Sattva CFS & Logistics P. Ltd., CHENNAI V. Principal CIT, CHENNAI

ITA 701/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8274 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYARAM RAIPURA
• Assessee Lawyers: R RAJAGOPALAKRISHNAN
• Keywords: Capital receipt
• Section: 263; 63

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.701/MDS/2015 ( )( / ASSESSMENT YEAR : 2010-11 M/S SATTVA CFS AND LOGISTICS PVT. LTD., NO.153, HIGH GATE LEVEL 4, SANTHOME HIGH ROAD, R.A.PURAM, CHENNAI - 600 028. PAN : AAJCS 5251 M V. THE PRINCIPAL COMMISSIONER OF INCOME TAX, CHENNAI-VI, CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH.R. RAJAGOPALAKRISHNAN, CA -.+, / 0 / RESPONDENT BY : SH. JAYARAM RAIPURA, CIT 1 / 2% / DATE OF HEARING : 16.12.2015 3') / 2% / DATE OF PRONOUNCEMENT : 01.01.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX-6, CHENNAI , DATED 18.03.2015 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2 I.T.A. NO.701/MDS/15 2. SH.R. RAJAGOPALAKRISHNAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSING OFFICER ALLO WED DEDUCTION UNDER SECTION 80-IA OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') BY TREATING THE CONTAINER FREIGHT STATION AS INFRAS TRUCTURE FACILITY. HOWEVER, THE PRINCIPAL COMMISSIONER FOUND THAT CONT AINER FREIGHT STATION COULD NOT BE TREATED AS INFRASTRUCTURE FACI LITY, HENCE THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80-IA OF THE ACT. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE ASSESSEE BROUGHT TO THE NOTICE OF PRINCIPAL COMMISSIONER THE JUDGMENT OF MADRAS HIGH COURT IN CIT V. AL. LOGISTICS PVT. LTD. DATED 23.12.2014 AND THE JUDGMENT OF DELHI HIGH COURT IN CONTAINER C ORPORATION OF INDIA V. ACIT DATED 11.05.2012. THE PRINCIPAL COMM ISSIONER FOUND THAT THE ABOVE SAID JUDGMENTS OF DELHI HIGH COURT A ND MADRAS HIGH COURT ARE VERY MUCH APPLICABLE TO THE FACTS OF THE PRESENT CASE. HOWEVER, HE FAILED TO FOLLOW THE SAME ONLY FOR THE REASON THAT AN SLP HAS BEEN FILED BEFORE THE APEX COURT. ACCORDIN G TO THE LD. REPRESENTATIVE, MERE PENDENCY OF SLP BEFORE APEX CO URT AGAINST THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CA SE OF AL. LOGISTICS PVT. LTD. (SUPRA) CANNOT BE A REASON FOR NOT FOLLOW ING THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT. ON A QUERY FROM BENCH WHAT HAPPENED TO THE INTEREST TO THE EXTENT OF ` 3,18,077/-, THE LD. 3 I.T.A. NO.701/MDS/15 REPRESENTATIVE CLARIFIED THAT THE INTEREST WAS RECE IVED BY THE ASSESSEE FROM THE FIXED DEPOSIT MADE WITH BANK AND THE ASSESSEE HIMSELF NOT PRESSED BEFORE THE ASSESSING OFFICER, T HEREFORE, THE ASSESSING OFFICER DENIED DEDUCTION UNDER SECTION 80 -IA OF THE ACT. 3. ON THE CONTRARY, SHRI JAYARAM RAIPURA, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT NO DOUBT, THE JUDGME NT OF DELHI HIGH COURT IN CONTAINER CORPORATION OF INDIA (SUPRA) AND THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN AL. LOGISTICS PVT. LTD . (SUPRA) ARE IN FAVOUR OF THE ASSESSEE ON IDENTICAL SET OF FACTS. HOWEVER, THE DEPARTMENT HAS NOT ACCEPTED THE JUDGMENT OF DELHI H IGH COURT AND THE JUDGMENT OF MADRAS HIGH COURT AND AN SLP WAS AL READY FILED WHICH IS PENDING BEFORE THE APEX COURT. THEREFORE, JUST TO KEEP THE MATTER ALIVE, ACCORDING TO THE LD. D.R., THE PRINCI PAL COMMISSIONER HAS RIGHTLY REVISED THE ORDER OF THE ASSESSING OFFI CER IN EXERCISE OF HIS POWER UNDER SECTION 263 OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE JURISDICTIONAL HIGH COURT BY JUDGMENT DATED 23.12.2 014 IN AL. LOGISTICS PVT. LTD. (SUPRA) FOUND THAT THE CONTAINE R FREIGHT STATION IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA OF THE A CT. THIS JUDGMENT 4 I.T.A. NO.701/MDS/15 OF THE JURISDICTIONAL HIGH COURT WAS BROUGHT TO THE NOTICE OF THE PRINCIPAL COMMISSIONER. THE PRINCIPAL COMMISSIONER FOUND THAT THE DEPARTMENT HAS ALREADY FILED AN SLP BEFORE THE APEX COURT, THEREFORE, THE ORDER OF THE ASSESSING OFFICER CAN B E REVISED. THE PRINCIPAL COMMISSIONER, IN FACT, PLACED HIS RELIANC E ON THE JUDGMENT OF THE APEX COURT IN CIT V. G.M. MITTAL STAINLESS S TEEL P. LTD. (2003) 263 ITR 255. 5. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF T HE APEX COURT IN G.M. MITTAL STAINLESS STEEL P. LTD. (SUPRA ). THE APEX COURT NEVER SAID THAT THE COMMISSIONER CAN PROCEED AGAINS T THE JUDGMENT OF THE HIGH COURT. IN FACT, THE APEX COUR T OBSERVED AS FOLLOWS AT PAGE 258 OF ITR AS FOLLOWS:- THE FACT THAT THIS COURT HAD SUBSEQUENTLY REVERSED THE DECISION OF THE HIGH COURT WOULD NOT JUSTIFY THE COMMISSIONER IN TREATING THE ASSESSING OFFICERS DECISION AS ERRONEOUS. THE POWER OF THE COMMISSIONER UNDER SECTION 263 OF THE INCOME-TAX AC T MUST BE EXERCISED ON THE BASIS OF THE MATERIAL THAT WAS AVAILABLE TO HIM WHEN HE EXERCISED THE POWER. AT TH AT TIME, THERE WAS NO DISPUTE THAT THE ISSUE WHETHER T HE POWER SUBSIDY SHOULD BE TREATED AS CAPITAL RECEIPT HAD BEEN CONCLUDED AGAINST THE REVENUE. THE SATISFACTIO N OF THE COMMISSIONER, THEREFORE, WAS BASED ON NO MATERIAL EITHER LEGAL OR FACTUAL WHICH WOULD HAVE G IVEN HIM THE JURISDICTION TO TAKE ACTION UNDER SECTION 2 63 OF THE INCOME-TAX ACT. 5 I.T.A. NO.701/MDS/15 THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE JUDGMENT OF JURISDICTIONAL HIGH COURT IS BINDING ON THE ASSESSI NG OFFICER AS WELL AS THE PRINCIPAL COMMISSIONER. THEREFORE, THE PRIN CIPAL COMMISSIONER CANNOT TAKE A DIFFERENT VIEW OTHER THA N THE ONE TAKEN BY THE JURISDICTIONAL HIGH COURT. MERE PENDENCY OF SLP BEFORE THE APEX COURT CANNOT BE A REASON TO TAKE A DIFFERENT V IEW BY THE PRINCIPAL COMMISSIONER. JUDICIAL DISCIPLINE REQUIR ES THE PRINCIPAL COMMISSIONER TO FOLLOW THE JUDGMENT OF JURISDICTION AL HIGH COURT. IT IS OPEN TO THE DEPARTMENT TO FILE SLP AGAINST THE J UDGMENT OF JURISDICTIONAL HIGH COURT BEFORE THE APEX COURT IN A MANNER KNOWN TO LAW. IT DOES NOT MEAN THAT THE PRINCIPAL COMMIS SIONER CAN VIOLATE OR IGNORE THE JUDGMENT OF MADRAS HIGH COURT UNLESS AND UNTIL IT IS REVERSED BY APEX COURT. IT IS NOBODYS CASE THAT THE JUDGMENT OF MADRAS HIGH COURT IS STAYED BY THE APEX COURT. IN SUCH CIRCUMSTANCES, THE EXERCISE OF POWER UNDER SECTION 263 OF THE ACT BY THE PRINCIPAL COMMISSIONER IS NOT JUSTIFIED. AC CORDINGLY, THE ORDER OF THE PRINCIPAL COMMISSIONER IS QUASHED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 6 I.T.A. NO.701/MDS/15 ORDER PRONOUNCED ON 1 ST JANUARY, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 1 ST JANUARY, 2016. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. PR. CIT-6, CHENNAI-34 5. 79 -2 /DR 6. :( ; /GF.