ITO 2(1)(4), MUMBAI V. AMEYA LOGISTICS P.LTD, RAIGAD

ITA 492/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6338 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 23-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Assessee Lawyers: RUTUJA MEHTA
• Keywords: Business income; Opportunity of being heard; Earning of tax free income; Rule 8D
• Section: 143(3); 14A; 115JB; 80IB; 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 492/MUM/2017 ASSESSMENT YEAR: 2013 - 14 ITO - 2(1)(3), R. NO. 553, 5 TH F LOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020. VS. M/S AMEYA LOGISTICS PVT. LTD. VILLAGE, DHASAKOSHI POST KHOPALI, TALUKA URAN, DIST RAIGAD. PAN NO. AAECA4562C APPELLANT RESPONDENT C.O. NO. 119 /MUM/2018 (ITA NO. 492 /MUM/2017) ASSESSMENT YEAR: 2013 - 1 4 M/S AMEYA LOGISTICS PVT. LTD. VILLAGE, DHASAKOSHI POST KHOPALI, TALUKA URAN, DIST RAIGAD. VS. ITO - 2(1)(3), R. NO. 553, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020. PAN NO. AAECA4562C APPELLANT RESPONDENT REVENUE BY : MR. B. JAYA KUMAR , CIT - DR ASSESSEE BY : MR. MADHUR AGARWAL & MS. RUTUJA MEHTA , AR DATE OF HEARING : 30 /1 0 /2018 DATE OF PRONOUNCEMENT : 25/01/2019 M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 2 ORDER PER N.K. PRADHAN, AM THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 4 , MUMBAI [IN SHORT CIT(A)] AND ARISE OUT OF THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER (AO) U/S 143(3) OF THE INCOME TAX ACT 1961, (THE ACT). WE BEGIN WITH THE GROUNDS OF APPEAL FILED BY THE REVENUE. 2. THE 1 ST GROUND OF APPEAL WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80IA OF THE INCOME TAX ACT, 1961 EVEN THOUGH ACTIVITIES UNDERTAKEN BY THE ASSESSEE DO NOT FALL WITHIN CLAUSE (D) OF THE EXPL ANATION TO SECTION 80IA(4) DEFINING THE TERM INFRASTRUCTURE FACILITY. 3. ON PERUSAL OF THE COMPUTATION OF TOTAL INCOME, THE AO NOTICED THAT THE ASSESSEE - COMPANY HAD CLAIMED DEDUCTION OF RS.75,37,30,223/ - U/S 80IA(4) OF THE ACT. AS PER FORM NO. 10CCB, THE D ATE OF COMMENCEMENT OF OPERATION/ACTIVITY OF THE UNDERTAKING WAS JANUARY 2009. THE IMPUGNED ASSESSMENT YEAR IS THE 4 TH ONE, WHEREIN THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IA OF THE ACT, THE FIRST YEAR BEING AY 2010 - 11. THE ASSESSING OFFICER ( AO ) HAS DISA LLOWED THE CLAIM OF THE ASSESSEE BY HOLDING THAT CONTAINER FREIGHT STATION (CFS) IS NOT AN ELIGIBLE INFRASTRUCTURE FACILITY AS PROVIDED IN EXPLANATION TO SECTION 80IA(4) OF THE ACT. AS PER THE AO THE SAME IS NEITHER A PORT NOR AN INLAND PORT AS M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 3 MENTIONED I N THE SAID EXPLANATION. THEREFORE, THE AO DENIED THE ABOVE CLAIM OF DEDUCTION U/S 80IA MADE BY THE ASSESSEE. 4. IN APPEAL, THE LD. CIT(A) FOLLOWED THE ORDER OF THE TRIBUNAL IN ITA NO. 6110 & 6111/MUM/2014 DATED 04.08.2016 AND DIRECTED THE AO TO ALLOW DEDUC TION OF RS.75,37,30,223/ - U/S 80IA OF THE ACT. 5. BEFORE US, THE LD. DR SUPPORTS THE ORDER PASSED BY THE AO. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THE ABOVE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT DATED 24.04.2 018 OF THE HONBLE SUPREME COURT IN CIT V. M/S CONTAINER CORPORATION OF INDIA LTD. (CA NO. 8900 OF 2012). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE CASE OF M/S CONTAINER CORPORATION OF INDIA LTD. (SUPRA), THE OPERATING ACTIVITIES OF THE ASSESSEE WERE MAINLY CARRIED OUT AT ITS INLAND CONTAINER DEPOTS (ICDS), CONTAINER FREIGHT STATIONS (CFSS) AND PORT SIDE CONTAINER TERMINALS (PSCTS) SPREAD ALL OVER THE COUNTRY. THE ISSUE IN THE ABOVE APPEAL WAS WITH REGARD T O THE DEDUCTION CLAIMED U/S 80IA ON THE PROFITS EARNED FROM ICDS AND ON ROLLING STOCKS. THEIR LORDSHIPS OF THE HONBLE SUPREME COURT, DISMISSING THE APPEAL FILED BY THE REVENUE, HELD AS UNDER : 21. MOVING FURTHER TO THE ISSUE WHETHER THE ICDS CAN BE TERM ED AS INLAND PORTS SO AS TO ENTITLE DEDUCTION UNDER SECTION 80 - IA OF THE IT ACT. THE TERM PORT, IN COMMERCIAL TERMS, IS A PLACE WHERE VESSELS ARE IN A HABIT OF LOADING AND UNLOADING GOODS. THE TERM 'PORT' AS IS USED IN THE EXPLANATION ATTACHED TO SECTION 8 0 - IA(4) SEEMS TO HAVE MARITIME CONNOTATION PERHAPS THAT IS THE REASON WHY THE WORD AIRPORT IS FOUND SEPARATELY IN THE EXPLANATION. M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 4 CONSIDERING THE NATURE OF WORK THAT IS PERFORMED AT ICDS, THEY CANNOT BE TERMED AS PORTS. HOWEVER, TAKING INTO CONSIDERATION THE FACT THAT A PART OF ACTIVITIES THAT ARE CARRIED OUT AT PORTS SUCH AS CUSTOM CLEARANCE ARE ALSO CARRIED OUT AT THESE ICDS, THE CLAIM OF THE RESPONDENT HEREIN CAN BE CONSIDERED WITHIN THE TERM 'INLAND PORT' AS IS USED IN THE EXPLANATION. IT IS SIGNIFICAN T TO NOTE THAT THE WORD 'INLAND CONTAINER DEPOTS' WAS FIRST INTRODUCED IN THE DEFINITION OF 'CUSTOMS PORT' AS IS GIVEN IN SECTION 2(12) OF THE CUSTOMS ACT, 1962, THROUGH AMENDMENT MADE BY THE FINANCE ACT, 1983 WITH EFFECT FROM 13.05.1983. 22. THE TERM 'INL AND PORT' HAS BEEN DEFINED NOWHERE. BUT THE NOTIFICATION THAT HAS BEEN ISSUED BY THE CENTRAL BOARD OF EXCISE & CUSTOMS (CBEC) DATED 24.04.2007 IN TERMS HOLDS THAT CONSIDERING THE NATURE OF WORK CARRIED OUT AT THESE ICDS THEY CAN BE TERMED AS INLAND PORTS. FURTHER, THE COMMUNICATION DATED 25.05.2009 ISSUED ON BEHALF OF THE MINISTRY OF COMMERCE AND INDUSTRY CONFIRMING THAT THE ICDS ARE INLAND PORTS, FORTIFIES THE CLAIM OF THE RESPONDENT HEREIN. THOUGH BOTH THE NOTIFICATION AND COMMUNICATION ARE NOT BINDING ON CBDT TO DECIDE WHETHER ICDS CAN BE TERMED AS INLAND PORTS WITHIN THE MEANING OF SECTION 80 - IA OF THE IT ACT, THE APPELLANT HEREIN IS UNABLE TO PUT FORWARD ANY REASONABLE EXPLANATION AS TO WHY THESE NOTIFICATIONS AND COMMUNICATION SHOULD NOT BE RELIED TO H OLD ICDS AS INLAND PORTS. UNLESS SHOWN OTHERWISE, IT CANNOT BE HELD THAT THE TERM 'INLAND PORTS' IS USED DIFFERENTLY UNDER SECTION 80 - IA OF THE IT ACT. ALL THESE FACTS TAKEN TOGETHER CLEAR THE POSITION BEYOND ANY DOUBT THAT THE ICDS ARE INLAND PORTS AND SU BJECT TO THE PROVISIONS OF THE SECTION AND DEDUCTION CAN BE CLAIMED FOR THE INCOME EARNED OUT OF THESE DEPOTS. HOWEVER, THE ACTUAL COMPUTATION IS TO BE MADE IN ACCORDANCE WITH THE DIFFERENT NOTIFICATIONS ISSUED BY THE CUSTOMS DEPARTMENT WITH REGARD TO DIFF ERENT ICDS LOCATED AT DIFFERENT PLACES. M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 5 23. IN LIGHT OF THE FORGOING DISCUSSION, WE ARE OF THE VIEW THAT JUDGMENT OF THE HIGH COURT DOES NOT CALL FOR ANY INTERFERENCE AND, HENCE, THE APPEAL IS ACCORDINGLY DISMISSED. 6.1 FACTS BEING IDENTICAL, WE FOLLOW THE ABOVE DECISION AND DISMISS THE 1 ST GROUND OF APPEAL. 7. THE 2 ND GROUND OF APPEAL ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF EXPENSES ATTRIBUTABLE TO EXEMPT INCOM E OF RS.34,22,336/ - AND RESTRICTING IT TO RS.2,27,480/ - U/S 14A R.W.R. 8D OF THE ACT DESPITE THE FACT THAT THE PROVISIONS OF SECTION 14A IS OBLIGATORY AND THE DISALLOWANCE WAS REQUIRED TO BE COMPUTED AS MANDATED IN RULE 8D OF THE IT RULES 1962. 8. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS CLAIMED EXEMPTION OF DIVIDEND INCOME OF RS.6,94,17,102/ - . THE AO OBSERVED THAT THE ASSESSEE HAD NOT MADE ANY DISALLOWANCE U/S 14A OF THE ACT. IN RESPONSE TO A QUERY RAISED BY THE AO TO SHOW CAUSE AS TO WHY DIS ALLOWANCE U/S 14A R.W. RULE 8D SHOULD NOT BE MADE, THE ASSESSEE VIDE LETTER DATED 06.11.2015 SUBMITTED THAT THE INVESTMENT HAD BEEN MADE IN EQUITY SHARES OF SUBSIDIARY COMPANIES AND NO EXPENDITURE WAS INCURRED. FURTHER IT WAS SUBMITTED BEFORE THE AO THAT T HE ASSESSEE HAD SHARE CAPITAL AND RESERVES OF RS.116,51,73,816/ - AS ON 31.03.2013 WHEREAS THE TOTAL INVESTMENT IN SUBSIDIARY AND IN MUTUAL FUNDS WAS RS.41,37,91,435/ - . RELYING ON THE DECISION IN CIT V. HDFC BANKS LTD. (ITA NO. 330 OF 2012) DATED 23.07.2014 , RELIANCE UTILITIES & POWER LTD . 313 ITR 340 (BOM), IT WAS SUBMITTED THAT OWN FUND BEING MORE THAN INVESTMENT, NO DISALLOWANCE UNDER RULE 8D(2)(II) IS CALLED FOR. M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 6 HOWEVER, THE AO WAS NOT CONVINCED WITH THE ABOVE EXPLANATION OF THE ASSESSEE AND CALCULATED THE DISALLOWANCE UNDER RULE 8D AT RS.34,22,336/ - . THE BREAK UP SUCH DISALLOWANCE IS RS.18,05,184/ - UNDER RULE 8D(2)(II) AND RS.16,17,152/ - UNDER RULE 8D(2)(III). 9. IN APPEAL, THE LD. CIT(A) DIRECTED THE AO TO FOLLOW THE ORDER DATED 04.08.2016 OF THE ITA T IN ASSESSEES OWN CASE IN ITA NO. 6110 & 6111/MUM/2014 AND RECALCULATE THE DISALLOWABLE EXPENDITURE, AFTER CONSIDERING THE SUO MOTU DISALLOWANCE OF RS.2,27,489/ - MADE BY THE ASSESSEE. 10. BEFORE US, THE LD. DR RELIES ON THE ORDER OF THE AO. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSEE RELIES ON THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY 2010 - 11, AY 2011 - 12 AND AY 2012 - 13. ALSO THE LD. COUNSEL FILES A COMPUTATION OF WO RKING OF DISALLOWANCE U/S 14A R.W. RULE 8D(2)(III) WHICH IS AS UNDER: PARTICULARS CLOSING INVESTMENTS AS ON 31.03.2012 CLOSING INVESTMENTS AS ON 31.03.2013 TOTAL INVESTMENT (REF PG NO. 5 OF PAPER BOOK) (CURRENT INVESTMENT & NON CURRENT INVESTMENT 23,30,69,473/ - 41,37,91,435 LESS : INVESTMENT IN MUTUAL FUNDS FROM WHICH ON EXEMPT INCOME IS EARNED (GROWTH FUNDS) - 21,12,19,947 INVESTMENTS ON WHICH RULE 8D(2)(III) IS TO BE APPLIED 23,30,69,473 20,25,71,488 AVERAGE VALUE OF INVESTMENTS RS.21,78,20,480 0.5% OF AVERAGE VALUE OF INVESTMENTS RS.10,89,102 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN RESPECT OF THE DISALLOWANCE UNDER RULE 8D(2)(II), M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 7 WE FIND FROM AUDITED ACCOUNTS THAT THE ASSESSEE H AD MORE OWN FUNDS THAN INVESTMENTS. THEREFORE, FOLLOWING THE DECISION IN HDFC BANKS LTD. (SUPRA) AND RELIANCE UTILITIES & POWER LTD. (SUPRA) THE DISALLOWANCE OF RS. 18,05,184 / - MADE BY THE AO UNDER RULE 8D(2)(II) IS DELETED. 11.1 REGARDING THE DISALLOWANCE OF RS.16,17,152/ - MADE BY THE AO UNDER RULE 8D(2)(III), WE MAY REFER HERE TO THE LATEST DECISION OF THE ITAT D BENCH, MUMBAI IN ASSESSEES OWN CASE FOR AY 2012 - 13 (ITA NO. 5606/MUM/2016) WHICH READS AS UNDER: 15. AS REGARDS THE DISALLOWANCE U/S. 8D(2)( III), IT IS NOTED THAT EARLIER THE ASSESSEE HAS NOT PRESSED THIS ISSUE AND, HENCE, THE ADDITION @ 0.5% OF THE AVERAGE VALUE OF THE INVESTMENT WAS CONFIRMED BY THE ITAT IN THE EARLIER YEAR. NOW, THE LD. COUNSEL OF THE ASSESSEE HAS PRAYED THAT THE ASSESSEE N EEDS TO BE GRANTED RELIEF IN THIS REGARD WITH REFERENCE TO THE DECISION OF THE ITAT SPECIAL BENCH IN THE CASE OF ACIT VS. VIREET INVESTMENT P. LTD. VIDE ORDER DATED 16.06.2017, WHEREIN IT WAS EXPOUNDED THAT THE INVESTMENT WHICH DID NOT YIELD EXEMPT INCOME SHOULD NOT ENTER INTO THE COMPUTATION WHILE ARRIVING AT THE AVERAGE VALUE OF INVESTMENT. THE INFERENCE HENCE IS THAT THE DISALLOWANCE U/S. 8D(2)(III) SHOULD BE MADE ONLY WITH REFERENCE TO THE INVESTMENT WHICH EARNED EXEMPT INCOME. HENCE, THE LD. COUNSEL OF THE ASSESSEE PLEADED THAT WHILE MAKING THE DISALLOWANCE IN THIS REGARD, THE RATIO FROM THE SPECIAL BENCH DECISION SHOULD BE FOLLOWED. 16. UPON CAREFUL CONSIDERATION, WE FIND OURSELVES IN AGREEMENT WITH THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE. WE DIRECT THE ASSESSING OFFICER TO MAKE THE COMPUTATION OF DISALLOWANCE U/S. 8D(2)(III) OF THE ACT BY EXCLUDING THE INVESTMENT WHICH HAVE NOT EARNED ANY EXEMPT INCOME DURING THE YEAR IN THE COMPUTATION IN ACCORDANCE WITH THE AFORE - SAID SPECIAL BENCH DECISI ON. FACTS BEING IDENTICAL, WE DIRECT THE AO PASS A FRESH ORDER BY FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL, AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT THE ASSESSEE TO FILE M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 8 THE RELEVANT DOCUMENTS/EVIDENCE AND THE ABOVE WORKING OF DISALLOWANCE BEFORE THE AO. THUS THE 2 ND GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. 13. NOW WE DEAL WITH THE CROSS OBJECTION FILED BY THE ASSESSEE. THE 1 ST GROUND IS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN PARTLY CONFIRMING THE DISALLOWANCE THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE ACT R.W.R. 8D OF INCOME TAX RULES. 14. IN VIEW OF OUR DECISION AT PARA 11 HEREINBEFORE, THE ABOVE GROUND BECOMES INFRUCTUOUS. 15. THE 2 ND GROUND OF CROSS OBJECTION : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN MAKING DISALLOWANCE UNDER SECTION 14A OF THE ACT R.W.R. 8D OF THE INCOME TAX RULES WHILE CALCULATING BOOK PROFIT U/S 115JB OF THE ACT. 16. IN THE CASE OF ACIT V. VIREET INVESTM ENT [2017] 82 TAXMANN.COM415 (DELHI - TRIB.) (SB ), IT IS HELD THAT COMPUTATION UNDER CLAUSE (F) OF EX PLANATION 1 TO SECTION 115JB(2) IS TO BE MADE WITHOUT RESORTING TO COMPUTATION AS CONTEMPLATED UNDER SECTION 14A READ WITH RULE 8D. ACCORDINGLY, WE DELETE THE DISALLOWANCE OF RS.34,22,236/ - MADE BY THE AO TO THE BOOK PROFIT SHOWN BY THE ASSESSEE U/S 115JB OF THE ACT. 17. THE 3 RD GROUND OF CROSS OBJECTION : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE MADE BY ASSESSING OFFICER OF FACILITY USAGE M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 9 CHARGES OF RS.8,93,000/ - WHILE COMPUTING DEDUCTION UNDER SECTION 8IA AND THUS REDUCING THE ASSESSEES CLAIM UNDER SECTION 80IA BY RS.8,93,000/ - . 18. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD SHOWN RENTAL INCOME FROM IMMOVABLE PROPERTY AMOUNTING TO RS.8,93,000/ - . THE ASSESSEE HAD INCLUDED THE ABOVE AMOUNT IN PROFIT AND GAINS FROM BUSINESS WHILE COMPUTING DEDUCTION U/S 80IA. IN RESPONSE TO A QUERY RAISED BY THE AO TO JUST IFY THE ABOVE CLAIM OF INCLUDING THIS INCOME FOR COMPUTING DEDUCTION U/S 80IA, THE ASSESSEE FILED A REPLY DATED 26.11.2015 WHICH IS AS UNDER: AS REGARDS REVENUE FROM OPERATIONS WE SUBMIT THAT REVENUE FROM SALE OF SERVICE AND OTHER OPERATING REVENUE ARE F ULLY DERIVED FROM CFS ACTIVITIES AND THEREFORE ARE ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80IA OF THE ACT. FURTHER, AS REGARDS OTHER INCOME WE SUBMIT THAT, MOBILE TOWER RENT RS.2,00,000/ - AND SERVICE CHARGES FOR PROVIDING OFFICE SPACE & UTILITY FACILITIES RS .6,93,000/ - ARE FULLY DERIVED FROM CFS ACTIVITIES AND THEREFORE ARE ELIGIBLE FOR CLAIM DEDUCTION U/S 80IA OF THE ACT. HOWEVER, THE AO WAS NOT CONVINCED WITH THE ABOVE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT IT HAD EARNED THE ABOVE INCOME OF RS.8,93 ,000/ - BY LETTING OUT SPACE AND UTILITY FACILITY. AS PER THE AO , IF THE RENTAL INCOME IS CONSTRUED TO BE A PART OF THE BUSINESS INCOME, IT WOULD BE DEFYING THE VERY BASIC TENET OF SECTION 80IA WHICH CONFERS SPECIFIC BENEFIT IN THE FORM OF DEDUCTION OF BUSI NESS INCOME, EARNED FROM THE ELIGIBLE INDUSTRIAL UNDERTAKING. THE AO RELYING ON THE DECISION IN CIT V. SWANI SPICE MILLS PVT. LTD. (2011) 332 ITR 288 (BOM), PANDIAN CHEMICALS LTD. V. CIT (2003) 129 TAXMAN 539 (SC) DENIED THE CLAIM OF RENTING OF SPACE AND FACILITY USAGE CHARGES FOR DEDUCTION U/S 80IA OF THE ACT. M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 10 19. IN APPEAL, THE LD. CIT(A) FOLLOWING HIS ORDER OF THE AY 2012 - 13, CONFIRMED THE DISALLOWANCE OF RS.8,93,000/ - MADE BY THE AO. 20. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE FILES A COPY OF THE D ECISION IN CIT V. MEGHALAYA STEELS LTD . (2016) 383 ITR 217 (SC) AND SUBMITS THAT THE REVENUE FROM SALE OF SERVICES AND OTHER OPERATING REVENUE ARE FULLY DERIVED FROM CFS ACTIVITIES AND ARE THUS ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80IA OF THE ACT. ON THE OTHER HAND, THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 21. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE CASE OF MEGHALAYA STEEL LTD . (SUPRA), THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURE OF STEEL AND FERRO SILICON. FOR THE YEAR 2004 - 05, IT CLAIMED DEDUCTION U/S 80IB ON THE PROFITS AND GAINS OF ITS INDUSTRIAL UNDERTAKING WHICH INCLUDED TRANSPORT SUBSIDY, INTEREST SUBSIDY AND POWER SUBSIDY RECEIVED FROM THE GOVERNMENT. THE AO HELD THAT THE A MOUNTS RECEIVED BY THE ASSESSEE AS SUBSIDIES DID NOT QUALIFY FOR DEDUCTION U/S 80IB(4) OF THE ACT. THE HONBLE SUPREME COURT, DISMISSING THE APPEAL FILED BY THE REVENUE, HELD THAT AS ALL THE FOUR SUBSIDIES WERE REVENUE RECEIPTS, WHICH WERE REIMBURSED TO TH E ASSESSEE FOR ELEMENTS OF COST RELATING TO MANUFACTURE OR SALE OF THEIR PRODUCTS, THERE COULD CERTAINLY BE SAID TO BE A DIRECT NEXUS BETWEEN PROFITS AND GAINS OF THE INDUSTRIAL UNDERTAKING OR BUSINESS, AND REIMBURSEMENT OF SUCH SUBSIDIES. IT HELD THAT THE SUBSIDIES WERE ONLY IN ORDER TO REIMBURSE, WHOLLY OR PARTIALLY, COSTS M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 11 ACTUALLY INCURRED BY THE ASSESSEE IN THE MANUFACTURING AND SELLING OF ITS PRODUCTS. IN THE INSTANT CASE, THE ASSESSEE HAS RECEIVED RS.2,00,000/ - AS RENT FROM VODAFONE INDIA PVT. LTD ON ACCOUNT OF USAGE OF ITS CFS AREA FOR SETTING UP MOBILE TOWER. IT ALSO RECEIVED RS. 6,93,000/ - AS SERVICE CHARGES FOR PROVIDING OFFICE SPACE AREA, FURNITURE & UTILITY FACILITY TO CUSTOMERS IN CFS AREA. IN THE INSTANT CASE, WE FIND THAT THE ASSESSEE HAS NOT FILED BEFORE THE AO THE RELEVANT CONTRACTS AND CONNECTED DATA WITH REGARD TO THE ABOVE CLAIM. THEREFORE , WE RESTORE THE MATTER TO THE FILE OF THE AO FOR MAKING AN ORDER AFRESH AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIREC T THE ASSESSEE TO FILE THE CONNECTED DOCUMENTS/EVIDENCE BEFORE THE AO. 22. IN THE RESULT, THE CROSS OBJECTION IS PARTLY ALLOWED. 23. TO SUM UP, THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/01/2019. SD/ - SD/ - ( C.N. PRASAD ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 25/01/2019 RAHUL SHARMA, SR. P.S. M/S AMEYA LOGISTICS ITA NO. 492/MUM/2017 & C.O. NO. 119/MUM/2018 12 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// ( SR. PRIVATE SECRETARY ) ITAT, MUMBAI