The ACIT, Circle-3, JAMNAGAR V. M/s. Seabird Marine Services P. Ltd., JAMNAGAR

ITA 464/RJT/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0162 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-08-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 25-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANKIT GOKANI
• Assessee Lawyers: YOGESH PANDEY CITA
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (CONDUCTED THROUGH E-COURT AT AHMEDABAD) [CORAM: SHRI N.K. BILLAIYA, AM & SHRI MAHAVIR PRASA D, JM] ITA NO S . 464 / RAJ /20 1 4 ASSESSMENT YEAR :2011-12 ACIT, CIRCLE - 3, JAMNAGAR V/S . M/S SE ABIRD MARINE SERVICES PVT. LTD., 215-218, VENUS APARTMENT, OPP. CRICKET BUNGLOW, JAMNAGAR-336001 ITA NO S . 339 /RAJ/201 3 ASSESSMENT YEAR :2010-11 ACIT, CIRCLE - 3, JAMNAGAR V/S . M/S SEABIRD MARINE SERVICES PVT. LTD., 215-218, VENUS APARTMENT, OPP. CRICKET BUNGLOW, JAMNAGAR-336001 ITA NO S . 388 /RAJ/201 5 ASSESSMENT YEAR :2012-13 DCIT, CIRCLE - 1, JAMNAGAR V/S . M/S SEABIRD MARINE SERVICES PVT. LTD., 215-218, VENUS APARTMENT, OPP. CRICKET BUNGLOW, JAMNAGAR-336001 PAGE 2 PAN NO. A ACCS 9869 C (APPELLANT) .. (RESPONDENT) /BY ASSESSEE SHRI YOGESH PANDEY, CIT(A) DR / BY REVENUE SHRI ANKIT GOKANI, CA /DATE OF HEARING 09 . 08 .201 6 /DATE OF PRONOUNCEMENT 16 . 0 8 .20 1 6 O R D E R PER :MAHAVIR PRASAD, JM THERE ARE THREE APPEALS OF THE REVENUE FOR THE ASSE SSMENT YEARS 2010- 11 AND 2011-12 & 2012-13. ALL THESE WERE HEARD TOGE THER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. 2. THE ADDITIONAL GROUND OF THE DEPARTMENT IS AS UN DER: 1. INCOME FROM HOUSE PROPERTY (RENT INCOME) FROM J NPT OF RS. 53,21,208/-& FROM MUNDRA OF RS 17,73,000/- AND INCOME FROM INTEREST OF RS 1, 17,21, 544/- SHOULD N OT BE TREATED AS INCOME DERIVED FROM THE BUSINESS OF INFRASTRUCTURE FACILITY AND IT SHOULD BE EXCLUDED F ROM DEDUCTION U/S 80IA(4). 3. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING SERVICE RELATING TO SHIPPING AND ALLIED ACTIVITIES LIKE DEV ELOPING AND MAINTAIN OF INLAND CONTAINER DEPORTS AND CONTAINER FREIGHT STATIONS. T HE BUSINESS ACTIVITIES OF THE ASSESSEE ARE AT JNPT, NAVA SEVA PORT AND MUNDRA POR T. IN THIS CASE THE ASSESSMENT U/S 143(3) WAS FINALIZED AFTER DISALLOWI NG THE CLAIM OF RS.40,05,24,711/- FOR AY 2010-11, RS.51,98,73,8107- FOR AY 2011-12 AND RS.66,75,56,995 FOR AY 2012-13 TOWARDS 80IA(4). THE REAFTER, THE LD. CIT(A), PAGE 3 JAMNAGAR HAS ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE DISALLOWANCE MADE TOWARDS 80IA(4) FOR ALL THE AYS. 4. WE NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IA INCLUDING INCOME FROM HOUSE PROPERTY INCOME AND INCOME FROM O THER SOURCES WHEREAS THE DEDUCTION U/S 80IA IS TO BE RESTRICTED TO THE I NCOME FROM BUSINESS OR PROFESSION ONLY. THE BREAKUP OF HOUSE PROPERTY (REN T INCOME) INCOME AND INCOME FROM OTHER SOURCES FOR ALL THE AYS ARE AS UN DER : AY HOU SE PROPERTY INCOME (RENT INCOME) INCOME FROM OTHER SOURCES (I.E. INTEREST INCOME) AY 10 - 11 1,06,66,952 12,16,315 AY 11 - 12 88,56,273 59,76,764 AY 12 - 13 (FROM JNPT) 53,21,208 (FROM MUNDRA) 17,73,000 1,17,21,544 5. WE NOTED THAT GROUND NO. 1 IS AGAINST THE DENIA L OF DEDUCTION U/S 80IA(4) OF THE ACT IN CASE OF INCOME DERIVED FROM T HE INDUSTRIAL UNDERTAKING OF CONTAINER FREIGHT STATION AT JNPT. AO HAS DISALL OWED THE CLAIM OF THE APPELLANT. AO HAS EXAMINED THE CLAIM OF DEDUCTION B Y CONSIDERING THE CONDITIONS MENTIONED IN PROVISIONS OF SECTION 80IA( 4) VIS A VIS CIRCULAR NO 10 OF 2005 DT 16/12/2005 AS TO WHETHER THE CONDITION I SSUED VIDE THE CIRCULAR WAS SATISFIED OR NOT. AO HAS RELIED ON CERTIFICATE ISSUED BY JNPT DATED 29/10/2005 BEARING REFER NO JNPT/FIN/2005/290 WHERE IN IT HAS BEEN CERTIFIED THAT CFS IS SITUATED ON LAND THAT DOES NO T BELONG TO THE PORT AND THE CFS OF THE ASSESSEE IS EXTENDED ACTIVITY OF THE POR T. THIS CERTIFICATE WAS WITHDRAWN BY JNPT VIDE ITS LETTER DATED 19.10.2007. THE ASSESSING OFFICER HAS ALSO MADE THE COMMUNICATION WITH THE JNPT AUTHORITI ES AND GOT CONFIRMATION PAGE 4 OF ISSUE OF CERTIFICATE DATED 29.10.2005 AND ITS SU BSEQUENTLY WITHDRAWN ON 19,10.2007. BASED ON THE ABOVE TWO COMMUNICATION OF JNPT WITH THE ASSESSING OFFICER, HE FURTHER SOUGHT CLARIFICATION FROM THE JNPT VIDE LETTER DATED 13.04.2012 WHICH WAS CLARIFIED BY THE JNPT VI DE LETTER DATED 30.05.2012 STATING THAT AS CFS OF THE APPELLANT IS NOT LOCATED ON THE LAND OF THE PORT, SO PORT ( JNPT ) MAY NOT BE ABLE TO INDIC ATE WHETHER IT IS FORMING PART OF THE PORT OR IN COURSE OF THEIR ROUTINE ACTI VITIES AS PER INCOME TAX ACT 1961 IN RESPECT OF SECTION 80 IA OF THE INCOME TAX ACT WHETHER THEY .ARE ELIGIBLE FOR DEDUCTION. THE ASSESSING OFFICER HAS A LSO RELIED ON THE LETTER DATED 6/01/2011 OF BOARD F NO. 178/42/2010-ITA-I WHERE IT IS SUBMITTED THAT BENEFIT OF CAN BE EXTENDED IF SUCH INFRASTRUCTURE F ACILITY IS LOCATED AT THE PORT AND IN AS IT IS CATEGORICALLY INFORMED THAT SINCE C FS OF SEA-BIRD MARINE IS NOT LOCATED OR THE LAND OF THE PORT SO PORT MAY NOT BE ABLE TO INDICATE WHETHER IT IS FORMING PART OF THE PORT IN COURSE OF ROUTINE PO RT ACTIVITIES AS PER INCOME TAX ACT IN RESPECT OF SECTION 80IA OF THE SAID ACT. 6. LD. CIT(A) HAS FOLLOWED THE JUDGMENTS OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION OF INDIA VS. A CIT REPORTED IN 346 ITR 140 AND SPECIAL BENCH IN THE CASE OF ALL CARGO GLOB AL LOGISTICS LTD. VS. ACIT REPORTED IN 137 ITD 287(MUM) THAT APPELLANT WAS ENT ITLED FOR DEDUCTION. THE CIT(A) ALSO DIRECTED ASSESSING OFFICER TO GRANT THE DEDUCTION TO THE ASSESSEE OF RS.40,05,24,711/-. THE GROUND NO.1 WAS ALLOWED B Y THE CIT(A). 7. WE NOTED THAT THOUGH IN THE ASSESSMENT ASSESSING OF FICER HAS DISALLOWED ALL THE DEDUCTION BUT LD. CIT(A) HAS GIV EN RELIEF TO THE ASSESSEE. IN THE REJOINDER, LD. AR ASSESSEE SUBMITTE D THAT INTEREST INCOME WAS ALREADY BEEN REDUCED AT THE TIME OF CALC ULATION OF CLAIM U/S 80IA(4) OF THE ACT AND LD. DR ALSO CONCEDED THE SAM E. HENCE ISSUE REMAINED WITH US THAT RENTAL INCOME CAN HAVE DEDUCT ION U/S 80IA(4) OF PAGE 5 THE ACT. WE FURTHER NOTED THAT AS CAN BE OBSERVED F ROM THE HISTORY CHART, IN CASE CFS FOR THE INITIAL YEAR I.E. AY 200 5-06 AND FOR THE AY 2006-07, THE DEDUCTION WAS GRANTED AND SUBSEQUENTLY , THE ISSUE WAS REOPENED U/S 148 OF THE ACT BY THE LD. AO WHICH WAS CHALLENGED BY THE ASSESSEE BEFORE THE HONBLE GUJARAT HIGH COURT (BEIN G SPECIAL CIVIL APPLICATION NO. 925 OF 2013 FOR AY 2005-06 AND SPEC IAL CIVIL APPLICATION NO. 3005 OF 2014 FOR AY 2006-07). HOWEVER, FOR THE SUBSEQUENT YEARS I.E. AY 2007-08 TO 2009-10 THE CLAIM OF 80IA(4) WAS ACCEPTED IN PRINCIPLE AND ONLY DISPUTE IS REGARDING WHETHER THE INCOME OF THE RENT RECEIVED BY CFS IN TERMS OF THE LETTER OF PERMISSIO N IS INCOME DERIVED FROM THE PORT FACILITY OR NOT. IN SUPPORT OF CONTEN TION, ASSESSEE HAS FILED DETAILED PAPER BOOK CONTAINING FOLLOWING ORDERS: A) COPY OF THE ASSESSMENT ORDER FOR AY 2007-08 U/S 143 (3) DATED 11/12/2009 (PAPER BOOK PAGE NO. 23-35) B) COPY OF THE ASSESSMENT ORDER FOR AY 2008-09 U /S 143 (3) DATED 25/02/2010 (PAPER BOOK PAGE NO. 36-39) C) COPY OF THE ASSESSMENT ORDER FOR 2009-10 U/S 143(3)DATED 29/07/2011 (PAPER BOOK PAGE NO. 40-45) D) COPY OF THE ORDER OF HON ITAT FOR AY 2007-0 8, 2008-09 AND 2009-10 DATED 06/ 12/2012 (PAPER BOOK PAGE NO. 46-51) 7.1 IN THE ABOVE SAID YEARS, ASSESSING OFFICER HAS GIVEN DEDUCTION TO THE ASSESSEE U/S 80IA(4) OF THE ACT. THE ONLY DISPU TE REGARDING THE QUANTUM AND THAT TOO WHETHER THE RENTAL INCOME IS D EDUCTIBLE U/S 80IA(4) OF THE ACT INCOME DERIVED FROM THE PORT OR NOT. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND, PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE FIND NO INFIRMITY IN THE ORDER PASSED BY CIT(A) EXCEPT THE PAGE 6 RENTAL INCOME, THEREFORE, WE SENT BACK THIS MATTER TO THE ASSESSING OFFICER WHO WILL DECIDE AFTER EXAMINING THE DOCUMEN TS ETC. WHETHER THE RENTAL INCOME CAN BE DEDUCTED U/S 80IA(4) OR NOT. W E ALSO DIRECT THE ASSESSING OFFICER TO GIVE PROPER NOTICE AND SUFFICI ENT TIME TO THE ASSESSEE AND ASSESSEE WILL COOPERATE THE ASSESSING OFFICER FOR ADJUDICATION OF THE MATTER 9. IN THE RESULT, APPEALS OF THE REVENUE ARE ALLOWE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 16.08.2016 SD/- SD/- (N.K. BILLAIYA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY AKS / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ! '# $ / CONCERNED CIT 4. $ - / CIT (A) 5. %&' (('# , '# , ! / DR, ITAT, AHMEDABAD 6. '+, / GUARD FILE. BY ORDER/ , / PAGE 7 STRENGTHEN PREPARATION & DELIVERY OF ORD ERS IN THE ITAT 1) DATE OF TAKING DICTATION 0 9 . 08.2016 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 09 . 0 8 .201 6 4) DATE OF CORRECTION 11.08.2016 5) DATE OF FURTHER COR RECTION 12.08.2016 6) DATE OF INITIAL SIGN BY MEMBERS 7) ORDER UPLOADED ON 18.08.2016 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES & DOC 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 16.08.2016