRIBUNAL IS EXTRACTED BELOW : ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO ON RURAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAW ' I D, WE HOLD AS FOLLOWS: IN CIRCULAR NO. 1 8/2009 DATED 8/6/2009 ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS IN F.NO.434117/2009 - CUS.IV THE DIFFERENCE BETWEEN INLAND CONTAINER DEPOTS (ICD) AND CONTAINER FREIGHT STATIONS. (CFS) HAS BEEN SPELT OUT IN THE FOLLOWING MANNER : DEFINITION OF ICD : AN INLAND CONTAINER DEPOT MAY BE DEFINED AS : A COMMON USER FACILITY WITH PUBLIC AUTHORITY STATUS (EMPHASIS SUPPLIED) EQUIPPED WITH FIXED INSTALLATIONS AND OFFERING SERVICES FOR HANDLING AND TEMPORARY STORAGE OF IMPORT / EXPORT LADEN AND EMPTY CONTAINERS C ARRIED UNDER CUSTOMS CONTROL AND WITH CUSTOMS AND OTHER AGENCIES COMPETENT TO CLEAR GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE - EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT. TRANSSHIPMENT OF CARGO CAN ALSO TAKE PLACE FROM SUCH STATIONS. DEFINITION OF CFS : A CONTAINER FREIGHT STATION MAY BE DEFINED AS : CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS. FIRSTLY, CFS DO NOT HAVE 'PUBLIC AUTHORITY STATUS' WHEREAS ICD IS A PLACE THAT ACTS AS A 'SELF CONTAINED CUSTOMS STATION' AS CATEGORICALLY SPELT IN CIRCULAR OF CBEC DT.8.6.2009. FURTHER THE SAID CIRCULAR CLEARLY DISTINGUISHES ICD AND CFS AN D MAKES IT VERY OBVIOUS THAT CFS IS NOTHING BUT A WAREHOUSE. DISTINCTION BETWEEN ICT & CFS : INLAND CONTAINER DEPOT IS A PLACE THAT ACTS AS A SELF CONTAINED CUSTOMS STATIONS LIKE A PORT OR AIR CARGO UNIT WHERE FILLING OF CUSTOMS MANIFESTS. BILLS OF EN TRY SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE. WAREHOUSING TEMPORARY ADMISSIONS RE - EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT. TRANSSHIPMENT ETC., TAKES PLACE' 8 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS AN ICD IS A SELF CONTAINED CUSTOMS STATION LIKE A PORT OR AIR CARGO U NIT WHERE FILING OF CUSTOMS MANIFESTS, BILLS OF ENTRYS, SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE - EXPORT TEMPORARY STORAGE FOR ONWARD TRANSIT A ND OUTRIGHT EXPORT, TRANSSHIPMENT, ETC., TAKE PLACE. AN ICD WOULD HAVE ITS OWN AUTOMATED SYSTEM WITH A SEPARATE STATION CODE (SUCH AS INTO 6, INSNJF6 ETC.) BEING ALLOTTED BY DIRECTORATE GENERAL OF SYSTEMS AND WITHIN - BUILT CAPACITY TO ENTER EXAMINATION REPO RTS AND ENABLE ASSESSMENT OF DOCUMENTS, PROCESSING OF MANIFEST, AMENDMENTS, ETC. CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS. A CFS IS ONLY A CUSTOMS AREA LOCATED IN THE JURISDICTION OF A COMMISSIONER OF CUSTOMS EXERCISING CONTROL OVER A SPECIFIED CUSTOMS PORT, COMMISSIONER OF CUSTOMS EXERCISING CONTROL OVER A SPECIFIED CUSTOMS PORT, AIRPORT, LCS/ICD. A CFS CANNOT H AVE AN INDEPENDENT EXISTENCE AND HAS TO BE LINKED TO A CUSTOMS STATION SET UP WITH THE MAIN OBJECTIVE OF DECONGESTING THE PORTS. IN A CFS ONLY A PART OF THE CUSTOMS PROCESSES MAINLY THE EXAMILNATION OF GOODS IS NORMALLY CARRIED OUT BY CUSTOMS BESIDES STUF FING / DESTUFFING OF CONTAINERS AND AGGREGATION/SEGREGATION OF CARGO. THUS, CUSTOMS FUNCTIONS RELATING TO PROCESSING OF MANIFEST, IMPORT / EXPORT DECLARATIONS AND ASSESSMENT OF BILL OF ENTRY / SHIPPING BILL ARE PERFORMED IN THE CUSTOM HOUSE / CUSTOMS FUNC TIONS RELATING TO PROCESSING OF MANIFEST, IMPORT / EXPORT DECLARATIONS AND ASSESSMENT OF BILL OF ENTRY / SHIPPING BILL ARE PERFORMED IN THE CUSTOM HOUSE / CUSTOMS FUNCTIONS / CUSTOM OFFICER THAT EXERCISES JURISDICTION OVER THE PARENT PORT / AIRPORT / ICD / LCS TO WHICH THE SAID CFS IS ATTACHED. IN THE CASE OF CUSTOMS STATIONS HAVING FACILITY OF AUTOMATED PROCESSING OF DOCUMENTS, TERMINALS ARE PROVIDED AT SUCH CFSS FOR RECORDING THE RESULT OF EXAMINATION, ETC. IN SOME CFSS, EXTENSION SERVICE CENTERS ARE AVAI LABLE FOR FILING DOCUMENTS, AMENDMENTS ETC. HOWEVER, THE ASSESSMENT OF THE DOCUMENTS ETC IS CARRIED OUT CENTRALLY. AN ICD MAY ALSO HAVE A NUMBER OF CFSS ATTACHED TO IT WITHIN THE JURISDICTION OF THE COMMISSIONER OF CUSTOMS JUST AS IN THE CASE OF A PORT AN D ITS CFSS (AS ON DATE THERE ARE 28 CFSS LINKED TO CHENNAL PORT) (REFER CIRCULAR NO. 19/2009 - CUST., DATED 8 - 6 - 2009). A STANDALONE CUSTOMS CLEARANCE FACILITY IN AN INLAND COMMSSIONERATE CANNOT BE APPROVED BY THE COMMISSIONER AS A CFS, IF THERE IS NO ICD / PORT WITHIN ITS JURISDICTION TO WHICH THE SAID CFS CAN BE ATTACHED. SUCH A FACILITY CAN, HOWEVER, BE NOTIFIED AS AN ICD I.E., AS AN INDEPENDENT CUSTOMS STATION WITH PROVISION FOR FILING AND ASSESSMENT OF DOCUMENTS AND EXAMINATION OF GOODS. A CUSTOMS CLEARA NCE FACILITY COULD BE ESTABLISHED AS A CFS AT A PORT CITY FOR EXAMINATION OF IMPORTED / EXPORT GOODS, SINCE THE CFS WOULD FALL UNDER THE JURISDICTION OF COMMISSIONER OF CUSTOMS, HAVING JURISDICTION OVER THE CUSTOMS PORT WITH WHICH THE CFS WOULD BE ATTACHED . FURTHER, IN A PORT CITY SUCH AS CHENNAI OR MUMBAI, IT MAY BE POSSIBLE TO DEVELOP AN ICD WITHIN THE TERRITORIAL JURISDICTION OF THE CONCERNED CUSTOMS COMMISSONERATE IN ADDITION 9 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) TO EXISTING CFSS. SUCH AN ICD SHOULD BE CAPABLE OF PROVIDING FULL - FLEDGED CUST OMS SERVICES, INDEPENDENT EDT SYSTEM, AND ALL PROCEDURES MEANT FOR TRANSSHIPMENT OF CARGO HAVE TO BE FOLLOWED FOR MOVEMENT OF GOODS FROM THE PORT OF IMPORT TO THE ICD. FURTHER, SUCH AN ICD WOULD FUNCTION AS AN INDEPENDENT CUSTOMS STATION IN ALL RESPECTS A ND WOULD NOT BE ATTACHED TO ANY OTHER PORT OR AIRPORT. THUS, IN RESPECT OF PROPOSALS IT HAS TO BE EXAMINED WHE4THER THE PROPOSED FACILITY IS REQUIRED TO BE APPROVED AS AN ICD OR CFS. MOVEMENT OF GOODS FROM A PORT I AIRPORT / LCS TO AN ICD IS IN THE NATURE OF MOVEMENT FROM ONE CUSTOMS STATION TO ANOTHER, GOVERNED BY GOODS IMPORTED (CONDITION OF TRANSSHIPMENT) REGULATIONS, 1995, ON THE OTHER HAND, MOVEMENT OF GOODS FROM A PORT I AIRPORT /LCS OR AN ICD TO A CFS IS AKIN TO FOCAL MOVEMENT FROM A CUSTOMS AREA OF THE CUSTOMS STATION TO ANOTHER CUSTOMS AREA OF THE SAME STATION, COVERED BY LOCAL PROCEDURE EVOLVED BY THE COMMISSIONER OF CUSTOMS AND COVERED BY BONDS, BANK GUARANTEE, ETC. FURTHER, THE PERSON UNDERTAKING THE TRANSSHIPMENT WOULD BE REQUIRED TO FOLLOW THE PRESCRIBED PROCEDURE. AS RIGHTLY CONTENDED BY THE LEARNED AR OF THE APPELLANT, THE ABOVE CIRCULAR ANSWERS IN A VERY CLEAR AND CATEGORICAL MANNER THE OBJECTIONS RAISED BY THE ASSESSING OFFICER. AS FAR AS THE CONTENTION THAT THERE IS NO AGREEMENT WITH ANY G OVERNMENT OR STATUTORY AUTHORITY, WE FIND THAT THE ASSESSEE HAS PLACED ON RECORD LETTER OF INTENT. IN FACT THE MINISTRY OF COMMERCE AND INDUSTRY, VIDE LETTER DATED 10/2/2005, WRITTEN TO THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY REGARDING SETTING UP OF A CF$ AT VISAKHAPATNAM APROPOS THE ASSESSEE'S CASE. IN THE CASE OF A L LOGISTICS P. LTD. (SUPRA) THE CHENNAI BENCH OF THE TRIBUNAL AT PARA 7 HELD AS FOLLOWS : 7. NOW, WE PROCEED TO THE NEXT IS SUE, WHETHER I? THE ABSENCE OF SPECIFIC AGREEMENT WITH THE CENTR AL/STATE GOVERNNIENT LOCAL AUTHOR/TY OR STATUTORY BODY, THE ASSESSEE IS ENTITLED TO C/AFIN THE BENEFIT OF AFL/N80LA4I. THE ASSESSEE HAD MADE AN APPLICATION FOR SETTING UP OF CFS AT FR/AID/A. - IN RESPONSE TO THE APPLICATION OF THE ASSESSEE, THE DEPARTMENT OF COMMERCE, INFRASTRUCTURE DIVISION, MINISTRY OF COMMERCE AND INDUSTRY APPROVED THE PROPOSAL OF THE ASSESSEE FOR SETTING UP OF CFS AT I - /AID/A FOR HANDING IMPOIT/EXPORT OF CARGO SUBJECT TO EXECUTION OF CERTAIN DOCUMENTS AND COMPLIANCE OF OTHER TERMS AND C ONDITIONS AS STATED IN THE LETTER; THE ID. COUNSEL FOR THE ASSESSEE HAS P/ACED ON RECORD LETTER DT. 27 - 05 - 2003 FROM THE MINISTRY OF COMMERCE AND INDUSTRY PERMITTING THE ASSESSEE TO SET UP CFS AT FR/AID/A. THE CONTENTS OF THE LETTER ARE REPRODUCED HEREIN BE LOW: NOJ6/6/2003 - ZNFRA - Z GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPTT. OF COMMERCE INFRASTRUCTURE DIVISION ***** UDYOG BHAWAN, NEW DELHI DATED THE 27 TH MAY, 2003. TO THE DIRECTOR, M/S. AL LOGICSTICS PVT. LTD, CHENNI. 10 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) SUBJECT : SETTING UP OF AN CFS AT HALDIA SIR, I AM DIRECTED TO REFER TO YOUR APPLICATION DATED 8.22003 ON THE ABOVE SUBJECT ARID TO SAY MAT THE GOVERNMENT HAS APPROVED YOUR PROPOSAL FOR SETTING UP OF AN CONTAINER FREIGHT STATION AT HALDIA FOR HANDLING IMPORT AND EXPORT CARGO. TH E APPROVAL IS SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS: - A) THE LETTER OF INTENT HOLDER SHALL TAKE ADEQUATE STEPS TO CREATE PROPER /INFRASTRUCTURE KEEPING IN VIEW THE INDICATIVE NORMS - GIVEN IN PAIRS A & B OF THE GUIDELINES FOR SETTING UP INLAND CONTA INER DEPOTS/ CONTAINER FREIGHT STATIONS (ICDS/CF5) WITHIN A PERIOD OF ONE YEAR FROM THE DATE OF ISSUE OF THIS LETTER. B) NECESSARY BOND AND GUARANTEES, AS REQUIRED, WOULD BE EXECUTED WITH THE CONCERNED COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE. C) THE APP ROVAL WOULD BE SUBJECT TO CANCELLATION IN THE EVENT OF VIOLATION OF THE CUSTOMS AND OTHER LAWS OF THE LAND AND RULES. D) A QUARTERLY PROGRESS REPORT OF THE IMPLEMENTATION SHALL BE SENT TO THE MINISTRY OF COMMERCE. E) THE WORKING OF THE CFS WILL BE OPEN TO REVIEW BY THE INTER MINISTERIAL COMMITTEE. F) FORMALITIES IN RESPECT OF ACQUISITION / POSSESSION OF THE LAND SHALL BE COMPLETED WITHIN 60 DAYS AND INTIMATED TO THE M/O COMMERCE, FAILING WHICH THE APPROVAL GRANTED WOULD BE AUTOMATICALLY CANCELLED. 2. THE FA CILITY TO BE SET UP SHALL BE FULLY COMPUTERIZED, WITH EDI COMPATIBILITY AND A MINIMUM COMPLEMENT OF EQUIPMENT AND ACCESSORIES AS NECESSARY SHALL BE MADE AVAILABLE AT THE FACILITY. THE INDICATIVE LIST OF EQUIPMENT / ACCESSORIES CONSIDERED NECESSARY IS ANNE XED. THE STATUS REGARDING CONFIRMATION OF THE INSTALLATION / AVAILABILITY OF THE ITEMS SHALL BE FURNISHED TO THE APPROPRIATE AUTHORITIES TO FACILITATE ISSUE OF REQUISITE NOTIFICATION. 3. PLEASE ACKNOWLEDGE RECEIPT OF THIS LETTER. YOURS FAITHFULLY, SD/ - (N .G. BISWAS) DIRECTOR A PERUSAL OF CLAUSE 'B' OF THE ABOVE LETTER SHOWS THAT THE ASSESSEE WAS REQUIRED TO EXECUTE NECESSARY BOND AND GUARANTEES WITH THE CONCERNED COMMISSIONER OF CUSTOMS AN CENTRAL EXCISE. IT WAS ONLY ON THE COMPLIANCE OF ALL THE TERMS AND CONDITIONS MENTIONED IN THE AFORESAID LETTER THAT THE ASSESSEE WAS ALLOWED TO CARRY ON THE SERVICES OF CFS. THE ASSESSEE ON THE COMPLIANCE OF THE TERMS AND CONDITIONS AS MENTIONED IN THE LETTER, WAS NOTIFIED AS CFS COMPLEX FOR THE PURPOSE OF RECEIVING, ST ORING, IMPORT CONTAINERS, RECEIVING/CONSOLIDATING EXPORT CARGO ETC. VIDE PUBLIC NOTICE OUO - 1L - 2013. THE PUBLIC NOTICES WERE ISSUED BY THE OFFICE OF THE COMMISSIONER 11 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) OF CUSTOMS (PORT) KOLKATA. 8. THUS, IT IS EVIDENT THAT THE PROPOSAL OF THE ASSESSEE WAS AC CEPTED BY THE GOVERNMENT ON CERTAIN CONDITIONS WHICH WERE DULY COMPLIED WITH BY THE ASSESSEE. THERE MAY NOT BE ANY SPECIFIC AGREEMENT, BUT THE SEQUENCES OF EVENTS CLEARLY SHOW THAT THE ASSESSEE IS PROVIDING CFS FACILITY IN ACCORDANCE WITH THE CONDITIONS LA ID DOWN BY THE GOVERNMENT. IN SUCH CIRCUMSTANCES THERE IS NO NEED TO INSIST FOR THE SPECIFIC EXECUTION OF AGREEMENTS. THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF UNITED LINER AGENCIES OF INDIA (P.) LTD (SUPRA), HAS TAKEN A SIMILAR VIEW, WHERE NO S PECIFIC AGREEMENT WITH THE STATE GOVERNMENT WAS ENTERED INTO BUT FROM THE APPROVALS GRANTED TO THE ASSESSEE IT WAS INFERRED THAT ASSESSEE SHOULD BE DEEMED TO HAVE ENTERED INTO AN AGREEMENT WITH THE STATE GOVERNMENT. THUS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS COMPLIED WITH ALL THE PROVISIONS OF SECTION 80IA(4)(I) AND IS ELIGIBLE TO CLAIM DEDUCTION UNDER THE SAID SECTION. THE IMPUGNED ORDER IS SET ASIDE. THE APPEAL OF THE ASSESSEE IS ALLOWED. RESPECTFULLY FOLLOWING THE COORDINATE BENCH ORDER, WE HOLD THAT THE CONTENTION OF THE AO THAT THERE IS NO AGREEMENT AND HENCE THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION IS NOT THE CORRECT POSITION OF LAW. THE HONBLE DELHI HIGH COURT IN THE CASE OF CONTAI NER CORPORATION LTD. (SUPRA) HELD AS FOLLOWS: THE TERM INFRASTRUCTURE FACILITY WAS DEFINED IN SECTION 80 - IA(12)(CA) OF THE INCOME TAX ACT, 1961, TO MEAN A ROAD, HIGHWAY, BRIDGE, AIRPORT, PORT OR RAIL SYSTEM OR ANY OTHER PUBLIC FACILITY OF A SIMILAR NATURE AS MAY BE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES. THE FINANCE (NO. 2), 1998, INCLUDED THE WORDS INLAND WATER WAYS AND INLAND PORTS IN THE DEFINITION OF INFRASTRUCTURE FACILITY IN SUB - SECTION (12), CLAUSE (CA), WITH EFFECT FROM APRIL 1, 1999. WHEN THE ENTIRE SECTION WAS RECAST AND EVEN AF TER SEVERAL AMENDMENTS WERE THEREAFTER MADE TO THE SECTION, INLAND PORTS CONTINUED TO ENJOY THE DEDEDUCTION AS INFRASTRUCTURE FACILITY. THERE IS NO DEFINITION OF THE WORDS INLAND PORTS IN ANY OF THE DICTIONARIES. BUT THE WORDS INLAND CONTAINER DEPOT W ERE INTRODUCED IN SEC. 2(12) OF THE CUSTOMS ACT, 1962, WHICH DEFINES CUSTOMS PORT. THIS WAS BY WAY OF AN AMENDMENT MADE BY THE FINANCE ACT, 1983, WITH EFFECT FROM MAY 13, 1983. SIMULTANEOUSLY, CLAUSE (AA) WAS INSERTED IN SEC. 7(1) OF THE ACT UNDER WHICH THE CCHI ISSUE NOTIFICATION APPOINTING THE PLACES WHICH ALONE SHALL BE CONSIDERED AS INLAND CONTAINER DEPOTS FOR THE UNLOADING OF IMPORTED GOODS AND LOADING OF EXPORTED GOODS. THE CENTRAL BOARD OF EXCISE AND CUSTOMS ISSUED A CLARIFICATION THAT INLAND CONTA INER DEPOTS WERE INLAND PORTS. THE POWER TO NOTIFY INFRASTRUCTURE FACILITIES FOR THE PURPOSE OF THE SECTION WAS TAKEN AWAY FROM THE CENTRAL BOARD OF DIRECT TAXES W.E.F. APRIL 1,2002. HOWEVER, THERE WAS NO PROVISION MADE IN THE ACT SAYING THAT NOTIFICATIONS ISSUED EARLIER WOULD CEASE TO HAVE FROM APRIL 1, 2002.THE ASSESSEE, A PUBLIC SECTOR UNDERTAKING, WAS ENGAGED IN THE BUSINESS OF HANDLING AND 12 TRANSPORTATION OF CONTAINERISED CARGO. THE ACTIVITY OF THE ASSESSEE WAS CARRIED OUT MAINLY ON ITS INLAND CONTAI NER DEPORTS, CENTRAL FREIGHT STATIONS SEE HAD A TOTAL OF 45 INLAND CONTAINER DEPOTS. IT CLAIMED SPECIAL DEDUCTION 12 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) UNDER SECTION 80 - IA(4) FOR THE ASSESSMENT YEARS 2003 - 04 TO 2005 - 06. THE ASSESSING OFFICER DENIED SPECIAL DEDUCTION BUT THE TRIBUNAL ALLOWED IT . ON APPEAL TO THE HIGH COURT: HELD, ALLOWING THE APPEALS, THAT OUT OF THE TOTAL 45 INLAND CONTAINER DEPOTS OPERATED BY THE ASSESSEE, EXCEPT TWO ALL OTHERS WERE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES FOR THE PURPOSE OF SEC. 80IA(12)(CA). HAVING REG ARD TO THE PROVISIONS OF THE CUSTOMS ACT, THE COMMUNICATION ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS AS WELL AS THE MINISTRY OF COMMERCE AND INDUSTRY, THE OBJECT OF INCLUDING INLAND PORT AS AN INFRASTRUCTURE FACILITY AND ALSO THAT CUSTOMS CLEARA NCE ALSO TAKES PLACE IN THE INLAND CONTAINER DEPOT, THE ASSESSEES CLAIM THAT THE INLAND CONTAINER DEPOTS WERE INLAND PORTS UNDER EXPLANATION (D) TO SEC. 80IA(4) REQUIRED TO BE UPHELD. THE ISSUE HAS ALSO BEEN CLARIFIED BY THE GOVERNMENT VIDE CBEC CIRCULA R NO. 18/2009 DATED 08/06/2009. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE ALLOW THIS APPEAL OF THE ASSESSEE. 5.3.1. RESPECTFULLY FOLLOWING THE ABOVE O RDER OF THE HONBLE TRIBUNAL, THE ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCTION CLAIMED BY THE AS SESSEE U /S. 80IA(4) OF THE I.T. ACT. 4 . ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE OUTSE T , L EARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR S 2011 - 12 & 2012 - 13 IN ITA NOS. 15/VIZ/2015 & 178/VIZ/2016 , BY ORDER S DATED 29/04/2015 & 19/04/2017 RESPECTIVELY. IT IS SUBMITTED THA T THE LD. CIT(A) BY FOLLOWING THE ORDER PASSED BY THE TRIBUNAL, DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE UNDER SECTION 80IA(4) OF THE ACT AND SUBMITTED THAT THE SAME MAY BE UPHELD. HE ALSO RELIED UPON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT - II VS. CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD . REPORTED IN [2015] 59 TAXMANN.COM 78 (BOMBAY) AND ALSO THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE 13 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) CASE OF CIT VS. A.L. LOGISTICS (P) LTD. REPOR TED IN [2015] 55 TAXMANN.COM 283 (MADRAS). 6 . ON THE OTHER HAND , L EARNED DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 8 . THE ISSUE INVOLVED IN THIS APPEAL WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4) OR NOT , HAS ALREADY BEEN CONSIDERED BY THE COORDINATE BENCH OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2011 - 12 IN ITA NO.15/VIZ/2015 , BY ORDER DATED 29/04/2015 AND ALSO FOR THE ASSESSMENT YEAR 201 1 - 1 2 IN ITA NO. 178/VIZ/2016 BY ORDER DATED 19/04/2017 , WHEREIN THE TRIBUNAL HELD THAT THE ASSESSEE IS ELIGIBLE FOR CLAIM UNDER SECTION 80IA(4) AND UPHELD THE ORDER PASSED BY THE LD. CIT(A). FOR THE SAKE OF CONVENIENCE, THE ORDER PASSED BY THE TRIBUNAL IN ITA NO. 178/VIZ/2016 IS EXTRACTED AS UNDER: - 8. THE ONLY ISSUE FOR CONSIDERATION BEFORE US IS WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 - IA(4) OF THE ACT OR NOT? UNDER THE SIMILAR SET OF FACTS FOR THE EARLIER ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2011 - 12, THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 15/VIZAG/2015, BY ORDER DATED 29/04/2015 HAS CONSIDERED THE FACTS AND OTHER RELEVANT MATERIAL, PASSED A DETAILED ORDER BY HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 - IA(4) OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IS EXTRACTED IS UNDER: - 8. IN CIRCULAR NO. 18/2009 DATED 08/06/2009 ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS IN F.NO. 434/17/2009 - CUS.IV THE DIFFERENCE BETWEEN INLAND CONTAINER DEPOTS (ICD) AND CONTAINER FREIGHT STATIONS(CFS) HAS BEEN SPELT OUT IN THE FOLLOWING MANNER: (A) DEFINITION OF ICD: AN INLAND CONTAINER DEPOT MAY BE DEFINED AS: A COMMON USER FACILITY WITH PUBLIC AUTHORITY STATUS (EMPHASIS SUPPLIED) EQUIPPED WITH FIXED INSTALLATIONS AND OFFERING SERVICES FOR HANDLING AND TEMPORARY STORAGE OF IMPORT/EXPORT LADEN AND EMPTY CONTAINERS CARRIED UNDER CUSTOMS CONTROL AND WITH CUSTOMS AND 14 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) OTHER AGENCIES COMPETENT TO CLEAR GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE - EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT. TRANSHIPMENT OF CARGO CAN ALSO TAKE PLACE FROM SUCH STATIONS. (B) DEFINITION OF CFS: A CONTAINER FREIGHT STATION MAY BE DEFINED AS: CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS. FIRSTLY, CFS DO NOT HAVE 'PUBLIC AUTHORITY STATUS' WHEREAS ICD IS A PLACE THAT ACTS AS A 'SELF CONTAINED CUSTOMS STATION' AS CATEGORICALLY SPELT IN CIRCULAR OF CBEC DT. 08.06.2009. FURTHER THE SAID CIRCULAR CLEARLY DISTINGUISHES ICD AND CFS AND MAKES IT VERY OBVIOUS THAT CFS IS NOTHING BUT A WAREHOUSE. (C) DISTINCTION BETWEEN ICD & CFS: 'INLAND CONTAINER DEPOT IS A PLACE THAT ACTS AS A 'SELF CONTAINED CUSTOMS STATION' LIKE A PORT OR AIR CARGO UNIT WHERE - FILLING OF CUSTOMS MANIFESTS, BILLS OF ENTRY, SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE - EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AN D OUTRIGHT EXPORT, TRANSHIPMENT, ETC., TAKES PLACE.' 'CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS'. AN ICD IS A 'SELF CONTAINED CUSTOMS STATION' LIKE A PORT OR AIR CARGO UNIT WHERE FILING OF CUSTOMS MANIFESTS, BILLS OF ENTRYS, SHIPPING BILLS AND OTHER DECLARATIONS, ASSESSMENT AND ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPOR ARY ADMISSIONS, RE - EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT AND OUTRIGHT EXPORT, TRANSSHIPMENT, ETC., TAKE PLACE. AN ICD WOULD HAVE ITS OWN AUTOMATED SYSTEM WITH A SEPARATE STATION CODE [SUCH AS INTKD 6, INSNF6 ETC.] BEING ALLOTTED BY DIRECTORATE GENER AL OF SYSTEMS AND WITH IN - BUILT CAPACITY TO ENTER EXAMINATION REPORTS AND ENABLE ASSESSMENT OF DOCUMENTS, PROCESSING OF MANIFEST, AMENDMENTS, ETC. CONTAINER FREIGHT STATIONS ARE SPECIFIED AS CUSTOMS AREA UNDER CLAUSE (B) OF THE SAID SECTION 8 WHEREIN IM PORTED GOODS OR EXPORT GOODS ARE ORDINARILY KEPT BEFORE CLEARANCE BY THE CUSTOMS. A CFS IS ONLY A CUSTOMS AREA LOCATED IN THE JURISDICTION OF A COMMISSIONER OF CUSTOMS EXERCISING CONTROL OVER A SPECIFIED CUSTOMS PORT, AIRPORT, LCS/LCD. A CFS CANNOT HAVE AN INDEPENDENT EXISTENCE AND HAS TO BE LINKED TO A CUSTOMS STATION WITHIN THE JURISDICTION OF THE COMMISSIONER OF CUSTOMS. IT IS AN EXTENSION OF A CUSTOMS STATION SET UP WITH THE MAIN OBJECTIVE OF DECONGESTING THE PORTS. IN A CFS ONLY A PART OF THE CUSTOMS P ROCESSES MAINLY THE EXAMINATION OF GOODS IS NORMALLY CARRIED OUT BY CUSTOMS BESIDES STUFFING/DESTUFFING OF CONTAINERS AND AGGREGATION/SEGREGATION OF CARGO. THUS, CUSTOM'S 15 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) FUNCTIONS RELATING TO PROCESSING OF MANIFEST, IMPORT/EXPORT DECLARATIONS AND ASSESSME NT OF BILL OF ENTRY/SHIPPING BILL ARE PERFORMED IN THE CUSTOM HOUSE/CUSTOM OFFICE THAT EXERCISES JURISDICTION OVER THE PARENT PORT/AIRPORT / ICD/LCS TO WHICH THE SAID CFS IS ATTACHED. IN THE CASE OF CUSTOMS STATIONS HAVING FACILITY OF AUTOMATED PROCESSING OF DOCUMENTS, TERMINALS ARE PROVIDED AT SUCH CFSS FOR RECORDING THE RESULT OF EXAMINATION, ETC. IN SOME CFSS, EXTENSION SERVICE CENTERS ARE AVAILABLE FOR FILING DOCUMENTS, AMENDMENTS ETC. HOWEVER, THE ASSESSMENT OF THE DOCUMENTS ETC. IS CARRIED OUT CENTRALLY . AN ICD MAY ALSO HAVE A NUMBER OF CFSS ATTACHED TO IT WITHIN THE JURISDICTION OF THE COMMISSIONER OF CUSTOMS JUST AS IN THE CASE OF A PORT AND ITS CFSS (AS ON DATE THERE ARE 28 CFSS LINKED TO CHENNAI PORT) [REFER CIRCULAR NO. 18/2009 - CUS. , DATED 8 - 6 - 2009]. A STANDALONE CUSTOMS CLEARANCE F ACILITY IN AN INLAND COMMISSIONE RATE CANNOT BE APPROVED BY THE COMMISSIONER AS A CFS, IF THERE IS NO ICD/PORT WITHIN ITS JURISDICTION TO WHICH THE SAID CFS CAN BE ATTACHED. SUCH A FACILITY CAN, HOWEVER, BE NOTIFIED AS AN ICD I.E., AS AN INDEPENDENT CUSTOMS STATION WITH PROVISION FOR FILING AND ASSESSMENT OF DOCUMENTS AND EXAMINATION OF GOODS. A CUSTOMS CLEARANCE FACILITY COULD BE ESTABLISHED AS A CFS AT A PORT CITY FOR EXAMINATION OF IMPORTED/EXPORT GOODS, SINCE THE CFS WOULD FALL UNDER THE JURISDICTION OF COMMISSIONER OF CUSTOMS, HAVING JURISDICTION OVER THE CUSTOMS PORT WITH WHICH THE CFS WOULD BE ATTACHED. FURTHER, IN A PORT CITY SUCH AS CHENNAI OR MUMBAI, IT MAY BE POSSIBLE TO DEVELOP AN ICD WITHIN THE TERRITORIA L JURISDICTION OF THE CONCERNED CUSTOMS COMMISSIONERATE IN ADDITION TO EXISTING CFSS. SUCH AN ICD SHOULD BE CAPABLE OF PROVIDING FULL - FLEDGED CUSTOMS SERVICES, INDEPENDENT EDI SYSTEM, AND ALL PROCEDURES MEANT FOR TRANSHIPMENT OF CARGO HAVE TO BE FOLLOWED F OR MOVEMENT OF GOODS FROM THE PORT OF IMPORT TO THE ICD. FURTHER, SUCH AN ICD WOULD FUNCTION AS AN INDEPENDENT CUSTOMS STATION IN ALL RESPECTS AND WOULD NOT BE ATTACHED TO ANY OTHER PORT OR AIRPORT. THUS, IN RESPECT OF PROPOSALS FOR SETTING UP OF ICD/CONTA INER FREIGHT STATION FROM PROSPECTIVE OPERATORS IT HAS TO BE EXAMINED WHETHER THE PROPOSED FACILITY IS REQUIRED TO BE APPROVED AS AN ICD OR CFS. MOVEMENT OF GOODS FROM A PORT/AIRPORT/LCS TO AN ICD IS IN THE NATURE OF MOVEMENT FROM ONE CUSTOMS STATION TO ANOTHER, GOVERNED BY GOODS IMPORTED (CONDITION OF TRANSHIPMENT) REGULATIONS, 1995. ON THE OTHER HAND, MOVEMENT OF GOODS FROM A PORT/AIRPORT/LCS OR AN ICD TO A CFS IS AKIN TO LOCAL MOVEMENT FROM A CUSTOMS AREA OF THE CUSTOMS STATION TO ANOTHER CUSTOMS AREA OF THE SAME STATION, COVERED BY LOCAL PROCEDURE EVOLVED BY THE COMMISSIONER OF CUSTOMS AND COVERED BY BONDS, BANK GUARANTEE, ETC. FURTHER, THE PERSON UNDERTAKING THE TRANSHIPMENT WOULD BE REQUIRED TO FOLLOW THE PRESCRIBED PROCEDURE. AS RIGHTLY CONTENDED BY THE LEARNED AR OF THE APPELLANT, THE ABOVE CIRCULAR ANSWERS IN A VERY CLEAR AND CATEGORICAL MANNER THE OBJECTIONS RAISED BY THE ASSESSING OFFICER. 9. AS FAR AS THE CONTENTION THAT THERE IS NO AGREEMENT WITH ANY GOVERNMENT OR STATUTORY AUTHORITY, WE FI ND THAT THE ASSESSEE HAS PLACED 16 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) ON RECORD LETTER OF INTENT. IN FACT THE MINISTRY OF COMMERCE AND INDUSTRY, VIDE LETTER DATED 10/02/2005, WRITTEN TO THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY REGARDING SETTING UP OF A CFS AT VISAKHAPATNAM APROPOS THE ASS ESSEES CASE. 10. IN THE CASE OF A L LOGISTICS P. LTD. (SUPRA) THE CHENNAI BENCH OF THE TRIBUNAL AT PARA 7 HELD AS FOLLOWS: 7. NOW, WE PROCEED TO THE NEXT ISSUE, WHETHER IN THE ABSENCE OF SPECIFIC AGREEMENT WITH THE CENTRAL/STATE GOVERNMENT, LOCAL AUTHO RITY OR STATUTORY BODY, THE ASSESSEE IS ENTITLED TO CLA IM THE BENEFIT OF SECTION 80IA( 4)(I)? THE ASSESSEE HAD MADE AN APPLICATION FOR SETTING UP OF CFS AT HALDIA. IN RESPONSE TO THE APPLICATION OF ASSESSEE, THE DEPARTMENT OF COMMERCE, INFRASTRUCTURE DIVISI ON, MINISTRY OF COMMERCE AND INDUSTRY APPROVED THE PROPOSAL OF THE ASSESSEE FOR SETTING UP OF CFS AT HALDIA FOR HANDLING IMPORT/EXPORT OF CARGO SUBJECT TO EXECUTION OF CERTAIN DOCUMENTS AND COMPLIANCE OF OTHER TERMS AND CONDITIONS AS STATED IN THE LETTER. THE ID. COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD LETTER DT.27 - 05 - 2003 FROM THE MINISTRY OF COMMERCE AND INDUSTRY PERMITTING THE ASSESSEE TO SET UP CFS AT RALDIA. THE CONTENTS OF THE LETTER ARE REPRODUCED HEREIN BELOW: 'NO. 16/6/2003 - LNFRA - I GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPTT. OF COMMERCE INFRASTRUCTURE DIVISION UDYOG BHAWAN, NEW DELHI, DATED THE 27 TH MAY,2003. TO THE DIRECTOR, M/ S A L LOGISTICS PVT. LTD., CHENNAI. SUBJECT: SETTING UP OF AN CFS AT HALDIA. SIR, I AM DIRECTED TO REFER TO YOUR APPLICATION DATED 8.2.2003 ON THE ABOVE SUBJECT AND TO SAY THAT THE GOVERNMENT HAS APPROVED YOUR PROPOSAL FOR SETTING UP OF AN CONTAINER FREIGHT STATION AT HALDIA FOR HANDLING IMPORT AND EXPORT CARGO. THE APPROVAL IS SUBJECT TO T LE FOLLOWING TERMS AND CONDITIONS: - (A) THE LETTER OF INTENT HOLDER SHALL TAKE ADEQUATE STEPS TO CREATE PROPER INFRASTRUCTURE KEEPING IN VIEW THE INDICATIVE NORMS GIVEN IN PARTS A& B OF THE GUIDELINES FOR SETTING UP INLAND CONTAINER DEPOTS I CONTAINE R FREIGHT STATIONS (ICDS/CFS) WITHIN A PERIOD OF ONE YEAR FROM THE DATE OF ISSUE OF THIS LETTER. (B) NECESSARY BOND AND GUARANTEES, AS REQUIRED, WOULD BE EXECUTED WITH THE CONCERNED COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE. (C) THE APPROVAL WOULD BE SU BJECT TO CANCELLATION IN THE EVENT OF VIOLATION OF THE CUSTOMS AND OTHER LAWS OF THE LAND AND RULES. (D) A QUARTERLY PROGRESS REPORT OF THE IMPLEMENTATION SHALL BE SENT TO THE MINISTRY OF COMMERCE. (E) THE WORKING OF THE CFS WILL BE OPEN TO REVIEW BY THE INTER MINISTERIAL COMMITTEE. (F) FORMALITIES IN RESPECT OF ACQUISITION/POSSESSION OF THE LAND SHALL BE COMPLETED WITHIN 60 DAYS AND INTIMATED TO THE MLO COMMERCE, FAILING WHICH THE APPROVAL GRANTED WOULD BE AUTOMATICALLY CANCELLED. 17 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) 2. THE FACILITY TO BE SET UP SHALL BE FULL Y COMPUTERIZED, WITH EDI COMPATIBILITY AND A MINIMUM COMPLEMENT OF EQUIPMENT AND ACCESSORIES AS NECESSARY SHALL BE MADE AVAILABLE AT THE FACILITY. THE INDICATIVE LIST OF EQUIPMENT/ACCESSORIES CONSIDERED NECESSARY IS ANNEXED. THE STATUS REGARDING CONFIRMATION OF THE INSTALLATION! AVAILABILITY OF THE ITEMS SHALL BE FURNISHED TO THE APPROPRIATE AUTHORITIES TO FACILITATE ISSUE OF REQUISITE NOTIFICATION. 3. PLEASE ACKNOWLEDGE RECEIPT OF THIS LETTER. YOURS FAITHFULLY, SD/ - (N.G. BISWAS) DI RECTOR' A PERUSAL OF CLAUSE 'B' OF THE ABOVE LETTER SHOWS THAT THE ASSESSEE WAS REQUIRED TO EXECUTE NECESSARY BOND AND GUARANTEES WITH THE CONCERNED COMMISSIONER OF CUSTOMS AN CENTRAL EXCISE. IT WAS ONLY ON THE COMPLIANCE OF ALL THE TERMS AND CONDITIONS MENTIONED IN THE AFORESAID LETTER THAT THE ASSESSEE WAS ALLOWED TO CARRY ON THE SERVICES OF CFS. THE ASSESSEE ON THE COMPLIANCE OF THE TERMS AND CONDITIONS AS MENTIONED IN THE LETTER, WAS NOTIFIED AS CFS COMPLEX FOR THE PURPOSE OF RECEIVING, STORING, IMPOR T CONTAINERS, RECEIVING/CONSOLIDATING EXPORT CARGO ETC. VIDE PUBLIC NOTICE OUO - 1L - 2013. THE PUBLIC NOTICES WERE ISSUED BY THE OFFICE OF THE COMMISSIONER OF CUSTOMS (PORT) KOLKATA. 8. THUS, IT IS EVIDENT THAT THE PROPOSAL OF THE ASSESSEE WAS ACCEPTED BY TH E GOVERNMENT ON CERTAIN CONDITIONS WHICH WERE DULY COMPLIED WITH BY THE ASSESSEE. THERE MAY NOT BE ANY SPECIFIC AGREEMENT, BUT THE SEQUENCES OF EVENTS CLEARLY SHOW THAT THE ASSESSEE IS PROVIDING CFS FACILITY IN ACCORDANCE WITH THE CONDITIONS LAID DOWN BY T HE GOVERNMENT. IN SUCH CIRCUMSTANCES THERE IS NO NEED TO INSIST FOR THE SPECIFIC EXECUTION OF AGREEMENTS. THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF UNITED LINER AGENCIES OF INDIA (P.) LTD (SUPRA), HAS TAKEN A SIMILAR VIEW, WHERE NO SPECIFIC AGRE EMENT WITH THE STATE GOVERNMENT WAS ENTERED INTO BUT FROM THE APPROVALS GRANTED TO THE ASSESSEE IT WAS INFERRED THAT ASSESSEE SHOULD BE DEEMED TO HAVE ENTERED INTO AN AGREEMENT WITH THE STATE GOVERNMENT. THUS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSE E HAS COMPLIED WITH ALL THE PROVISIONS OF SECTION 80IA(4)(I) AND IS ELIGIBLE TO CLAIM DEDUCTION UNDER THE SAID SECTION. THE IMPUGNED ORDER IS SET ASIDE. THE APPEAL OF THE ASSESSEE IS ALLOWED. 11. RESPECTFULLY FOLLOWING THE COORDINATE BENCH ORDER, WE HOLD THAT THE CONTENTION OF THE AO THAT THERE IS NO AGREEMENT AND HENCE THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION IS NOT THE CORRECT POSITION OF LAW. 12. THE HONBLE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION LTD. (SUPRA) HELD AS FOLLOWS: THE TE RM INFRASTRUCTURE FACILITY WAS DEFINED IN SECTION 80 - IA(12)(CA) OF THE INCOME TAX ACT, 1961, TO MEAN A ROAD, HIGHWAY, BRIDGE, AIRPORT, PORT OR RAIL SYSTEM OR ANY OTHER PUBLIC FACILITY OF A SIMILAR NATURE AS MAY BE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES. THE FINANCE (NO. 2), 1998, INCLUDED THE WORDS INLAND WATER WAYS AND INLAND PORTS IN THE DEFINITION OF INFRASTRUCTURE FACILITY IN SUB - SECTION (12), CLAUSE (CA), WITH EFFECT FROM APRIL 1, 1999. WHEN THE ENTIRE SECTION WAS RECAST AND EVEN AFTER SEV ERAL AMENDMENTS 18 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) WERE THEREAFTER MADE TO THE SECTION, INLAND PORTS CONTINUED TO ENJOY THE DEDEDUCTION AS INFRASTRUCTURE FACILITY. THERE IS NO DEFINITION OF THE WORDS INLAND PORTS IN ANY OF THE DICTIONARIES. BUT THE WORDS INLAND CONTAINER DEPOT WERE INT RODUCED IN SEC. 2(12) OF THE CUSTOMS ACT, 1962, WHICH DEFINES CUSTOMS PORT. THIS WAS BY WAY OF AN AMENDMENT MADE BY THE FINANCE ACT, 1983, WITH EFFECT FROM MAY 13, 1983. SIMULTANEOUSLY, CLAUSE (AA) WAS INSERTED IN SEC. 7(1) OF THE ACT UNDER WHICH THE CCH I ISSUE NOTIFICATION APPOINTING THE PLACES WHICH ALONE SHALL BE CONSIDERED AS INLAND CONTAINER DEPOTS FOR THE UNLOADING OF IMPORTED GOODS AND LOADING OF EXPORTED GOODS. THE CENTRAL BOARD OF EXCISE AND CUSTOMS ISSUED A CLARIFICATION THAT INLAND CONTAINER DE POTS WERE INLAND PORTS. THE POWER TO NOTIFY INFRASTRUCTURE FACILITIES FOR THE PURPOSE OF THE SECTION WAS TAKEN AWAY FROM THE CENTRAL BOARD OF DIRECT TAXES W.E.F. APRIL 1,2002. HOWEVER, THERE WAS NO PROVISION MADE IN THE ACT SAYING THAT NOTIFICATIONS ISSUED EARLIER WOULD CEASE TO HAVE FROM APRIL 1, 2002.THE ASSESSEE, A PUBLIC SECTOR UNDERTAKING, WAS ENGAGED IN THE BUSINESS OF HANDLING AND 12 TRANSPORTATION OF CONTAINERISED CARGO. THE ACTIVITY OF THE ASSESSEE WAS CARRIED OUT MAINLY ON ITS INLAND CONTAINER DEP ORTS, CENTRAL FREIGHT STATIONS SEE HAD A TOTAL OF 45 INLAND CONTAINER DEPOTS. IT CLAIMED SPECIAL DEDUCTION UNDER SECTION 80 - IA(4) FOR THE ASSESSMENT YEARS 2003 - 04 TO 2005 - 06. THE ASSESSING OFFICER DENIED SPECIAL DEDUCTION BUT THE TRIBUNAL ALLOWED IT. ON AP PEAL TO THE HIGH COURT: HELD, ALLOWING THE APPEALS, THAT OUT OF THE TOTAL 45 INLAND CONTAINER DEPOTS OPERATED BY THE ASSESSEE, EXCEPT TWO ALL OTHERS WERE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES FOR THE PURPOSE OF SEC. 80IA(12)(CA). HAVING REGARD TO THE PROVISIONS OF THE CUS TOMS ACT, THE COMMUNICATION ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS AS WELL AS THE MINISTRY OF COMMERCE AND INDUSTRY, THE OBJECT OF INCLUDING INLAND PORT AS AN INFRASTRUCTURE FACILITY AND ALSO THAT CUSTOMS CLEARANCE ALSO TAKES PLACE IN THE INLA ND CONTAINER DEPOT, THE ASSESSEES CLAIM THAT THE INLAND CONTAINER DEPOTS WERE INLAND PORTS UNDER EXPLANATION (D) TO SEC. 80IA(4) REQUIRED TO BE UPHELD. 13. THE ISSUE HAS ALSO BEEN CLARIFIED BY THE GOVERNMENT VIDE CBEC CIRCULAR NO. 18/2009 DATED 08/06/20 09. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE ALLOW THIS APPEAL OF THE ASSESSEE. 9. INSOFAR AS CASE LAWS RELIED ON BY THE ASSESSEE IS CONCERNED, IN THE CASE OF A.L. LOGISTICS (P) LTD. (SUPRA), THE HON'BLE MADRAS HIGH COURT HELD THAT PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS (INFRASTRUCTURE FACILITY), CONTAINER FREIGHT STATION IS PART OF INLAND PORT AND, THEREFORE, IS AN INFRASTRUCTURE FACILITY, AS DEFINED IN EXPLANATION TO SECTION 80 - IA(4)(I) OF THE ACT, ASSESSEE IS ELIGIBLE FOR DEDUCTION. IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA), THE HON'BLE BOMBAY HIGH COURT HAS HELD THAT PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS (INFRASTRUCTURE FACILITY), SET UP WITHIN PRECINCTS OF PORT, THEN, HAVING CONSIDERED ITS PROXIMITY TO SEA - PORT AND ITS ACTIVITIES, IT CAN BE SAFELY CONCLUDED THAT DEDUCTION A DMISSIBLE UNDER SUB - SECTION (4) OF SECTION 80 - IA CAN BE CLAIMED BY BOTH ICDS AND CFSS. 19 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) 10. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY FOLLOWING THE DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011 - 12 IN ITA NO. 15/VIZAG/ 2015, BY ORDER DATED 29/04/2015 AND ALSO THE DECISIONS OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA) AND THE HON'BLE MADRAS HIGH COURT IN THE CASE OF A.L. LOGISTICS (P) LTD. (SUPRA), THE APPEAL F ILED BY THE REVENUE IS DISMISSED. 9. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY FOLLOWING THE DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011 - 12 IN ITA NO. 15/VIZAG/2015 , BY ORDER DATED 29/04/2015 AND ALSO BY FOLLOWING THE DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012 - 13 IN ITA NO. 178/VIZ/2016 DATED 19/04/2017 AND ALSO THE DECISIONS OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA) AND THE HON'BLE MADRAS HIGH COURT IN THE CASE OF A.L. LOGISTICS (P) LTD. (SUPRA), WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). THUS, TH IS APPEAL FILED BY THE REVENUE IS DISMISSED . 10 . IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 1 1 T H DAY OF OCTOBER , 201 7 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 1 T H OCTOBER , 201 7 . VR/ - 20 ITA NO. 342/VIZ/2017 ( M/S. GATEWAY EAST INDIA PVT. LTD. ) COPY TO: 1. THE ASSESSEE M/S. GATEWAY EAST INDIA PVT. LTD., CONTAINER FREIGHT STATION, VPT EXIM PARK, OPP: GAIL, SHEELA NAGAR, VISAKHAPATNAM. 2. THE REVENUE - A CIT, CIRCLE - 3(1), VISAKHAPATNAM. 3. THE PCIT - 1, VISAKHAPATNAM. 4. THE CIT(A) - 1, VISAKHAPATNAM. 5. THE D.R ., VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.