DEPUTY COMMISSIONER OF INCOME TAX - CENTRAL CIRCLE 1(2), MUMBAI V. JWC LOGISTICS PARK PRIVATE LIMITED, MUMBAI

ITA 575/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3168 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 31-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJIV GUBGOTRA
• Section: 11; 143(3); 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI C.N. PRASAD ( J M) & SHRI O.P. MEENA (A M) I.T.A. NO. 575 /MUM/20 1 8 (ASSESSMENT YEAR 20 0 9 - 1 0 ) DCIT, CC - 1(2) ROOM NO. 906 9 TH FLOOR OLD CGO BUILDING ANNEXE, M.K. ROAD MUMBAI - 400 020. VS. M/S. JWC LOGISTICS PARK PVT. LIMITED SHOP NO. 8 TO 11 1 ST FLOOR, VAIBHAV APARTMENT, SAHAR PIPE LINE ROAD, SAHAR ANDHERI EAST MUMBAI - 400 069. PAN : AABCJ4231E ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI SATISH MODI DEPARTMENT BY SHRI RAJIV GUBGO TRA DATE OF HEARING 11 . 2 . 201 9 DATE OF PRONOUNCEMENT 13 . 2 . 201 9 O R D E R PER O.P . MEENA (AM) : - THIS APPEAL BY THE REVENUE IS FILED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 47 MUMBAI [IN SHORT CIT(A)] DATED 1.11.2017 FOR A.Y. 2009 - 10 WHICH IN TURN ARISEN FROM THE ASSESSMENT ORDER PASSED U/S. 143(3) READ WITH SECTION 153C DATED 28.3.2015 OF INCOME TAX ACT (THE ACT) BY ACIT, CENTRAL CIRCLE - 2, MUMBAI (HEREINAFTER REFERRED AS THE AO ). 2. GROUND NO. (I) STATES THAT ON THE FA CTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LEARNED CIT(A) ERRED IN ALLOWING CLAIM OF DEDUCTION U/S. 80IA(4) OF RS. 18,98,947/ - ON ACCOUNT OF FDR INTEREST, SCRAP SALES AND EDI CHARGES WITHOUT APPRECIATING THAT THESE INCOMES CANNOT BE SAID TO BE DER IVED FROM THE BUSINESS ACTIVITY OF THE ASSESSEE OF RUNNI NG A CONTAINER FREIGHT STATION. M/S. JWC LOGISTICS PARK PVT. LIMITED 2 3. B RIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE RUNS A CONTAINER FREIGHT STATION (CFS) AT PANVEL, WHICH IS AN INFRASTRUCTURE FACILITY, SET UP UNDER APPROVALS RECEIVED FROM THE MINISTRY OF COMMERCE, NEW DELHI AND THE CUSTOMS AUTHORITIES AT JNPT. THE ASSESSEE IS AUTHORIZED TO CLEAR GOODS FOR IMPORT/EXPORT, WAREHOUSING, RE - EXPORT, PACKING/UNPACKING AND TEMPORARY STORAGE FOR ONWARD TRANSIT TO THE JNPT PORT. THE CF S IS AN INFRASTRUCTURE FACILITY U/S. 80IA WHICH INCLUDES AN INLAND PORT AND AN INLAND CONTAINER DEPOT AS SET UP BY THE ASSESSEE. THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IA(4) OF RS.2,12,70,097/ - . THE ASSESSING OFFICER NOTICED FROM THE DETAILS FILED BY THE ASSESSEE THAT IT HAS CREDITED OTHER INCOME AMOUNTING TO RS.18,98,947/ - IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER WAS OF THE VIEW THAT AS PER PROVISIONS OF SECTION 80IA(4), DEDUCTION IS ELIGIBLE FOR AN UNDERTAKING WHO DERIVED INCOME FROM BUS INESS OF SUCH UNDERTAKING. THEREFORE , THE OTHER INCOME RECEIVED BY THE ASSESSEE IS ATTRIBUTABLE TO THE BUSINESS OF THE ASSESSEE - COMPANY BUT THE SAME CANNOT BE SAID TO BE DERIVED FROM RUNNING A CONTAINER STATION. THEREFORE , BY PLACING RELIANCE IN THE CASE OF CIT VS. STERLING FOODS 237 ITR 579 (SC), THE ASSESSING OFFICER HELD THAT INTEREST RECEIVED, THOUGH INCIDENTAL TO THE BUSINESS ACTIVITY OF THE ASSESSEE CANNOT BE HELD AS DERIVED FROM INDUSTRIAL UNDERTAKING. THEREFORE, OTHER INCOME RECEIVED OF RS. 18,98,9 47/ - CONSISTING OF INTEREST MARGIN MONEY FOR BG/BOND, SCRAP SALES AND EDI CHARGES IS NOT ELIGIBLE FOR DED UCTION U/S. 80IA(4) OF THE ACT. 4. BEING AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSE SSING OFFICER. 5. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ITAT IN ASSESSEES OWN CASE IN ITA NO. 4466/MUM/2017 DATED 31.12.2018 BY WHICH OTHER INCOME EXCEPT INCOME OF RS. 91,254/ - BEING INTERES T ON MARGIN MONEY . THEREFORE, THIS IS NOT ALLOWABLE AS DEDUCTION AND BE DECIDED AGAINST THE ASSESSEE AND THE REMAINING AMOUNT IS ELIGIBLE FOR DEDUCTION U/S. 80IA(4) OF THE ACT. M/S. JWC LOGISTICS PARK PVT. LIMITED 3 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECO RD. WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION IN ASSESSEES OWN CASE BY THE TRIBUNAL CITED (SUPRA) WHEREIN FOLLOWING THE DECISION OF HON`BLE BOMBAY HIGH COURT DEDUCTION HAS BEEN ALLOWED . HOWEVER, AS RIGHTLY ADMITTED BY LE ARNED COUNSEL FOR THE ASSESSEE THAT A SUM OF RS. 91,254/ - BEING INTEREST ON MARGIN MONEY IS NOT ELIGIBLE FOR DEDUCTION U/S. 80IA(4) OF THE ACT . ACCORDINGLY, DECISION OF LEARNED CIT(A) IS MODIFIED TO THIS EXTENT AND BALANCE REMAINING AMOUNT IS HELD TO BE ALL OWABLE AS DEDUCTION U/S. 80IA(4) OF THE ACT. IN VIEW OF THIS FACT, THIS GROUND O F REVENUE IS PARTLY ALLOWED. 7. GROUND NO. (II), (III) & (IV) FILED BY THE REVENUE ARE AS UNDER : - (II) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN ALLOWING THE DEDUCTION OF RS. 1,93,71,1 50/ - U/S 80I A(4) OF THE I.T. ACT, 1961 ON THE PROFIT EARNED FROM THE OPERATION OF A INLAND CONTAINER DEPOT (ICD) TREATING THAT AS AN INFRASTRUCTURE FACILITY BEING 'INLAND PORT' WITHOUT APPRECI ATING THAT CBDT'S CLARIFICATION ISSUED VIDE LETTER NO. F.NO. 178/42/2O1O - ITA - I DATED O6.O1.2O11 STATES CLEARLY THAT INLAND CONTAINER DEPOT/CONTAINER FREIGHT STATION ARE NOT PORTS LOCATED ON ANY INLAND WATERWAY, RIVER OR CANAL AND THEREFORE THAT CANNOT BE C LASSIFIED AS INLAND PORT FOR THE PURPOSE OF SECTION 8OIA(4)(I).' ( II I) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED ALLOWING THE DEDUCTION OF RS. 1,93,71,15 O/ - U/S 8OIA(4) OF THE I.T. ACT, 1961 ON THE PROF IT EARNED FROM THE OPERATION OF A INLAND CONTAINER DEPOT (ICD) WITHOUT APPRECIATING THAT THE BENEFIT OF DEDUCTION UNDER THE SAID SECTION IS NOT AT ALL INTENDED TO ANY INLAND CONTAINER DEPOT/CONTAINER FREIGHT STATION; AND EVEN OTHERWISE FOR BEING ELIGIBLE T O ANY SUCH DEDUCTION, THERE OUGHT TO BE AN AGREEMENT EXECUTED BETWEEN THE ASSESSEE COMPANY AND THE GOVERNMENT FOR DEVELOPING, OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY WHEREAS THERE IS NO SUCH AGREEMENT.' (IV) 'ON THE FACTS AND IN THE C IRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN ALLOWING THE DEDUCTI ON OF RS. 1,93,71,15O/ - U/S 80I A(4) OF THE I.T. ACT, 1961 ON THE PROFIT EARNED FROM THE OPERATION OF A INLAND CONTAINER DEPOT (ICD) WITHOUT APPRECIATING THAT THE LICENSE W HICH WAS ISSUED BY DIRECTOR, INFRASTRUCTURE DIVISION, DEPARTMENT OF COMMERCE DATED 24.11.2OO4, DIRECTOR, CUSTOM CBEC DEPARTMENT OF REVENUE DATED 24.O3.2OO9 ARE WITH REFERENCE TO THE REQUEST MADE BY M/S. JWC LOGISTICS PARK PVT. LIMITED 4 THE ASSESSEE FOR CONSTRUCTING ICD/CFS AND THAT SUCH LICENS E CANNOT BE CONSIDERED TO BE A REQUIRED AGREEMENT BETWEEN THE ASSESSEE COMPANY AND THE GOVERNMENT AS PROVIDED IN SUB CLAUSE (B) OF SECTION 8OIA(4)(I) OF THE I.T. ACT, 1961.' 8. LEARNED DR FOR THE REVENUE HAS HEAVILY PLACED RELIANCE ON THE DECISION OF ASSESSI NG OFFICER . 9. P ER CONTRA , LEARNED COUNSEL SUBMITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF ITAT FOR A.Y. 2008 - 09 IN ITA NO. 4466/MUM/2017 DATED 31.12.2018 , WHEREIN FOLLOWING THE JUDGEMENT OF HON'BLE HON'BLE JURISDICTIONAL HIGH COURT OF BOMBAY, THESE G ROUNDS ARE ALLOWED IN FAVOUR OF THE ASSESSEE. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THIS ISSUE IN GROUND NO. (II), (III) & (IV) RELATES TO DEDUCTION OF RS. 1,93,71,150/ - U/S. 80IA(4) OF THE ACT ON THE PROFIT EARNED FROM THE OPERATION OF A INLAND CONTAINER DEPOT (ICD) TREATING THAT AS AN INFRASTRUCTURE FACILITY BEING INLAND PORT WHICH ARE COMMON, HENCE BEING CONSIDERED TOGETHER. IT IS SEEN THAT THE ASSESSEE COMPANY WAS OPERATING CONTAINER FREIGHT STATION AT J NPT WHICH ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE HAS NOT ENTERED INTO AN AGREEMENT WITH THE CENTRAL GOVERNMENT/STATE GOVERNMENT/ LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR DEVELOPING/OPERATING AND MAINTAINING NEW INFRASTRUCTURE FACILITY. TH EREFORE THE CLAIM WAS DISA LLOWED U/S. 80IA(4) OF THE ACT. HOWEVER, LEARNED CIT(A) HAS ALLOWED THE RELIEF ON THE BASIS OF DECISION OF THE ITAT IN ASSESSEES OWN CASE AS WELL AS HON'BLE BOMBAY HIGH COURT. WE OBSERVED THAT THIS ISSUE IS SQUARELY COVERED IN FA VOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT DATED 31.12.2018 IN ASSESSEES OWN CASE . RELEVANT PARA NUMBER 6 REPRODUCED AS UNDER : - 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORDS. WE FIND THAT THE ISSUE HAS BEEN D ECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE. THE QUESTION BEFORE THE HONBLE HIGH COURT WAS THE FOLLOWING: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE INCOME TAX APPELLATE TRIBUNAL WAS JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION U/S 80IA MADE BY THE ASSESSEE? THE HONBLE HIGH COURT HELD AS UNDER: 3. THE IMPUGNED ORDER OF THE TRIBUNAL DISMISSED M/S. JWC LOGISTICS PARK PVT. LIMITED 5 THE REVENUE'S APPEAL BEFORE IT BY HOLDING THAT THE CONTAINER FREIGHT STATION (C FS) RUN BY THE RESPONDENT ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA OF THE ACT AS AN INFRASTRUCTURE FACILITY. THUS, UPHOLDING THE VIEW OF THE COMMISSIONER OF INCOME - TAX APPEALS (CIT (A)). THIS BY FOLLOWING THE DECISIONS OF THE SPECIAL BENCH OF THE TRIBUNAL IN M/S. ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (ITA NO.5018 TO 5022 AND 5059) RENDERED ON 6TH JULY, 2012 AND THE DECISION OF THE REGULAR BENCH OF THE TRIBUNAL IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) VS. ACIT (ITA NO. 7055/MUM/2011) DATED 31ST AUGUST, 2012. THE SUBMISSION OF THE REVENUE THAT AS APPEALS HAVE BEEN FILED AGAINST THE AFORESAID TWO DECISIONS OF THE TRIBUNAL, BEFORE THIS COURT, THE REVENUE'S APPEAL BE ALLOWED WAS NOT ACCEPTED BY THE TRIBUNAL. IN THE MEANTIME , THE ABOVE TWO TRIBUNAL DECISIONS IN CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA) AND CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) (SUPRA) HAVE BEEN UPHELD BY THIS COURT IN COMMISSIONER OF INCOME TAX V. 1. CONTINENTAL WAREHOUSING CORPORATION (NHAV A SHEVA) LTD. AND ANR. [2015] 374 ITR 645 (BOM) WHILE DISMISSING THE REVENUE'S APPEAL. THIS ISSUE THEREFORE STANDS CONCLUDED IN FAVOUR OF THE RESPONDENT ASSESSEE. 6.1 FACTS BEING IDENTICAL, WE FOLLOW THE ABOVE DECISION OF THE HONBLE BOMBAY HIGH COURT A ND UPHOLD THE ORDER OF THE LD. CIT(A). 11. THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL AS WELL AS HON'BLE HIGH COURT, THIS ISSUE ON THE ABOVE SAID GROUND NOS. (II) TO (IV) ARE DISMISSED. 12. IN THE RESULT, APPEAL FILED BY THE REVENUE IS PA RTLY ALLOWED. 13. ORDER HAS BE E N PRONOUNCED IN THE COURT ON 13 . 2 .201 9 . SD/ - SD/ - (C.N.PRASAD ) (O.P. MEENA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 13 / 2 / 20 1 9 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// ( SENIOR PRIVATE SECRETARY ) PS ITAT, MUMB AI