DCIT, CHENNAI V. M/s. A.S.Shipping Agencies P. Ltd., CHENNAI

ITA 825/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4904 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 14-06-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 31-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Procedural lapse
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI U.B.S. BEDI, J.M. AND SHRI N.S. SAINI, AM .. I.T.A. NOS. 825 & 826/MDS/2010 ASSESSMENT YEARS 2002-03 & 2003-04 THE DY.C.I.T COMPANY CIRCLE-1(1) CHENNAI VS. M/S A.S. SHIPPING AGENCIES P. LTD NEW NO. 113 [OLD NO. 55] ARMENIAN STREET CHENNAI 600 001. (PAN NO. AAACA 2906 N) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. SRIDHAR DEPARTMENT BY : SHRI K.E.B RENGARAJAN O R D E R PER N.S. SAINI:- THESE TWO APPEALS FILED BY THE REVENUE DIRECTED AGA INST THE COMMON ORDER PASSED BY THE LD. CIT[APPEALS]-III, CH ENNAI ALL DATED 19.03.2010 FOR ASSESSMENT YEARS 2002-03 AND 2003-04 RESPECTIVELY. SINCE THE ISSUE INVOLVED IN BOTH THESE APPEALS IS S AME, WE ARE PAGE 2 OF 14 I.T.A. NO. 825 & 826//MDS/2010 DISPOSING THEM OFF BY THIS CONSOLIDATED ORDER FOR T HE SAKE OF BREVITY AND CONVENIENCE. 2. THE SOLE GRIEVANCE RAISED BY THE REVENUE IN BOTH THESE APPEALS FOR ASSESSMENT YEARS UNDER CONSIDERATION IS THAT THE COMMISSIONER OF INCOME-TAX HAS ERRED IN DIRECTING T HE ASSESSING OFFICER TO TREAT THE WAREHOUSING CHARGES AMOUNTING TO RS. 6,08,02,007/- IN ASSESSMENT YEAR 2002-03 AND RS. 4 1,65,148/- IN ASSESSMENT YEAR 2003-04 AS PART OF CONTAINER FREIGH T STATION INCOME ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER HAS OBSERVED IN THE ASSESSMENT ORDER PASSED U/S 154 R.W .S. 254 OF THE INCOME-TAX ACT, 1961 [IN SHORT, THE ACT] DATED 10.0 6.2009 THAT THE CRUX OF THE ISSUE WAS WHETHER THE INCOME EARNED BY THE ASSESSEE THROUGH ITS BONDED WAREHOUSE WOULD TAKE THE CHARACT ER OF INCOME DERIVED FROM CONTAINER FREIGHT STATION ELIGIBLE F OR DEDUCTION U/S 80IA(4) OF THE ACT. HE OBSERVED THAT THE ASSESSEE COMPANY AT NUMBAL VILLAGE NEAR CHENNAI CARRIES ON TWO ACTIVITI ES, NAMELY, OPERATING A CONTAINER FREIGHT STATION AND OPERAT ING A BONDED PAGE 3 OF 14 I.T.A. NO. 825 & 826//MDS/2010 WAREHOUSE. BY PUBLIC NOTICE DATED 28.8.1995, THE COMMISSIONER OF CUSTOMS MADRAS DECLARED U/S 8 OF THE CUSTOMS ACT TH E PREMISES OF THE ASSESSEE AT NUMBAL VILLAGE AS CUSTOMS AREA FO R THE PURPOSE OF EXAMINATION/LOADING AND STUFFING OF EXPORT CARGO IN TO CONTAINERS AND APPOINTED THE ASSESSEE AS CUSTODIANS FOR CARGO AT CONTAINER FREIGHT STATION. THEREAFTER, BY PUBLIC NOTICE NO. 87/96 D ATED 8.5.1996 AND NO. 169/96 DATED 17.10.1996 NO. 68/98 DATED 18.5.19 98, 160/98 DATED 27.8.1998, NO. 241/98 AND 26/99 DATED 16.4.19 99, ADDITIONAL AREAS WERE DECLARED AS CUSTOMS AREA FOR HANDLING IMPORT CARGO AND EXPORT CARGO. 4. SIMILARLY, BY NOTIFICATION NO. 23 DATED 26.9.200 0, 2.1.2001 AND 20.4.2001, TWO COVERED GODOWNS MEASURING 28,539 SQ. FT AND 21.121 SQ. FT AND AN OPEN AREA MEASURING 21,624 SQ. FT WER E NOTIFIED AS PUBLIC BONDED WAREHOUSES U/S 62(1) OF THE CUSTOMS ACT AND THE ASSESSEE WAS APPOINTED AS WAREHOUSE MANAGER OF THE SAID PUBLIC BONDED WAREHOUSE. FROM THE ABOVE, IT IS CLEAR THAT THE CONTAINER FREIGHT STATION OF THE ASSESSEE COMPANY HAD STARTE D ITS OPERATIONS IN THE YEAR 1995 WHEREAS ITS BONDED PUBLIC WAREHOUS E HAS STARTED ITS OPERATION FROM THE YEAR 2000. THEY ARE TWO SEPARAT E FACILITIES PAGE 4 OF 14 I.T.A. NO. 825 & 826//MDS/2010 MEANT FOR TWO DIFFERENT PURPOSES SERVING TWO SEPARA TE CATEGORIES OF CUSTOMERS. WHILE A CONTAINER FREIGHT STATION IS A PLACE WHERE THE CONTAINERS MEANT FOR IMPORT OR EXPORT ARE STUFFED A ND UNSTUFFED AS IN A CUSTOMS AREAS, A BONDED WAREHOUSE, ON THE OTHE R HAND IS A PLACE WHERE THE GOODS AFTER THEIR IMPORT ARE STORED BEFORE PAYMENT OF CUSTOMS DUTY. WHILE BOTH THE CONTAINER FREIGHT STATION AND BONDED WAREHOUSE ARE INFRASTRUCTURAL FACILITIES, ON LY A CONTAINER FREIGHT STATION HAS BEEN NOTIFIED TO BE AN INFRAST RUCTURAL FACILITY BY THE CENTRAL BOARD OF DIRECT TAXES FOR THE PURPOSES OF SECTION 80IA(4)(I) OF THE ACT. HE FURTHER OBSERVED THAT TH E ASSESSEE ITSELF HAS NOT CARRIED OUT THE ACTIVITY OF RENTING THE WAR EHOUSE. THE ASSESSEE HAS LET OUT THE WAREHOUSES AND RENTAL INCO ME WAS DERIVED FROM WAREHOUSING FORM THREE COMPANIES TOTALING TO R S. 47,81,782/- AND RS. 1,14,51,155/- IN ASSESSMENT YEAR 2002-03 A ND 2004-05 RESPECTIVELY. THEREFORE, THE ASSESSING OFFICER HELD THAT THE INCOME FROM BONDED WAREHOUSE WAS NOT PART OF INCOME OF CO NTAINER FREIGHT STATION AND ACCORDINGLY, DISALLOWED DEDUCT ION U/S 80IA ON SUCH WAREHOUSING INCOME. PAGE 5 OF 14 I.T.A. NO. 825 & 826//MDS/2010 5. ON APPEAL, THE LD. CIT(A) ALLOWED THE DEDUCTION U/S 80IA ON INCOME FROM WAREHOUSING CHARGES TO THE ASSESSEE BY FOLLOWING THE ORDER OF HIS PREDECESSOR IN ITA NO. 599 OF 2006-07 AND 327/2007- 08/A-III IN ASSESSMENT YEAR 2004-05 AND 2005-06 RES PECTIVELY AND ALSO THE ORDER DATED 18.3.2006 PASSED BY HIS PREDEC ESSOR IN ITA NO. 513/2008-09/A-III. 6. AT THE TIME OF HEARING, THE LD. D.R. CONCEDED TH AT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THIS TRIBUNAL IN ASSESSEES OWN CASE REPORTED IN [2011] 7 ITR [TRIB] 532 [MDS]. 7. WE FIND THAT THE TRIBUNAL, WHILE DECIDING THIS I SSUE IN ASSESSMENT YEAR 2002-03 TO 2005-06 HAS HELD AS UNDE R: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MA TERIAL AVAILABLE ON RECORD. FIRST OF ALL, WE WOULD LIKE T O MAKE AN OBSERVATION THAT BY NOT FOLLOWING THE DIRECTIONS OF THE INCOME-TAX APPELLATE TRIBUNAL WHICH WERE VERY WELL A VAILABLE BEFORE THE ASSESSING OFFICER AT THE TIME WHEN HE WA S GIVING EFFECT TO THE COMMISSIONER OF INCOME-TAXS DIRECTIO N, IS A SERIOUS PROCEDURAL LAPSE ON HIS PART. WHEN THE ORDE R OF THE PAGE 6 OF 14 I.T.A. NO. 825 & 826//MDS/2010 COMMISSIONER OF INCOME-TAX HAD ALREADY MERGED WIT H THAT OF THE INCOME-TAX APPELLATE TRIBUNAL, THE DIRECTIO NS GIVEN BY THE COMMISSIONER OF INCOME-TAX NO LONGER SURVIV ED AND THE ASSESSING OFFICER HAS SIMPLY TRIED TO FLOG A DE AD HORSE. HIS REMARKS ARE SIMPLISTIC AND DIDACTIC, WHICH CARR Y NO MEANINGFUL RESULT. IT WAS ARGUED BY THE LEARNED AUTH ORISED REPRESENTATIVE THAT AFTER MAKING DEEP INVESTIGATION , THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS FOUND, SIMILAR CLAIM MADE BY THE ASSESSEE IN OTHER YEARS, AS A VALID CLAIM AGAINST WHICH FINDING THE REVENUE IS IN APPEAL AGAINST ALLOWANCE OF TRAVELLING EXPENDITURE AS APPORTIONED T O CFS ACTIVITY. WE HAVE SEEN THE COMMON ORDER PASSED BY THE SAME LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 DATED FEBRUARY 26, 2009, WHICH IS ALSO A SUBJECT MATTER OF APPEAL BEFOR E US. IN FACT, IN THESE YEARS, INVESTIGATION OF FACTS WITH REGARD TO WAREHOUSING CHARGES HAVE BEEN MADE AS DIRECTED BY TH E HONBLE INCOME-TAX APPELLATE TRIBUNAL IN EARLIER Y EARS. THE SAME OFFICER HAS FOUND IN THIS REGARD THUS : 3.7 THE CONTENTIONS OF THE ASSESSING OFFICER AND T HE SUBMISSION OF THE APPELLANT WERE CAREFULLY CONSIDER ED BY ME. I HAVE ALSO CONSIDERED THE ADDITIONAL SUBMISSION OF THE ASSESSING OFFICER SENT TO ME VIDE HIS LETTER DATE D DECEMBER 13, 2007 ENCLOSING THE ORDERS OF THE COMMISSIONER OF INCOME-TAX-I, CHENNAI, PASSED FOR THE ASSESSMENT YEARS PAGE 7 OF 14 I.T.A. NO. 825 & 826//MDS/2010 2002-03 AND 2003-04 WHEREIN AGREEING WITH THE ASSES SING OFFICERS ACTION OF EXCLUDING WAREHOUSING INCOME FROM CFS INCOME HE SET ASIDE THE ASSESSMENT OF ASSESSMENT YEARS 2002-03 AND 2003-04 FOR EXCLUDING THE WAREHOUSING I NCOME FROM CFS RECEIPTS AND CONSIDERING THE INCOME AND EXPENDITURE ON NUMBAL PLOT AND DIRECTORS TRAVELLIN G EXPENSES AFTER DUE VERIFICATION OF THE FACTS. I HAV E ALSO CONSIDERED THE COUNTER SUBMISSION OF THE AUTHORIZED REPRESENTATIVE THEREON. NOW I PROCEED TO DECIDE T HE ISSUE AS UNDER. THE APPROVING GUIDELINES EXPECT THAT ADEQUATE WAREHOUS ING FACILITIES SHOULD BE PROVIDED BY THE CFS OPERATOR. I N FACT, THE DEFINITION OF CFS MEANS : INLAND CONTAINER DEPOT (ICD)/CONTAINER FREIGHT STA TION (CFS) HAS BEEN DEFINED AS A COMMON USER FACILITY WITH P UBLIC AUTHORITY STATUS EQUIPPED WITH FIXED INSTALLATIONS A ND OFFERING SERVICES FOR HANDLING AND TEMPORARY STOR AGE OF IMPORT/EXPORT LADEN AND EMPTY CONTAINERS CARRIED UNDER CUSTOMS TRANSIT BY ANY APPLICABLE MODE OF TRANSPORT PLACED UNDER CUSTOMS CONTROL. ALL THE ACTIVITIES RELATED TO CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING TEMPORARY ADMISS IONS, RE-EXPORT, TEMPORARY STORAGE FOR ONWARD TRANSIT A ND OUTRIGHT EXPORT, TRANS-SHIPMENT, TAKE PLACE FROM SUCH STATIONS. PAGE 8 OF 14 I.T.A. NO. 825 & 826//MDS/2010 3.8 THEREFORE THE CFS ACTIVITY PRESUPPOSES ADEQUATE INFRASTRUCTURE TOWARDS WAREHOUSING AND THE INCOME THEREFROM CANNOT BE CONTENDED AS NON CFS INCOME. 3.9 THE FACT THAT WAREHOUSING ACTIVITY OUTSIDE CFS DO ES NOT QUALIFY FOR DEDUCTION UNDER SECTION 80-IA BY NO STRE TCH CAN BE A CONSIDERATION FOR TREATING THE ACTIVITY INSIDE A NOTIFIED CFS ALIKE. THE ACTIVITIES OF CFS ARE COMPLETELY D IFFERENT FROM WHAT HAPPENS OUTSIDE. 3.10 THE GOVERNMENT OF INDIA, FURTHER TO THE ISSUANC E OF ITS POLICY GUIDELINES REGARDING SETTING UP OF INLAND C ONTAINER DEPOT (ICD) AND CFS IN INDIA HAS RELEASED A SET O F SPECIFIC GUIDELINES CONTAINING THREE PARTS, VIZ., PART A, P ART B AND PART C FOR THE ABOVE PURPOSE. THE GUIDELINES ESSENTIA LLY LAYS DOWN BASIC CONDITIONS ONE HAS TO COMPLY WITH IN O RDER TO SET UP A CFS AND OPERATE THE SAME. 3.11 PART C OF THE ABOVE GUIDELINES GOVERNS THE PROC EDURE FOR APPROVAL OF CFS AND ITS IMPLEMENTATION. IN TERMS OF THE SAID POLICY GUIDELINES ISSUED BY THE MINISTRY OF COMMERC E, GOVERNMENT OF INDIA THE APPELLANT-COMPANY MADE AN APPLICATION AND AFTER DUE EXAMINATION OF THE APPLICA TION, THE MINISTRY OF COMMERCE, GOVERNMENT OF INDIA THROUGH ITS NOTIFICATION NO. 16/4/95-INFRA 1 DATED FEBRUARY 23, 1995 HAS NOTIFIED THE SETTING UP OF A CONTAINER FREIGHT STATION AT NUMBAL BY THE APPELLANT-COMPANY. THE NOTIFICATION RE FERRED PAGE 9 OF 14 I.T.A. NO. 825 & 826//MDS/2010 TO ABOVE CLEARLY STIPULATES THAT THE CONDITIONS GI VEN IN PART A AND PART B OF THE GUIDELINES REFERRED TO ABOVE S HALL BE SATISFIED AND IN ADDITION THE NOTIFICATION HAS LA ID DOWN CERTAIN MINIMUM FACILITIES WHICH ARE REQUIRED AT TH E CFS. THE SAID MINIMUM LEVEL OF FACILITIES REQUIRED UNDER CLAUSE C READS AS FOLLOWS : THE WAREHOUSING FACILITY SEPARATELY FOR EXPORTS AND IMPORTS AND LONG-TERM STORAGE OF BONDED CARGO. HERE IT IS ALSO WORTHWHILE TO REPRODUCE THE ABOVEMENTIONED NOTIFICAT ION AND MINIMUM LEVEL OF FACILITIES REQUIRED FOR READY RE FERENCE : NO. 16/4/95-INFRA-1 GOVERNMENT OF INDIA, MINISTRY OF COMMERCE INFRA-I SECTION NEW DELHI, 23RD FEBRUARY 1995 M/S. A. S. SHIPPING AGENCIES PVT. LTD., 55, ARMENIAN STREET, MADRAS 600 001. SUBJECT : APPLICATION FOR SETTING UP A CONTAINER FR EIGHT STATION AT NUMBAL VILLAGE, MADRAS. I AM DIRECTED TO REFER TO YOUR APPLICATION DATED 9T H JUNE, 1994 ON THE ABOVE SUBJECT AND TO SAY THAT THE GOVE RNMENT HAS APPROVED YOUR PROPOSAL FOR SETTING UP A CONTA INER FREIGHT STATION AT NUMBAL VILLAGE, MADRAS FOR HANDL ING EXPORT CARGO ONLY. THE APPROVAL IS SUBJECT TO THE FOLLOWI NG TERMS AND CONDITIONS : (I) PROPER INFRASTRUCTURE WOULD BE CREATED BY YOU KEEPI NG IN VIEW THE NORMS GIVEN IN PARTS A AND B OF THE GUIDE LINES FOR SETTING UP INLAND CONTAINER DEPOTS/CONTAINER FREIG HT STATIONS (ICDS/CFSS) AND TO HE SATISFACTION OF THE CONCERNED COLLECTOR OF CUSTOMS AND CENTRAL EXCISE WITHIN A PERIOD OF S IX MONTHS FROM THE DATE OF ISSUE OF THIS LETTER. PAGE 10 OF 14 I.T.A. NO. 825 & 826//MDS/2010 (II) NECESSARY BOND AND GUARANTEES WOULD BE EXECUTED B Y YOU WITH THE CONCERNED COLLECTOR OF CUSTOMS AND CENTRA L EXCISE; (III) THE APPROVAL WOULD BE SUBJECT TO CANCELLATION I N THE EVENT OF VIOLATION OF THE CUSTOMS AND OTHER LAWS O F THE LAND AND RULES. YOURS FAITHFULLY, (SD.) (N. D. AGNIHOTRI), JOINT DIRECTOR. MINIMUM LEVEL OF FACILITIES REQUIRED AT ICDS/CFSS THE FOLLOWING MINIMUM LEVEL OF FACILITIES ARE REQUIR ED TO BE PROVIDED AT ICDS/CFSS- (A) PROVISION OF STANDARD PAVEMENT FOR HEAVY DUTY EQ UIPMENT FOR USE IN THE OPERATIONAL AND STACKING AREA OF TH E TERMINAL, IN CASE WHERE ONLY CHASSIS OPERATION IS TO BE PER FORMED, THE PAVEMENT STANDARD COULD BE LIMITED TO THAT OF A HI GHWAY. A MINIMUM OF 35 PER CENT OF THE LAND AREA (PROVIDED AS PER THE GUIDELINES - 1 ACRE FOR THE PORT CFS AND 3 ACR ES FOR ICDS IN THE HINTERLAND) WOULD BE PAVED. (B) OFFICE BUILDING FOR ICD, CUSTOMS OFFICE AND A SEP ARATE BLOCK FOR USER AGENCIES EQUIPPED WITH BASIC FACILIT IES. (C) WAREHOUSING FACILITY, SEPARATELY FOR EXPORTS AND IMPORTS AND LONG-TERM STORAGE OF BONDED CARGO. (D) GATE COMPLEX WITH SEPARATE ENTRY AND EXIT. (E) ADEQUATE PARKING SPACE FOR VEHICLES AWAITING ENT RY TO THE TERMINAL . . . PAGE 11 OF 14 I.T.A. NO. 825 & 826//MDS/2010 3.12 THEREFORE, IF ONE HAS TO QUALIFY AS AN ELIGIBLE CONTAINER FREIGHT STATION OPERATOR, ONE HAS TO PROVIDE THE MINIMUM LEVEL OF INFRASTRUCTURE AS PROVIDED IN THE NOTIFICATI ON AND AS SUCH HAVING ADEQUATE WAREHOUSING FACILITY IS AN ESSE NTIAL PART OF THE MINIMUM LEVEL OF INFRA- STRUCTURE REQUIRE MENTS. 3.13 HERE IT MAY BE MENTIONED THAT AS PER PART B OF THE GUIDELINES FOR SETTING UP INLAND CONTAINER DEPOT ( ICD) AND CONTAINER FREIGHT STATION (CFS) IN INDIA THE FOLLOW ING INFRASTRUCTURE SHOULD BE AVAILABLE AT THE ICDS/CFS. PROVISION OF STANDARD PAVEMENT FOR HEAVY DUTY EQUIPMENT FOR U SE IN THE OPERATIONAL AND STACKING AREA OF THE TERMINAL. IN CASES WHERE ONLY CHASSIS OPERATION IS TO BE PERFORMED, TH E PAVEMENT STANDARD COULD BE LIMITED TO THAT OF A HIGH WAY. OFFICE HOLDING FOR ICD, CUSTOMS OFFICE AND A SEPARAT E BLOCK FOR USER AGENCIES EQUIPPED WITH BASIC FACILITIES. WA RE HOUSING FACILITY, SEPARATELY FOR EXPORTS AND IMPORTS AND LONG-TERM STORAGE OF BONDED CARGO. GATE COMPLEX WITH SEPARATE ENTRY AND EXIT. 3.14 NOW AS CAN BE SEEN FROM THE ABOVE NOTIFICATION OF MINISTRY OF COMMERCE AND THE GUIDELINES THE APPROV AL IS SUBJECT TO THE CREATION OF MINIMUM LEVEL OF INFRAS TRUCTURE FACILITIES. HENCE IT IS AN ESSENTIAL PART OF THE CFS OPERATION BUSINESS OF THE APPELLANT. FURTHER, THE COMMISSIONE R OF CUSTOMS HAS ALSO NOTIFIED THE STIPULATED AREA AS PUB LIC PAGE 12 OF 14 I.T.A. NO. 825 & 826//MDS/2010 BONDED WAREHOUSE VIDE HIS LETTER DATED SEPTEMBER 26, 2000. FURTHERMORE, VIDE PUBLIC NOTICE 173 OF 2001 AND SEVER AL OTHER PUBLIC NOTICES THE WAREHOUSE HAS BEEN INCLUDED IN THE CUSTOMS AREA. 3.15 THEREFORE, AFTER A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, VARIOUS STATUTORY REQUIREMEN TS AND CONDITIONAL APPROVAL OF THE MINISTRY OF COMMERC E I FIND THAT THE CLAIM OF THE APPELLANT IS ALLOWABLE. THE ASSESSING OFFICER HAS BEEN WRONGLY INFLUENCED BY THE FACT T HAT WAREHOUSING FACILITIES MAY BE SITUATED OUTSIDE CFS A REA ALSO AND SUCH WAREHOUSING FACILITIES DO NOT GET ANY DED UCTION. THE ASSESSING OFFICER IS VERY CORRECT THAT WAREHOUSI NG FACILITIES ALONE MAY NOT GET ANY DEDUCTION BUT WHEN THEY ARE PART OF CFS AS A NECESSARY INFRASTRUCTURE AS DISCUS SED ABOVE AND SUCH CFSS CAN COME INTO EXISTENCE AND OPERATE ONLY IF IT PROVIDES MINIMUM INFRASTRUCTURE FACILITY AS ONLY THE N SANCTION FOR THE CFS STATUS IS GRANTED THEN SUCH W AREHOUSING FACILITY IS DIFFERENT FROM THE STAND ALONE WAREHO USING FACILITY OPERATED OUTSIDE CFS. IN FACT, SITUATION IS LIKE THAT THERE CAN BE A WAREHOUSE WITHOUT CFS BUT NOT A CFS WIT HOUT WAREHOUSING AS CAN BE SEEN FROM THE NOTIFICATION PER TAINING TO THE APPELLANT WHERE IT IS PART OF MINIMUM LEVEL OF INFRASTRUCTURE. HENCE, IN SUCH A SITUATION WAREHOUSI NG INCOME, IN MY OPINION, HAS TO BE TREATED AS PART OF CFS INCOME AND ELIGIBLE FOR THE DEDUCTION UNDER SECTION 80-IA. PAGE 13 OF 14 I.T.A. NO. 825 & 826//MDS/2010 THEREFORE, THE APPELLANT SUCCEEDS ON THIS GROUND IN BOTH THE YEARS. THE FACTS IN ALL THE YEARS REMAINED SAME AND STATIC . THE REASONS GIVEN BY THE LEARNED COMMISSIONER OF INCO ME-TAX (APPEALS) IN THE ABOVE PARA GRAPHS TO ALLOW THIS CL AIM OF THE ASSESSEE ARE SUFFICIENT TO DRIVE US ALSO TO COME T O A SIMILAR CONCLUSION. THEREFORE, WE ALLOW WAREHOUSING INCOME TO BE A PART OF CFS INCOME AND HOLD IT ELIGIBLE FOR DEDUCTI ON UNDER SECTION 80-IA. IT IS FOUND FOR A FACT THAT WAREHOUS ING FACILITIES IN THIS CASE ARE A PART OF CFS BEING A NECESSARY INFRASTRUCTURE. THE NOTIFICATION OF THE MINISTRY IS VERY CLEARLY WORDED IN THIS RESPECT. IN ALL THESE YEARS, THIS COMMON ISSUE IS ALLOWED IN FAVOUR OF THE ASSESSEE A ND AGAINST THE REVENUE. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 8. RESPECTFULLY FOLLOWING THE ABOVE QUOTED DECISION OF THE TRIBUNAL, WE CONFIRM THE ORDER OF THE LD. CIT(A) AN D DISMISS THE GROUNDS OF APPEAL TAKEN BY THE REVENUE IN BOTH THE APPEALS. PAGE 14 OF 14 I.T.A. NO. 825 & 826//MDS/2010 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE CONCLUSIO N OF HEARING ON TUESDAY, THE 14 TH DAY OF JUNE, 2011 AT CHENNAI. SD/- SD/- ((U.B.S BEDI ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 14 TH JUNE, 2011. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE