Asst. CIT, Panvel Circle, Raigad V. Continental Warehousing Corporation (Nhava Sheva) Ltd., Raigad

ITA 906/PUN/2013

• Counselvise Citation: 90624514 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M S VERMA
• Assessee Lawyers: ABHISHEK TILAK

Judgement Text

INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 906/PN/2013 (ASSESSMENT YEAR 2009-10) ACIT, PANVEL CIRCLE, PANVEL, DIST : RAIGAD .. APPELLANT VS. CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD., D.NO.1088, KHOPTA VILLAGE, TAL : URAN, DIST : RAIGAD .. RESPONDENT PAN NO.AAACC5849C ASSESSEE BY : SHRI ABHISHEK TILAK DEPARTMENT BY : MS. M.S. VERMA, CIT DATE OF HEARING : 17-11-2014 DATE OF PRONOUNCEMENT : 18-11-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 17-12-2012 OF THE CIT(A)-I, THANE RELATING TO ASSESSMENT YEAR 2009-10. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. WHETHER THE CIT(A)-I, THANE IS RIGHT IN LAW IN H OLDING THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IA OF THE I.T. AC T, 1961 EVEN THOUGH ACTIVITIES UNDERTAKEN BY THE ASSESSEE DO NOT FALL WITHIN CLAUSE (D) OF THE EXPLANATION TO 80IA(4) DEFINING THE TERM INFRASTRUCT URE FACILITIES? 2. THE APPELLANT PRAYS THE ORDER OF THE LD.CIT(A)-I, THANE MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUND/GROUNDS WHICH MAY BE NECESSARY. 2 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE COMPANY IS ENGAGED IN OPERATING THE CONTAINER FREIGHT STATION (CFS) AND FILED ITS RETURN OF INCOME ON 20.09.2010 DECLARING TOTAL INCOME OF RS.4,80,85,257/- AFTER CLAIMING DEDUCTION U/S. 80IA(4 ) TO THE EXTENT OF RS. 33,88,19,293/-. THE ASSESSEE COMPANY ALSO FILED THE AUDIT REPORT IN FORM NO. 10CCB AS PER RULE 18BBB STATING THAT THE CFS OPERATED BY THE COMPANY IS A 'PORT' WHICH IS ONE OF THE INFRASTRUCT URE FACILITY FOR THE PURPOSE OF SECTION 80IA OF INCOME-TAX ACT, 1961 AND THEREFORE THE COMPANY IS ELIGIBLE FOR TAX HOLIDAY UNDER THE INCOM E TAX ACT. 3.1 THE ASSESSEE COMPANY HAS SET UP A CONTAINER FRE IGHT STATION IN JAWAHARLAL NEHRU PORT TRUST AREA OVER APPROX. 30 AC RES OF LAND AND IS OFFERING THE SERVICES RELATING TO THE HANDLING AND TEMPORARY STORAGE OF LOADED CONTAINERS FOR IMPORT/EXPORT DESTINATIONS IN CLUDING THE STORAGE OF EMPTY CONTAINERS. THE OPERATIONS OF THE CFS OF T HE ASSESSEE COMPANY INCLUDE BROADLY THE CLEARANCE OF GOODS FOR HOME USE, WAREHOUSING, TEMPORARY ADMISSIONS, RE-EXPORT, TEMPO RARY STORAGE FOR ONWARD TRANSIT/OUTRIGHT EXPORT, TRANSSHIPMENTS ETC. THE CFS OF THE ASSESSEE COMPANY STARTED ITS OPERATIONS IN JANUARY 2006. 3.2 THE AO DID NOT ACCEPT THE ABOVE CLAIM OF THE A SSESEEE COMPANY FOR DEDUCTION U/S. 80IA(4) ON THE GROUND THAT THE C ENTRAL BOARD OF DIRECT TAXES (CBDT) VIDE ITS CIRCULAR NO. 10 OF 2005 DATED : 16.12.2005 HAD CLARIFIED THAT 1. 'THE DEFINITION OF 'PORT' FOR THE PURPOSE OF DED UCTION U/S 801A INCLUDING STRUCTURES AT THE PORT FOR STORAGE, LOADING AND UNLOADING ETC. IN THE DEFINITION OF PORT, SUBJE CT TO ISSUANCE OF A CERTIFICATE THAT THE SAID STRUCTURES FORM PART OF THE PORT BY THE CONCERNED PORT AUTHORITY; 3 2. IT SHOULD BE OWNED BY A COMPANY REGISTERED IN IN DIA OR BY A CONSORTIUM OF SUCH COMPANIES; 3. IT SHOULD HAVE ENTERED INTO AN AGREEMENT WITH TH E CENTRAL GOVERNMENT OR A STATE GOVT. OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAIN TAINING A NEW INFRASTRUCTURE FACILITY; 4. IT SHOULD HAVE STARTED OR STARTS OPERATING AND M AINTAINING THE INFRASTRUCTURE FACILITY ON OR AFTER THE 1 ST DAY OF APRIL, 1995.' 3.3 ACCORDING TO THE AO, THE ABOVE CONDITIONS AS S TIPULATED IN THE PARA 1 OF THE CIRCULAR NO. 10 OF 2005 HAVE NOT BEEN FULFILLED BY THE ASSESSEE COMPANY. THE CERTIFICATE ISSUED BY THE JAW AHARLAL NEHRU PORT TRUST (JNPT) TO THE ASSESSEE COMPANY DATED 13/07/20 06 FOR THE PURPOSE OF AVAILING THE BENEFIT OF DEDUCTION U/S. 80IA(4) H AS BEEN WITHDRAWN VIDE THEIR LETTER DATED: 05/10/2007 AND AS A RESULT OF T HIS WITHDRAWAL, THE ASSESSEE COMPANY IS NO MORE ELIGIBLE FOR THE BENEFI T OF DEDUCTION U/S. 80IA(4). THE SAID STRUCTURE OF THE ASSESSEE, THEREF ORE, DOES NOT FORM PART OF THE PORT OF JNPT. 3.4 FURTHER, ACCORDING TO THE AO, THE ASSESSEE COM PANY HAS NOT ENTERED INTO AN AGREEMENT WITH THE CENTRAL OR STATE GOVT. OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR (I) DEVEL OPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY AND THE NON FULFILLMENT OF THIS CONDITION MAKES THE ASSESSEE COMPANY INELIGIBLE FOR AVAILING THE BENEFIT U/S. 80IA(4). 3.5 IT WAS FURTHER POINTED OUT BY THE AO THAT THE C BDT VIDE F.NO.178/42/2010-ITA-1 DATED 06-01-2011 HAS CLARIFI ED THAT THE ICDS AND THE CFSS ARE NOT PORTS LOCATED ON ANY INLAND W ATERWAYS, RIVER OR CANAL AND THEREFORE CANNOT BE CLASSIFIED AS INLAND PORTS FOR THE PURPOSE OF SECTION 80IA(4) OF THE INCOME TAX ACT. 4 3.6 ACCORDINGLY, THE AO ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ASKING TO EXPLAIN AS TO WHY THE DEDUCTION AMOUNTING TO RS.33,88,19,293/- CLAIMED DEDUCTION U/S.80IA(4) SHO ULD NOT BE DISALLOWED. REJECTING THE VARIOUS EXPLANATIONS GIV EN BY THE ASSESSEE AND FOLLOWING THE ORDER OF HIS PREDECESSOR IN ASSES SEES OWN CASE FOR A.Y. 2008-09, THE AO DISALLOWED THE CLAIM OF DEDUCT ION U/S.80IA(4). 4. IN APPEAL THE LD.CIT(A) FOLLOWING THE DECISION O F THE MUMBAI BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE, I.E., CONTINENTAL WAREHOUSING CORPORATION (NHAVA SEVA) LTD., VS. ACIT VIDE ITA NO.7055/MUM/2011 ORDER DATED 31-08-2012 FOR A.Y. 20 08-09 ALLOWED THE CLAIM OF DEDUCTION MADE BY THE ASSESSEE . 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US. 6. AFTER HEARING BOTH THE SIDES, WE FIND AN IDENTIC AL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. WE FIND THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NO.7055/MUM/2011 ORDER DATED 31-08- 2012 FOR A.Y. 2008-09 HAS DECIDED THE ISSUE IN FAV OUR OF THE ASSESSEE BY OBSERVING AS UNDER : 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE HAVE ALSO CAREFULLY GONE THROUGH THE AFOREMENTIONED DECISION OF THE SPECIAL BENCH IN THE CASE OF ALL CARG O GLOBAL LOGISTICS LTD. & OTHERS (SUPRA) AND WE FIND THAT ON IDENTICAL FACTS, EX CEPT DIFFERENCE IN THE DATES IT WAS HELD BY THE SPECIAL BENCH THAT THE ASSESSEE IS AN 'INLAND PORT' HENCE, ELIGIBLE FOR DEDUCTION UNDER SECTION 80 IA(4) OF THE ACT. FOR THE SAKE OF COMPLETENESS WE REPRODUCE RELEVANT PORTION OF THE SPECIAL BENCH ORDER. '60. THE SECOND QUESTION BEFORE US IS WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) WAS JUSTIF IED IN UPHOLDING THE DISALLOWANCE OF DEDUCTION UNDER S. 80-IA(4) OF THE AC T ON MERITS? 5 61. THE FACTS IN THE CASE OF ALL CARGO GLOBAL LOGISTIC S LTD. ARE THAT THE ASSESSEE COMMENCED CFS ACTIVITIES ON 7TH APRIL, 2003. IN THIS CONNECTION A LETTER HAS BEEN RECEIVED FROM THE COMMR. OF CUSTOM (I MPORT), BEARING NO. 3 OF 2003, AT. 28TH FEB., 2003, CLASSIFYING THE AREA OF 3,282 SQ. MTRS. AS CUSTOMS AREA FOR THE PURPOSE OF STORAGE, STUFFING/DESTUFF ING AND CLEARANCE OF EXPORT/IMPORT CARGO. SUBSEQUENTLY, THE ASSESSEE HAS BEEN CERTIFIED AS A CUSTODIAN OF CARGO UNDER CUSTOMS ACT, 1962, BY NOTIFYI NG THE AREA AS 'CUSTOMS AREA'. IT HAS BEEN SUBMITTED THAT A CFS IS COMM ON USER FACILITY OFFERING SERVICES IN HANDLING AND TEMPORARY STORING OF IMPORT/EXPORT LADEN EMPTIES CARRIED UNDER CUSTOMS CONTROL AND SUPERVISION. I T IS ALSO A BONDED WAREHOUSE FACILITY WHERE CUSTOMERS CAN CLEAR THE CARGO FOR EXPORT TO VARIOUS COUNTRIES AND RECEIVE CUSTOMS- CLEARED CARGO F OR HOME CONSUMPTION. THE STAFF OF CUSTOMS DEPARTMENT IS POSTED IN THE CFS FOR SUCH CLEARANCES. THE ASSESSEE ENCLOSED A CERTIFICATE FROM THE CHARTERED ACCOUNTANT IN FORM NO. 1OCCB, WHICH IS A PRECONDITIO N FOR CLAIMING THE DEDUCTION UNDER S. 80-IA(4). A CERTIFICATE FROM THE PORT TRUST HAS ALSO BEEN ENCLOSED TO THE EFFECT THAT THE ACTIVITIES MAY BE CO NSIDERED AS EXTENDED ACTIVITIES AS OF PORT-RELATED ACTIVITIES IN ACCORDAN CE WITH THE CIRCULAR NO. 793, DT 23RD JUNE, 2000 [(2000) 161 CTR (ST) 211. R /W CIRCULAR NO. 133/1995-CUS., DT. 22ND DEC.. 1995 OF THE BOARD OF E XCISE AND CUSTOMS. THE CBDT HAD ALSO ISSUED CIRCULAR NO. 10 OF 2005, DT. 16TH DEC., 2005 1(2005)199 CTR (ST) 971 CLARIFYING THAT THE STRUCTUR ES AT THE PORT FOR STORAGE, LOADING AND UNLOADING CONSTITUTE 'PORT' FOR THE PURPOSE OF S. 10(23G) AND S. 80-IA. 62. BEFORE US, LEARNED COUNSEL FOR THE CONTAINER CORP ORATION OF INDIA SUBMITTED AT THE OUTSET THAT THE DECISION OF HON'BLE D ELHI HIGH COURT DT. 11TH MAY. 2012 HAS NOW BEEN RECEIVED, A COPY OF WHIC H IS PLACED IN PAPER BOOK ON PAGE NOS. 14 TO 33. THE DECISION WAS RENDERED IN RESPECT OF THREE APPEALS FILED BY THE ASSESSEE BEARING IT APPEAL NOS. 1411 OF 2009, 967 OF 2011 AND 968 OF 2011. THE ASSESSMENT YEARS INVOLVED ARE 2003-04 TO 2005- 06. AFTER GOING THROUGH THE HISTORY OF LEGISLATION, I T IS MENTIONED IN PARA NO. 8 THAT ASST. YR. 1999-2000 WAS FIRST YEAR IN WHICH INL AND PORTS WERE DESIGNATED AS 'INFRASTRUCTURE FACILITY' UNDER S. 80-IA. THE OBJECT WAS TO STRENGTHEN INFRASTRUCTURE IN GENERAL AND THE TRANSPORT INFRASTRUCTURE IN PARTICULAR. THEREAFTER IT IS MENTIONED IN PARA NO. 9 THAT THE QUESTION BEFORE THE COURT ISWHETHER, THE INCOME FROM THE INLAND CO NTAINER DEPOTS (ICDS) QUALIFY FOR DEDUCTION UNDER S. 80-IA(4)(I) OF THE AC T R/W EXPLN. (D) THERETO. THE COURT REFERRED TO THE FACTS OF THE CASE THAT THE ASSESSES OPERATED 45 ICDS. ALL THE ICDS EXCEPT 2 WERE NOTIFIED BY THE CBDT FOR THE PURPOSE OF S. 80-IA(12)(CA) ON 1ST SEPT, 1998. HOWEVER THE POWER T O NOTIFY 'INFRASTRUCTURE FACILITY'' FOR THE PURPOSE OF THIS SECT ION WAS TAKEN AWAY FROM THE CBDT W.E.F. 1ST APRIL, 2002. THE COURT NOTED THA T WHEREVER THE WORD 'PORT' IS USED, IT CARRIES WITH IT MARITIME CONNECTION OR CONNOTATION. IT IS FOR THIS REASON THAT THE SECTION SEPARATELY REFERS TO AIRPOR T AS IT DOES NOT HAVE A MARITIME CONNECTION. THE CUSTOMS CLEARANCE TAKES PLACE BOTH AT THE AIRPORT AND POST. THE ICDS ARE LANDLOCKED AND V IS NOBODY'S CA SE THAT THEY ARE LOCATED IN SUCH A PLACE WHERE SHIPS OR VESSELS HAVE V DI RECT ACCESS. THE GOODS WHICH ARE BROUGHT IN OR REMOVED FROM THE ICDS A RE BROUGHT OR TAKEN EITHER BY RAILWAY WAGONS OR BY CONTAINER TRUCKS, AS TH E CASE MAY BE. FINALLY, IT HAS BEEN HELD THAT ALTHOUGH ICD MAY NOT BE A PORT , BUT IT IS AN INLAND PORT. THE RELEVANT PORTION OF THE DECISION IS REPRODUCED BE LOW: '19. THE TRIBUNAL ERRED IN HOLDING THAT BECAUSE OF T HE CHANGE MADE BY THE FINANCE ACT, 2001 W.E.F. 1ST APRIL, 2002 BY DROPPING THE POWER OF THE CBDT TO NOTIFY ANY OTHER PUBLIC FACILITY OF SIMILAR NATUR E FOR THE PURPOSE OF S. 80- IA OF THE ACT, THE ICD CANNOT BE CONSIDERED AS INLAND PORT. THE ERROR 6 COMMITTED BY THE TRIBUNAL IS TO OVERLOOK THAT BOTH B EFORE AND AFTER THE ABOVE AMENDMENT, INLAND PORTS WERE SPECIFICALLY MENT IONED AS AN INFRASTRUCTURE FACILITY IN THE STATUTORY PROVISION AND IN THE UNDERSTANDING OF THE CBEC, WHICH ADMINISTERS THE CUSTOMS ACT, AN ICD WAS ACTUALLY AN INLAND PORT. THERE IS ALSO NO DISPUTE THAT EVEN IN 198 3 AMENDMENTS HAD BEEN MADE TO THE CUSTOMS ACT BY TREATING THE ICD AS PA RT OF THE CUSTOMS PORT FOR PURPOSE OF CUSTOMS FORMALITIES AND CLEARANCES. IN THESE CIRCUMSTANCES, THE REAL QUESTION WAS NOT WHETHER THE CB DT NOTIFIED THE. ICD AS AN INLAND PORT BUT WHETHER THE ICD CAN BE CON SIDERED TO BE AN INLAND PORT. IN OUR OPINION HAVING REGARD TO THE PROVISIONS OF THE CUSTOMS ACT, THE COMMUNICATIONS ISSUED BY THE CBEC AS WELL AS THE MINISTRY OF COMMERCE AND INDUSTRY, THE OBJECT OF INCLUDING 'INLAND PORT' AS AN INFRASTRUCTURE FACILITY AND ALSO HAVING REGARD TO THE FACT THAT CUST OMS-CLEARANCE ALSO TAKES PLACE IN THE ICD, THE ASSESSEE'S CLAIM THAT THE ICDS ARE INLAND PORTS UNDER EXPLN. (D) OF S. 80-IA(4) REQUIRES TO BE UPHELD.' 63. THE SUBMISSION OF THE LEARNED COUNSEL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. IS THAT THE HON'BLE DELHI HIGH COURT HA S HELD THAT ICDS ARE LANDLOCKED AND SITUATED FAR OFF FROM THE SEA PORT AS SU CH. THE ICDS OF THE CONTAINER CORPORATION OF INDIA ARE LOCATED AT PLACE S SUCH AS JAMSHEDPUR, JODHPUR, JAIPUR, ETC. THESE HAVE BEEN HELD TO BE INL AND PORTS FOR THE PURPOSE OF DEDUCTION UNDER S. 80-IA(4). THE CASE OF THE ASSESSES I S BETTER PLACED THAN THE CASE OF CONTAINER CORPORATION OF INDIA LTD. (SUPR A) IN AS MUCH AS IT IS SITUATED 5 FANS, AWAY FROM THE PORT AND IT IS APART OF THE PORT FOR CARRYING OUT ACTIVITIES MENTIONED EARLIER. CUSTOMS-CLEARANCE T AKES PLACE FROM ASSESSEE'S CFS. THEREFORE, IT IS ARGUED THAT THE ASSESSES IS ENTITLED TO DEDUCTION UNDER S. 80-TA. 64. IN REPLY, THE LEARNED STANDING COUNSEL SUBMITTED T HAT WHENEVER THE ASSESSEE CLAIMS AN INCOME TO BE EXEMPT FROM TAX OR CLAIM S A DEDUCTION, THE PRECONDITIONS FOR EXEMPTION OR DEDUCTION HAVE TO BE STRICTLY SATISFIED BY HIM. AS HELD IN THE CASE OF NOVOPAN INDIA LTD. VS. CCB (1994) 3 SCC 606. IN RESPECT OF THIS DECISION, HE LAID STRESS ON THE FINDING THAT LIBERAL AND STRICT CONSTRUCTIONS OF EXEMPT PROVISION ARE TO BE INVOKED AT DIFFERENT STAGES OF ITS INTERPRETATION. WHEN THE QUESTION IS WHETHER A SUBJECT FALLS IN THE NOTIFICATION OR IN THE EXEMPTION CLAUSE THEN IT BEIN G IN THE NATURE OF EXEMPTION IS TO BE CONSIDERED STRICTLY AND AGAINST THE SUBJECT BUT ONCE THE AMBIGUITY OR DOUBT ABOUT APPLICABILITY IS LIFTED AND THE SUBJECT FALLS IN THE NOTIFICATION THEN FULL PLAY SHOULD BE GIVEN TO IT AN D IT CALLS FOR A WIDER AND LIBERAL CONSTRUCTION. IN THE LIGHT OF THIS DECISION, H E DEALT WITH THE CLAIM OF THE ASSESSEE UNDER S. 80-IA). IT IS SUBMITTED THAT IN BOAR D CLARIFICATION AT. 6TH JAN., 2011, IN WHICH DT. 16TH .DEC., 2005 AND 23RD JUNE, 2000 WERE CONSIDERED, IT HAS BEEN CLARIFIED THAT ICDS AND CFSS ARE NOT 'PORTS' LOCATED ON ANY INLAND WATERWAY, RIVER OR CANAL AND THEREFOR E THEY CANNOT BE CLASSIFIED AS INLAND PORTS' FOR THE PURPOSE OF S. 80-IA(4 ). IT IS FURTHER SUBMITTED THAT THE CERTIFICATE ISSUED BY JAWAHAR LAL N EHRU PORT TRUST HAS BEEN WITHDRAWN BY THE PORT TRUST IT IS ALSO SUBMITTED T HAT INLAND WATERWAYS AUTHORITY OF INDIA ACT. 1985, PROVIDES THE DEFINITION OF THE TERM INFRASTRUCTURE FACILITIES', IN ITS CL. (F), AS THE STRUC TURES SUCH AS DOCKS, WHARVES, JETTIES, STAGES, LOCKS; BUOYS, INLAND PORTS, CARG O HANDLING EQUIPMENTS, ROAD AND RAIL ACCESS AND CARGO STORAGE SPAC ES AND STATES THAT THE EXPRESSION 'INFRASTRUCTURE FACILITIES SHALL BE CONSTR UED ACCORDINGLY. IN THIS ACT, INLAND PORT IS INCLUDED AS ITEM, THUS, THIS TE RM HAS A DISTINCT MEANING, SEPARATE AND APART FROM OTHER TERMS. THEREFO RE, ICDS AND CFSS CANNOT BE INTERPRETED TO BE INCLUDED IN THE TERM 'I NLAND PORT'. IT IS ALSO SUBMITTED THAT CIRCULAR NO. 74 OF 1997-CUS., DT. 30TH DEC., 1997 OF THE CBEC MAKES A DISTINCTION BETWEEN INLAND PORTS AND ICDS/CFSS FOR GRANT OF DUTY DRAWBACK BENEFIT. IT IS ALSO SUBMITTED THAT A STUDY PRE PARED BY TRANSPORT 7 AND TOURISM DIVISION OF ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND PACIFIC (A DIVISION OF THE UNITED NATIONS) PROVIDES AN INSIGHT IN THE CONCEPT OF 'INLAND PORT' VIS-AVIS 'SEAPORT'. IT IS MENTIONED T HERE THAT ACCESS SHOULD BE PROVIDED TO INLAND PORTS THROUGH WATERWAYS FROM SEA BY DEVELOPING THEM. 65. WE HAVE CONSIDERED THE FACTS OF THE CASES AND SUBMISSI ONS MADE BEFORE US. IT MAY BE MENTIONED THAT ONE OF THE ARGUMENTS ADV ANCED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE CASE OF CONTAINER COR PORATION OF INDIA (SUPRA) IS NOT BASED ON ANY OF THE CIRCULARS ISSUED BY TH E PORT AUTHORITIES, HOWEVER, THE CFS OF THE ASSESSEE HAS BEEN GRANTED SUCH CE RTIFICATE. THE CERTIFICATE MENTIONS THAT THE CFS CARRIES ON PORT RE LATED ACTIVITIES, AND IT MAY BE CONSIDERED AS AN EXTENDABLE ACTIVITY OF THE PO RT RELATED ACTIVITIES. IT IS CLARIFIED THAT THE CFS HAS NOT BEEN BUILT ON BOT O R BOLT SCHEME SAND THAT IT IS SITUATED ON LAND WHICH DOES NOT BELONG TO THE PO RT THE LETTERS WRITTEN BY PORT TRUST TO THE ASSESSEE ALSO STATE THAT THE MATTER HAS BEEN REFERRED TO THE IT DEPARTMENT. THE DEPARTMENT HAS CLARIFIED THAT AN ICD/CFS DOES NOT CONSTITUTE AN INLAND PORT. IN THE CASE OF GIT VS. ABG HEAVY INDUSTRIES LTD. & ORS. (2010) 231 CTR (BOM) 127: (2010) 37 DTR (BOM) 2 33: (2010) 189 TAXMAN 54 (BOM), THE HON'BLE COURT HAS HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER S. 80-IA. HOWEVER THERE IS A VERY SAL IENT DIFFERENCE IN FACTS THAT STRUCTURES WERE LOCATED AT PORT AND SUCH STRUCTURE S HAD TO BE HANDED OVER TO THE PORT TRUST ON EXPIRY OF THE PERIOD OF AG REEMENT IN THE CASE AT HAND IT IS CLEAR THAT THE ASSETS OF THE CFS ARE NOT T O BE HANDED OVER TO THE PORT TRUST AT ANY POINT OF TIME AS IT IS NOT BUILT ON BOT AND BOLT SCHEME. THE CFS IS ALSO NOT LOCATED AT THE PORT. AS AGAINST THE AFORESAID, THE LEARNED STANDING COUNSEL HAS SUBMITTED THAT CLARIFICATIONS ISSUED BY OTHER AUTHORITIES INCLUDING CBEC UNDER THE RELEVANT ACTS DO NOT LAY GUIDELINES UNDER THE IT ACT AND THAT THE MATTER HAS TO BE DECID ED UNDER THE IT ACT INDEPENDENTLY. FOR DOING SO, INITIALLY A STRICT INTE RPRETATION HAS TO BE PLACED ON THE WORDS 'INLAND PORT' TO EXAMINE THAT THE ASSESSEE IS ENTITLED TO THE DEDUCTION. CBDT HAS FURNISHED OPINION THAT ICDS AND CF SS ARE NOT ENTITLED TO SUCH DEDUCTION AS THEY DO NOT CONSTITUTE INLAND POR TS. OTHER ACTS AS WELL AS STUDY REPORT LEAD TO THE CONCLUSION THAT A PORT CAN SAID TO BE AN INLAND PORT ONLY IF IT HAS AN ACCESS TO THE SEA VIA A WATERWAY . 66. WE FIND THAT THE SOLITARY DECISION IN THIS CASE BY ANY HIGH COURT IS IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD. (SUPRA). IN THIS CASE IT HAS BEEN HELD THAT AN ICD IS NOT A PORT BUT IT IS AN INLAND PO RT. THE CASE OF CFS IS SIMILARLY SITUATED IN THE SENSE THAT BOTH CARRY OUT SIMI LAR FUNCTIONS. I.E.. WAREHOUSING, CUSTOMS CLEARANCE AND TRANSPORT OF GOODS FR OM. ITS LOCATION TO THE SEAPORTS AND VICE VERSA BY RAILWAY OR BY TRUCKS IN CONTAINERS. THUS, THE ISSUE IS NO LONGER RES INTEGRA. RESPECTFULLY FOLLOWING THIS DECISION, IT IS HELD THAT A CFS IS AN INLAND PORT WHOSE INCOME IS ENTITLED TO DEDUCTION UNDER S. 80-IA(4). QUESTION NO. 2 IS ANSWERED ACCORDINGLY,' 6.1 IN THIS VIEW OF THE SITUATION, RESPECTFULLY FOLLOW ING THE AFORESAID DECISION OF SPECIAL BENCH WE ALLOW THE APPEAL FILED BY THE ASSESSEE AND IT IS HELD THAT ASSESSEE IS ENTITLED TO GET DEDUCTION UNDER SE CTION 80IA(4) OF THE ACT. 6.1 RESPECTFULLY FOLLOWING THE DECISION OF THE TRIB UNAL IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECEDING ASSESSMENT YE AR AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOT ICE BY LD. 8 DEPARTMENTAL REPRESENTATIVE , WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ALLOWING THE CLAIM OF THE ASSESSEE. ACCORDI NGLY, THE ORDER OF THE CIT(A) IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON 18-11-2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 18 TH NOVEMBER, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I, THANE 4. CIT-I, THANE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, ITAT, PUNE BENCHES, PUNE