ACIT CC 39, MUMBAI V. UNITED LINER AGENCIES OF INDIA P.LTD, MUMBAI

ITA 970/MUM/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2130 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 11-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: Y P TRIVEDI
• Keywords: Depreciation; Rule of consistency; Competent authority; Reassessment proceedings
• Section: 194C; 263

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.970/MUM/2014 ASSESSMENT YEAR: 2005-06 ACIT, CC-6(4), R. NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K.ROAD MUMBAI-400020 / VS. M/S UNITED LINER AGENCIES OF INDIA P. LTD. GODREJ COLISEUM, OFFICE NO.801, C-WING, BEHIND EVERARD NAGAR, OFF SOMAIYA HOSPITAL ROAD, SION EAST, MUMBAI-400022 ( / REVENUE) ( !' # /ASSESSEE) PAN. NO. AAACU5182C / REVENUE BY SHRI NARENDRA KUMAR CIT-DR !' # / ASSESSEE BY SHRI Y. P. TRIVEDI & USHA DALAL $ % & # ' / DATE OF HEARING : 07/10/2015 & # ' / DATE OF ORDER: 16/10/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 21/11/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO H OLDING THAT M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 2 THE CONTAINER FREIGHT STATION OF THE ASSESSEE IS AN INLAND PORT FOR THE PURPOSES OF DEDUCTION U/S 80IA(4) OF THE IN COME TAX ACT, 1961 (HEREINAFTER THE ACT), RELYING UPON THE D ECISION OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGIST ICS LTD. (SB) & M/S CONTINENTAL WAREHOUSING CORPORATION. 2. DURING HEARING OF THIS APPEAL, THE CRUX OF ARGU MENT ADVANCED ON BEHALF OF THE REVENUE IS IDENTICAL TO T HE GROUND RAISED BY FURTHER CONTENDING THAT THE CASES (AFORES AID), RELIED UPON BY THE LD. FIRST APPELLATE AUTHORITY ARE PENDI NG BEFORE HONBLE JURISDICTIONAL HIGH COURT AND RELIEF WAS GR ANTED TO THE ASSESSEE IGNORING THE FACT THAT THE ASSESSEE DI D NOT POSSESS ANY CERTIFICATE FROM THE PORT AUTHORITIES E VIDENCING THAT THE STRUCTURES FORM PART OF THE SAID PORT. 2.1. ON THE OTHER HAND, THE LD. COUNSEL FOR THE AS SESSEE CONTENDED THAT THE IMPUGNED ISSUE IS COVERED BY TH E DECISION OF THE TRIBUNAL IN THE CASE OF ASSESSEE IT SELF (ITA NO.273, 275, 943 & 944/MUM/2013) ORDER DATED 28/06/2013. RELIANCE WAS ALSO PLACED UPON THE DECIS ION IN 374 ITR 645 (BOM.) THIS FACTUAL MATRIX WAS NOT CONT ROVERTED BY THE REVENUE. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OB SERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION M ADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY TH E LD. RESPECTIVE COUNSEL, CONCLUSION DRAWN IN THE ORDER O F THE M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 3 TRIBUNAL DATED 28/06/2013, IF KEPT IN JUXTAPOSITION AND ANALYZED, WE FIND MERIT IN THE CONTENTION OF THE LD . COUNSEL FOR THE ASSESSEE, THEREFORE, WE ARE REPRODUCING HER EUNDER THE RELEVANT PORTION FROM THE AFORESAID ORDER OF THE TR IBUNAL:- 4. DEPARTMENT IN ITS APPEALS IS AGITATING ONLY ONE ISSUE WHICH RELATES TO DEDUCTION UNDER SECTION 80 IA(4)(I). IT IS THE CONTENTION OF THE REVENUE THAT LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEES CONTAINER FREIGHT STATION (CFS) IS COVER ED BY THE DECISION OF SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. & OTHERS VS. DCIT, 137 ITD 237 AND C ONTINENTAL WAREHOUSING CORPORATION (NHAVA SEVA) LTD., RAIGAD V S. ACIT (ORDER DATED 31/8/12 IN ITA NO.7055/MUM/2011). IT I S FURTHER THE GRIEVANCE OF THE REVENUE THAT THESE DECISIONS OF TR IBUNAL HAVE NOT BECOME FINAL AND THIS ISSUE IS PENDING BEFORE T HE HONBLE JURISDICTIONAL HIGH COURT FOR ADJUDICATION. 5. SO FAR AS IT RELATES TO GRANT OF DEPRECIATION O N UPS, SCANNERS AND PROJECTORS ATTACHED TO THE COMPUTER(GROUNDS OF APPEAL NO.11 OF ASSESSEES APPEAL FOR A.Y. 2006-07), WE HA VE HEARD BOTH THE PARTIES. LD. A.R RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ORIENT CERAMICS AND INDUSTRIES LTD., 56 DTR 397, COPY OF THE DECISION WAS PLACED O N OUR RECORD AND WAS ALSO GIVEN TO LD. D.R. THE ISSUE WAS DECIDE D BY HONBLE DELHI HIGH COURT AS PER FOLLOWING OBSERVATIONS: 13. THE THIRD ISSUE PERTAINING TO DEPRECIATION ON UPS ARISES ONLY IN THE ASST. YR. 2005-06. THE ASSESSEE HAD CLAIMED DEPRECIATION ON UPS @60 PER CENT WHEREAS TH E AO HAD ALLOWED IT @25 PER CENT AND ON THIS BASIS, DISA LLOWANCE OF RS.1,470 WAS MADE. THE ISSUE NOW STANDS COVERED BY THE JUDGMENT OF THIS COURT IN THE CASE OF CIT VS. BSES YAMUNA M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 4 POWER LTD. (IN IT APPEAL NO.1267 DECIDED ON 31ST AU G., 2010) WHEREIN IT WAS HELD THAT THE DEPRECIATION @ 6 0 PER CENT ON SUCH ITEMS SHALL BE ALLOWED. LD. D.R COULD NOT CITE ANY CONTRARY DECISION OF ANY OTHER HIGH COURT. THEREFORE, FOLLOWING THE AFOREMENTIONED DECI SION WE HOLD THAT ASSESSEE IS ENTITLED TO GET DEPRECIATION ON TH ESE ITEMS @60%. THIS GROUND OF THE ASSESSEE IS ALLOWED. 6. NOW ONLY ONE ISSUE IS LEFT WHICH IS REGARDING EL IGIBILITY OR OTHERWISE OF THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 80IA(4)(I) OF THE ACT FOR ITS BUSINESS ACTIVITY CAR RIED ON IN THE SHAPE OF CONTAINER FREIGHT STATION(CFS). 7. BEFORE PROCEEDING FURTHER IT MAY BE MENTIONED TH AT ASSESSEE STARTED CLAIMING DEDUCTION UNDER SECTION 80 IA(4)(I ) ON CFS OWNED AND OPERATED BY IT W.E.F. A.Y.2004-05. IT HAS BEEN ALLOWED SUCH DEDUCTION FOR A.Y 2004-05 AND 2005-06 AND ALSO FOR A.Y 2006-07. HOWEVER, LATER ON REASSESSMENT PROCEEDINGS WERE INITIATED FOR A.Y 2006-07 AND THE IMPUGNED ASSESSME NT ORDER IS RESULT OF SUCH REASSESSMENT PROCEEDINGS. DURING THE COURSE OF THESE APPEALS IT WAS INFORMED TO US THAT DEPARTMENT HAS INITIATED REASSESSMENT PROCEEDINGS IN RELATION TO A.Y 2005-06 ALSO. ASSESSMENT FOR A.Y 2004-05 HAS ATTAINED FINALITY AS INITIATION OF REASSESSMENT PROCEEDINGS HAVE BECOME TIME BARRED. 8. IT MAY ALSO BE MENTIONED HERE THAT LD. CIT(A) HA S HELD THAT CFS OF THE ASSESSEE IS AN INLAND PORT (IP). FOR HOL DING SO HE HAS FOLLOWED THE DECISION OF SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. & OTHERS VS. DCIT, 137 ITD 23 7 AND CONTINENTAL WAREHOUSING CORPORATION (NHAVA SEVA) LT D. RAIGAD VS. ACIT (ORDER DATED 31/8/12 IN ITA NO.7055/MUM/20 11). THE DECISION OF SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 5 LOGISTICS LTD. HAS BEEN RENDERED IN FAVOUR OF ASSES SEE BY FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD. (CCI) VS. ACIT, 346 ITR 140, WHEREIN QUESTION OF DEDUCTION UNDER SECTION 80 IA(4)(I) IN RESPECT OF INLAND CONTAINER DEPOT (ICD) WAS CONSIDE RED BY HONBLE DELHI HIGH COURT. IT IS OBSERVED BY SPECIAL BENCH IN ITS DECISION THAT THE CASE OF CFS IS SIMILARLY SITUATED WITH THE CASE OF ICD AS BOTH OF THEM CARRIED OUT SIMILAR FUNCTION S I.E. WAREHOUSING, CUSTOMS CLEARANCE AND TRANSPORT OF GOO DS FROM ITS SEA PORT AND VICE VERSA BY RAILWAYS OR BY TRUCKS IN CONTAINERS. IT IS CLEAR FROM THE FOLLOWING OBSERVATIONS OF THE SPE CIAL BENCH: 66. WE FIND THAT THE SOLITARY DECISION IN THIS CA SE BY ANY HIGH COURT IS IN THE CASE OF CONTAINER CORPN. OF IN DIA LTD. (SUPRA). IN THIS CASE IT HAS BEEN HELD THAT AN ICD IS NOT A PORT BUT IT IS AN INLAND PORT. THE CASE OF CFS IS S IMILAR SITUATED IN THE SENSE THAT BOTH CARRY OUT SIMILAR F UNCTIONS, I.E., WARE HOUSING, CUSTOMS CLEARANCE, AND TRANSPOR T OF GOODS FROM ITS LOCATION TO THE SEAPORTS AND VICE-VE RSA BY RAILWAY OR BY TRUCKS IN CONTAINERS. THUS, THE ISSUE IS NO LONGER RES-INTEGRA. RESPECTFULLY FOLLOWING THIS DEC ISION, IT IS HELD THAT A CFS IS AN INLAND PORT WHOSE INCOME IS E NTITLED TO DEDUCTION U/S 80-IA(4). QUESTION NO. 2 IS ANSWERED ACCORDINGLY. (EMPHASIS OURS) 9. THE HISTORY OF LEGISLATION LEADING TO NOTIFY IN LAND WATER WAYS AND INLAND PORTS IN THE DEFINITION OF INFRAS TRUCTURE FACILITY IN SUB-SECTION (12) CLAUSE (CA), W.E.F. 1 /4/1999 HAS BEEN NOTED TO BE INCORPORATED BY FINANCE (NO.2) ACT, 199 8. THE RELEVANT CLAUSE AFTER SUCH AMENDMENT READ AS UNDER: INFRASTRUCTURE FACILITY - MEANS (I) A ROAD, BRID GE, AIRPORT, PORT, INLAND WATERWAYS AND INLAND PORTS, RAIL SYSTE M OR ANY OTHER PUBLIC FACILITY OF A SIMILAR NATURE AS MAY BE NOTIFIED BY THE BOARD IN THIS BEHALF IN THE OFFICIAL GAZETTE E. M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 6 10. BOARD IN ITS CIRCULAR NO.772 DATED 23/12/1995, 235 ITR ST.35,67 IN PARA 43.2 HAS EXPLAINED THE INCLUSION O F INLAND WATERWAYS AND INLAND PORTS. THE DEFINITION OF INF RASTRUCTURE FACILITY IS AS UNDER:- 43.2 THE GOVERNMENT HAS IDENTIFIED NATIONAL WATERWA YS, THE FOURTH MODE OF TRANSPORT, FOR IMPROVING THE TRANSPO RT INFRASTRUCTURE IN THE COUNTRY. INLAND WATERWAYS AND INLAND PORTS PLAY A VITAL ROLE IN IMPROVING A COUNTRYS INFRASTRUCTURE. WITH THE OBJECTIVE OF IMPROVING THE TRANSPORT INFRASTRUCTURE, THE ACT HAS INCLUDED INLAND WATERWA YS AND INLAND PORTS IN THE DEFINITION OF INFRASTRUCTURE F ACILITY AS GIVEN IN SECTION 80-IA. THE UNDERTAKINGS ENGAGED IN THE DEVELOPMENT OF SUCH INFRASTRUCTURE WOULD BE ENTITLE D TO TWO- TIER FISCAL BENEFITS AS OUTLINED ABOVE. (UNDERLINI NG OURS) 11. IN VIEW OF THE AFOREMENTIONED LEGISLATION FOR T HE FIRST TIME FROM A.Y 1999-2000 INLAND PORTS STARTED ENJOYING TH E DEDUCTION UNDER SECTION 80IA AS AN INFRASTRUCTURAL FACILITY. THE OBJECT FOR INSERTION OF THIS PROVISION WAS TO STRENGTHEN AND I MPROVE COUNTRYS INFRASTRUCTURE IN GENERAL AND TRANSPORT I NFRASTRUCTURE IN PARTICULAR. INLAND PORTS FACILITATE THE TRANSPOR T INFRASTRUCTURE BY TAKING CARE OF THE TRANSPORT OF CUSTOMS CLEARED GOODS MEANT FOR EXPORT FROM ICD/CFS TO THE SEA PORT AND THE IMP ORTED GOODS DIRECTLY FROM SEA PORT TO ICD/CFS WHERE THEN CAN BE CUSTOMS CLEARED. THE ENTIRE SECTION WAS RECASTED BY FINANCE ACT 1999 W.E.F.. 1/4/2000 AND EVEN AFTER SEVERAL AMENDMENTS MADE TO THAT SECTION, INLAND PORTS CONTINUE TO ENJOY THE DEDUCTI ON AS INFRASTRUCTURAL FACILITY. 12. REFERENCE CAN ALSO BE MADE TO THE NOTIFICATION ISSUED BY CBDT NO.S.O.744(E) DATED 1/9/1998 FOR THE PURPOSE O F SECTION 80 IA(12) (CA), 233 ITR (ST) 126, THE TEXT OF WHICH IS AS FOLLOWS: M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 7 BOARD OF DIRECT TAXES HEREBY NOTIFIES INLAND CONTA INER DEPOT (ICD) AND CENTRAL FREIGHT STATION (CFS) AS INFRASTRUCTURE FACILITY: PROVIDED THAT SUCH PLACES ARE NOTIFIED AS INLAND CO NTAINER DEPOT AND CENTRAL FREIGHT STATION UNDER SECTION 7(A A) OF THE CUSTOMS ACT, 1962. 13. SUBSEQUENTLY, THE BOARD ISSUED CIRCULAR NO.793 DATED 23/6/2000, 244 ITR (ST) 103 POSTULATED AS FOLLOWS: THE BOARD HAS RECEIVED VARIOUS REPRESENTATIONS SEE KING CLARIFICATION WHETHER STRUCTURES AT PORTS FOR STORA GE, LOADING AND UNLOADING ETC., WILL FALL UNDER THE DEF INITION OF PORT FOR THE PURPOSES OF SECTIONS 10(23G) AND 80-IA OF THE INCOMETAX ACT, 1961. 2. THE BOARD HAS CONSIDERED THE MATTER AND IT HAS B EEN DECIDED, THAT SUCH STRUCTURES WILL BE INCLUDED IN T HE DEFINITION OF PORT FOR THE PURPOSES OF SECTIONS 1 0(23G) AND 80-IA OF THE INCOME-TAX ACT, L IF THE FOLLOWING CONDITIONS ARE FULFILLED: (A) THE CONCERNED PORT AUTHORITY HAS ISSUED A CERTI FICATE THAT THE SAID STRUCTURES FORM PART OF THE PORT, AND (B) SUCH STRUCTURES HAVE BEEN BUILT UNDER BOT AND B OLT SCHEMES AND THERE IS AN AGREEMENT THAT THE SAME WOU LD BE TRANSFERRED TO THE SAID AUTHORITY ON THE EXPIRY OF THE TIME STIPULATED IN AGREEMENT. 14. THIS CIRCULAR WAS ISSUED BY THE BOARD WITH REGA RD TO REPRESENTATIONS SEEKING CLARIFICATION ON WHETHER ST RUCTURES AT PORTS FOR STORAGE, LOADING AND UNLOADING ETC. WOULD FALL WITHIN THE DEFINITION OF PORT, INTER-ALIA, FOR THE PURPOSE OF SECTION 80 IA OF THE ACT. THE BOARD CLARIFIED THAT SUCH STRUCTURE WOULD BE INCLUDED IN THE DEFINITION OF PORT FOR THE PURPOSE OF SECTION 80 IA OF THE ACT, SUBJECT TO THE FULFILLMENT OF THE CONDI TION THAT THE PORT AUTHORITY MUST ISSUE A CERTIFICATE THAT THE STRUCTU RE FORM A PART OF THE PORT; THAT SUCH STRUCTURES HAD BEEN BUILT UNDER THE BOT OR BOLT SCHEME AND THERE IS AN AGREEMENT FOR THE TRANS FER OF THE M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 8 STRUCTURE TO THE AUTHORITY AFTER FULFILLMENT OF THE STIPULATED PERIOD. SUCH CIRCULAR CLEARLY POSTULATED A CONCESSI ON BEING GIVEN IN RESPECT OF A PARTICULAR FACILITY AT PORT, NAMELY , A FACILITY INVOLVED STORAGE, LOADING AND UNLOADING. SUBSEQUENT LY CIRCULAR NO.10 OF 2005 DATED 16/12/2005, 280 ITR (ST) 1 WAS ISSUED BY CBDT WHICH MADE A REFERENCE TO THE EARLIER CIRCULAR DATED 23/6/2000 AND CLARIFIED THAT THE DEFINITION OF THE EXPRESSION PORT, FOR THE PURPOSES OF SECTION 80 IA OF THE AC T, INCLUDES STRUCTURES AT PORTS FOR STORAGE , LOADING AND UNLOA DING ETC., SUBJECT TO FULFILLMENT OF THE CONDITIONS ALREADY NO TED EARLIER, WOULD APPLY TO ASSESSMENT YEAR 2001-02 AND ANY EARL IER ASSESSMENT YEAR. HOWEVER,. FROM ASSESSMENT YEAR 200 3-03 ONWARDS, THE CONDITION REQUIRING THAT STRUCTURE SHO ULD HAVE BEEN COMPLETED UNDER A BOT OR BOLT SCHEME AND THAT THERE SHOULD BE AN AGREEMENT FOR TRANSFER OF THE FACILITY TO THE COMPETENT AUTHORITY ON THE EXPIRY OF THE STIPULATED PERIOD WA S DELETED. THE SAID CIRCULAR IS REPRODUCED BELOW: CIRCULAR NO. : 10 DATE OF ISSUE : 16.12.2005 SECTION(S) REFERRED : 10(23G) 180-IA STATUTE : INCOME-TAX ACT DEFINITION OF PORT AS INFRASTRUCTURE FACILITY FOR THE PURPOSE OF SECTIONS 10(23G) AND 80-IA OF THE INCOME-TAX ACT , 1961 1. REFERENCE IS INVITED TO BOARDS CIRCULAR NO. 79 3, DATED 23-6-2000 AND AMENDMENT IN SECTION 80-IA BY THE FIN ANCE ACT, 2001. 2. PORT, FOR THE PURPOSES OF SECTIONS 10(23G) AN D 80-IA OF THE INCOME-TAX ACT, 1961, INCLUDES STRUCTURES AT THE PORTS FOR STORAGE, LOADING AND UNLOADING ETC., IF THE FOL LOWING CONDITIONS ARE FULFILLED: M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 9 (A) THE CONCERNED PORT AUTHORITY HAS ISSUED A CERT IFICATE THAT THE SAID STRUCTURES FORM PART OF THE PORT, AND (B) SUCH STRUCTURES HAVE BEEN BUILT UNDER THE BOT O R BOLT SCHEMES AND THERE IS AN AGREEMENT THAT THE SAME WOU LD BE TRANSFERRED TO THE SAID AUTHORITY ON THE EXPIRY OF THE TIME STIPULATED IN THE AGREEMENT. THIS DEFINITION IS APPLICABLE TO ASSESSMENT YEAR 20 01-02 AND ANY EARLIER ASSESSMENT YEAR. 3. HOWEVER, FOR AND FROM ASSESSMENT Y 2002-03 ONWAR DS, STRUCTURES AT THE PORTS FOR STORAGE, LOADING AND UN LOADING ETC. WILL BE INCLUDED IN THE E ON OF 10(23G) AND 80 -IA OF THE INCOME-TAX ACT, 1961, IF THE FOLLOWING CONDITION IS FULFILLED: THE CONCERNED PORT AUTHORITY HAS ISSUED A CERTIFICA TE THAT THE SAID STRUCTURES FORM PART OF THE PORT ,CIRCULAR : N O. 10/2005, DATED16-12-2005 15. (I) IN THE PRESENT CASE THE APPROVAL WAS GRANTE D TO THE ASSESSEE VIDE LETTER NO. 16/20/97-INFRA-I DATED 17/ 09/1998 ISSUED BY MINISTRY OF COMMERCE-INFRA-I SECTION TO SET UP C FS AT DRONAGIRI NODE, NAVI MUMBAI, SUBJECT TO CERTAIN CON DITIONS. COPY OF THIS LETTER IS FILED AT PAGE-6 OF THE PAPER BOOK. (II) VIDE LETTER DATED 19/3/2003 COMMISSIONER CUSTO MS EXPORT, NHAVA SEVA, MINISTRY OF FINANCE (DEPARTMENT OF REVE NUE) HAS ISSUED NOTIFICATION NO.4 OF 2003 VIDE WHICH CFS OF THE ASSESSEE IS DECLARED AS CUSTOMS AREA FOR THE PURPOSE OF STOR AGE, STUFFING/DESTUFFING AND CLEARANCE OF EXPORT/IMPORT (BONDED AS WELL AS FOR HOME CONSUMPTION) GOODS. THIS NOTIFICAT ION IS ISSUED IN PURSUANCE TO POWER CONFERRED ON COMMISSIONER OF CUSTOMS EXPORT UNDER SECTION 8 OF THE CUSTOMS ACT, 1962. CO PY OF THIS NOTIFICATION IS PLACED AT PAGE - 8 OF THE PAPER BOO K. (III) ON THE SAME DATE THE SAME AUTHORITY HAS ALSO ISSUED NOTIFICATION NO.5/2003 VIDE WHICH COMMISSIONER OF C USTOMS, UNDER THE PROVISIONS OF SECTION 8 OF THE CUSTOMS AC T, HAS NOTIFIED M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 10 THE CONTAINER ROAD LINKING JNPT/NSICT CONTAINER GAT E, CONTAINER FREIGHT STATION, UNITED LINEAR AGENCIES O F INDIA (P) LTD., SECTOR -8, DRONAGIRI NODE, AS CUSTOMS AREA FOR THE PURPOSE OF TRANSPORT OF IMPORT AND EXPORT CARGO. CO PY OF THIS NOTIFICATION HAS BEEN PLACED AT PAGE 9 OF THE PAPER BOOK. (IV) ON THE SAME DATE NOTIFICATION NO.6/2006 HAS BE EN ISSUED BY THE SAME AUTHORITY AND IT HAS BEEN DECLARED THAT AS SESSEE WILL BE CUSTODIAN OF THE GOODS TILL THEY ARE CLEARED FOR TH E HOME CONSUMPTION OR/ ARE WAREHOUSED OR/ ARE TRANSSHIPPED UNDER THE PROVISIONS OF CHAPTER 8 OF THE CUSTOMS ACT, 1962. C OPY OF THIS NOTIFICATION IS PLACED AT PAGE 10 OF THE PAPER BOOK . (V) VIDE LETTER DATED 26/3/2003, EXECUTIVE ENGINEER OF INDUSTRIAL DEVELOPMENT DIVISION HAS ISSUED OCCUPANCY CERTIFICA TE TO THE ASSESSEE FOR ITS CFS. COPY OF THIS CERTIFICATE IS P LACED AT PAGE 11 OF THE PAPER BOOK. (VI) VIDE LELLER DATED 26/9/2005 THE ASSESSEE SUBMI TTED AN APPLICATION TO THE CHAIRMAN, JAWAHARLAL NEHRU PORT TRUST, NHAVA SEVA, NAVI MUMBAI FOR ISSUE OF CERTIFICATE RE QUIRED BY INCOME TAX DEPARTMENT, COPY OF THIS APPLICATION IS PLACED AT PAGE-15 & 16 OF THE PAPER BOOK. IN THE SAID APPLICA TION IT WAS SUBMITTED BY THE ASSESSEE THAT ITS CFS IS WORKING A T ITS FULL CAPACITY IN THE FIRST YEAR AND ASSESSEE IS PLANNING FOR FURTHER EXPANSION. THE COMMISSIONER OF CUSTOMS HAS DECLARED CFS AS CUSTOMS AREA UNDER SECTION 8 OF THE CUSTOMS ACT, 1962. THE ASSESSEE IS CLAIMING EXEMPTION UNDER SECTION 80 IA FOR ITS CFS. AS A RESULT OF VARIOUS REPRESENTATIONS MADE BY THE ASSOCIATION, CBDT HAS ISSUED A CIRCULAR, ACCORDING TO WHICH THE STRUCTURE PUT UP FOR STORAGE, LOADING AND UNLOADING OF CARGO INTE NDED FOR M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 11 EXPORT WILL FALL UNDER THE DEFINITION OF PORT FOR T HE PURPOSE OF SECTION 10(23G) AND 80 IA IF THE CONCERNED PORT AUT HORITY HAS ISSUED A CERTIFICATE THAT THE SAID STRUCTURE FORM P ART OF THE PORT. COPY OF THE SAID CIRCULAR WAS SUBMITTED. REFERENCE WAS ALSO MADE TO CLAUSE 2(B) OF THE CIRCULAR DATED 23/6/2000 REGARDING AGREEMENT AND TRANSFER UNDER BOT OR BOLT SCHEME AND IT WAS SUBMITTED THAT THE SAID STIPULATION FOR TRANSFER OF FACILITY HAS BEEN WITHDRAWN BY FINANCE ACT 2001. REFERENCE TO CIRCULA R NO.133/95-CUSTOM DATED 22/12/1995 WAS ALSO MADE IN WHICH IN PARA NO.2 IT WAS MENTIONED GENERALLY, CFS IS TAKEN TO BE AN EXTENDED ARM OF PORT AND IT WAS SUBMITTED THAT A C ERTIFICATE BE ISSUED. COPY OF THIS LETTER IS FILED AT PAGE 15-16. (VII) COPY OF CERTIFICATE NO.JNP/CM(O)/2006/830 DA TED 31/3/2006 ISSUED BY JNPT IS PLACED AT PAGES 18 OF T HE PAPER BOOK. THE TEXT OF WHICH IS AS UNDER: JNP/CM(O)/2006/830 DATED: 31ST MARCH,2006 TO WHOMSOEVER IT MAY CONCERN THIS IS TO CERTIFY THAT CONTAINER FREIGHT STATION A CTIVITIES OF M/S. UNITED AGENCIES PVT. LTD. (ULA) LOCATED AT SECTOR 8 OF DRONAGIRI, BHENDKAL VILLAGE, TALUKA URAN, DIST. RAI GAR, NAVI MUMBAI 400 007 MAY BE CONSIDERED AS AN EXTENDED ARM OF THE PORT RELATED ACTIVITIES IN ACCORDANCE WITH CIRCULAR NO.133/95- CUS DATED 22.12.1995 OF CENTRAL BOARD OF EXCISE AND CUSTOMS, NEW DELHI. THEY HAVE COMMENDED THEIR COMMERCIAL OPE RATIONS WITH EFFECT FROM MARCH 2003 VIDE CUSTOMS NOTIFICATI ON NO. 4/2003 DATED 19/03/2003. THE ABOVE SAID CFS IS SITU ATED ON LAND THAT DOES NOT BELONG TO THE PORT. IT IS FURTHER STATED THAT THE CONTAINER FREIGHT ST ATION OF M/S. UNITED LINER AGENCIES PVT. LTD. (ULA) HAS NOT BEEN BUILT UNDER BOT OR BOLT SCHEME AND THERE IS NO AGREEMENT THAT T HE SAID CFS WOULD BE TRANSFERRED TO JNPT ON THE EXPIRY OF T HE TIME M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 12 STIPULATED IN THE AGREEMENT AS PER THE CIRCULAR NO. 793 DATED 23.06.2000 ISSUED BY THE INCOME TAX DEPARTMENT. THIS CERTIFICATE IS ISSUED AT THE REQUEST OF M/S. UNITED AGENCIES PVT. LTD. (ULA) VIDE THEIR LETTER DATED 26.09.2005. SD/- (R.T.REVANKAR) CHIEF MANAGER (0PERATIONS) (EMPHASIS OURS) 16. IN AFORESAID MANNER, THE ASSESSEE HAS STARTED C LAIMING DEDUCTION UNDER SECTION 80IA(4) OF THE ACT AND AS M ENTIONED EARLIER THE ASSESSEE HAS BEEN GRANTED SUCH DEDUCTIO N FOR A.Y 2004-05 AND 2005-06. FOR IMPUGNED ASSESSMENT YEAR 2 006-07 REASSESSMENT PROCEEDINGS WERE INITIATED MAINLY FOR DISALLOWANCE OF THE DEDUCTION AS IN THE OPINION OF REVENUE ASSES SEE IS NOT ENTITLED TO SUCH DEDUCTION AND THE REASONS AS STATE D IN THE ASSESSMENT ORDER FOR MAKING DISALLOWANCE OF THE DED UCTION ARE AS UNDER: (1) DEDUCTION UNDER SECTION 80 IA IS AVAILABLE ONLY TO THE STRUCTURES SITUATED AT THE PORTS AND ASSESSEES CFS BEING NOT SITUATED AT PORT IS NOT ELIGIBLE FOR DEDUCTION. (2) CERTIFICATE ISSUED BY JNPT DATED 31/12/2006 CL EARLY STATED THAT ASSESSEES CFS WAS NOT LOCATED AT THE PORTS L AND, THEREFORE, THE SAID CERTIFICATE WAS NOT MEANT FOR CLAIMING DED UCTION UNDER INCOME TAX ACT. THE ASSESSEE STARTED CONSIDERING IT SELF AS PART OF THE PORT ON ITS OWN. CERTIFICATE ISSUED BY JNPT TO THE ASSESSEE WAS ONLY FOR A LIMITED PURPOSE (CUSTOM PURPOSE) AND THE DESCRIPTION MADE BY JNPT THAT ASSESSEES CFS BEING NOT LOCATED AT THE PORTS LAND THE OTHER CONDITION STIPULATED I N CIRCULAR NO.793 DATED 23/6/2000 WERE ALSO NOT SATISFIED. M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 13 (3) CIRCULAR ISSUED BY CBDT ALSO DESCRIBE STRUCTU RES AT THE PORTS, THEREFORE, EVEN ACCORDING TO CIRCULARS THE CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED. (4) SUBSEQUENTLY, IN THE LETTER OBTAINED FROM JNPT DATED 14/12/2011 IT WAS MADE CLEAR THAT THE SAID CERTIFIC ATE DATED 31/3/2006 WAS SUBSEQUENTLY WITHDRAWN FOR PREVENTING ITS MISUSE AND THUS IT WAS CLEAR THAT ASSESSEE WAS MISUSING TH E LETTER DATED 31/3/2006 ISSUED BY JNPT. THE AFOREMENTIONED CERTIF ICATE ISSUED ON 31/3/2006 WAS WITHDRAWN BY JNPT VIDE LETTER DATE D 5/10/2007 WITH THE FOLLOWING OBSERVATIONS: IT IS HEREBY BROUGHT TO THE NOTICE THAT CERTIFICAT E ISSUED TO M/S. UNITED LINER AGENCIES PVT. LTD. (ULA) VIDE OUR LETTER NO.JNP/CM(O)/2006/830 DTD. 31/03/2006 BASED ON THEI R REQUEST DATED 26.09.2005 IS HEREBY TREATED AS WITHD RAWN FOR THE PURPOSE OF AVAILING ANY BENEFIT UNDER INCOME TA X ACT OR ANY OTHER STATUTORY ACTS IN INDIA. IT SHOULD BE BROUGHT TO THE NOTICE OF ALL CONCERNED TO WHOM IT HAS BEEN PRODUCED FOR THE PURPOSE OF AVAILING AN Y CONCESSION /BENEFIT. 5. SUBSEQUENT LETTERS ISSUED BY JNPT HAVE ALSO ESTA BLISHED THAT THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION UND ER SECTION 80IA(4), SUCH AS (I) LETTER DATED 8/12/2011 CFS S TRUCTURE OF THE ASSESSEE DOES NOT FORM PART OF THE JNPT I.E. PO RT; (II) LETTER DATED 29/11/2011 VIDE WHICH IT WAS CLEARLY MENTIONE D THAT DISTANCE OF THE ASSESSEES CFS FROM JNPT IS 15 KMS. AWAY FROM THE PORT AND THEY HAVE ALSO MENTIONED THAT ASSESSEE S CFS IS PROVIDING THE SERVICES OF STORAGE, STUFFING, DESTUF FING AND CLEARANCE OF IMPORT AND EXPORT OF GOODS. (6) FOLLOWING OBSERVATIONS OF CBDT IN ITS LETTER DA TED 6/1/2011 DEBARS THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTIO N 80 IA(4)(I) OF THE ACT IN WHICH IT WAS MENTIONED THAT ICDS AND CFS NOT M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 14 LOCATED AT THE PORT ARE NOT A PART OF THE PORT FOR THE PURPOSE OF SECTION 80 IA(4) : AN ICD OR A CFS IS USUALLY NOT LOCATED AT THE PORT AND THEREFORE IT IS NOT A PART OF THE PORT FOR THE PURP OSE OF SECTION 80IA(4)(I) AND NOT COVERED BY THE CIRCULAR NO.10/2005 DATED 16/12/2005 AND CIRCULAR NO.793 DAT ED 23.06.2000 ON THE SUBJECT. REFERENCE HAVE ALSO BEEN RECEIVED AS TO WHETHER I NLAND CONTAINER DEPOTS (ICDS) AND CONTAINER FREIGHT STATI ON (CFS) CAN BE TERMED AS INLAND PORTS AND THEREBY CLA SSIFIED AS INFRASTRUCTURE FACILITY UNDER SECTION 80IA(4)(II ) OF THE INCOME TAX ACT, 1961. IN THIS CONTEXT, I AM FURTHER DIRECTED TO CONVEY THAT THE BOARD HAS CONSIDERED THE SAME AN D IT HAS BEEN DECIDED THAT AND ICDS AND CFS ARE NOT PORTS LO CATED ON ANY INLAND WATERWAY, RIVER OR CANNAL, AND THEREB Y THEY CANNOT BE CLASSIFIED AS INLAND PORTS FOR THE PURPOS E OF SECTION 80IA (4)(I) OF THE INCOME TAX ACT. 17. IN THE ABOVE MANNER A.O HAS DISCARDED THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE LD. CIT( A). THE SUBMISSIONS MADE BEFORE A.O WERE REITERATED BEFORE LD. CIT(A). REFERENCE WAS MADE TO THE FOLLOWING DECISIONS: (A) ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT,137 IT D 287 (SB) (B) CONTINENTAL WAREHOUSING CORPORATION VS. ACIT, O RDER DATED 31/8/2012 IN ITA NO.7055/MUM/2011, C BENCH MUMBAI , COPY PLACED AT PAGE 17 TO 27 OF THE PAPER BOOK. (C) CONTAINER CORPORATION OF INDIA LTD. VS. ACIT, 346 ITR 140(DEL) 18. CONSIDERING ALL THE AFOREMENTIONED DECISIONS LD . CIT(A) HAS HELD THAT CFS OF THE ASSESSEE IS AN INLAND PORT W ITHIN THE MEANING OF EXPLANATION (D) TO SECTION 80 IA(4)(I) O F THE ACT AND INLAND PORT IS ONE OF THE INFRASTRUCTURE FACILITY WHICH IS M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 15 ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80 IA(4). HOWEVER, THE ASSESSEE DID NOT FULFILL OTHER CONDITIONS SPECIFIED IN SECTION 80IA(4). IN THIS REGARD LD. CIT(A) HAS REFERRED TO THE PROVISIONS OF SECTION 80IA(4) OF THE ACT AND ALSO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ABG HEAVY INDUSTRIES LTD., 322 ITR 323 (BOM). THE LD. CIT(A) HAS ARRIVED AT THE CONCLUSION THAT AS ASSESSEE DID NOT ENTER INTO AN A GREEMENT WITH THE AUTHORITY, WHICH IS MANDATORY CONDITION, THEREF ORE, THE ASSESSEE IS NOT ENTITLED TO GET DEDUCTION UNDER SEC TION 80IA(4). LD. CIT(A) HAS MENTIONED THAT IN NONE OF THE DECISI ONS RELIED UPON BY THE ASSESSEE IT HAS BEEN HELD THAT THERE IS NO REQUIREMENT TO ENTER INTO AN AGREEMENT AS PROVIDED IN CLAUSE (B ) OF SECTION 80 IA(4)(I) OF THE ACT. THEREFORE, FOR WANT OF FULFILL MENT OF CONDITION LAID DOWN IN SECTION 80 IA(4)(I)(B) LD. CIT(A) HAS DECIDED THE ISSUE AGAINST THE ASSESSEE. 19. THE ASSESSEE IN ITS APPEAL IS AGITATING THE DEC ISION OF LD. CIT(A) REGARDING NON-FULFILLMENT OF CONDITION LAID DOWN IN SUB- CLAUSE(B) OF SECTION 80 IA(4)(I). THE DEPARTMENT IN ITS APPEAL IS AGITATING TO THE DECISION OF LD. CIT(A) VIDE WHICH ASSESSEES CFS HAS BEEN HELD TO BE INLAND PORT. 20. BOTH THE PARTIES HAD ARGUED THIS ISSUE AT LENGT H AND THEIR SUBMISSIONS IN BRIEF ARE AS UNDER: 21. LD. A.R AFTER REITERATING THE SUBMISSIONS AS MA DE BEFORE AUTHORITIES BELOW SUBMITTED THAT THERE IS NO SPECIF IC REQUIREMENT LAID DOWN IN SECTION 80 IA(4)(IB) THAT AGREEMENT SH OULD BE IN WRITING. AN ORAL AGREEMENT IS SUFFICIENT AND THAT C AN BE SEEN IN THE FORM OF CORRESPONDENCE AND APPROVALS OBTAINED B Y THE ASSESSEE FROM FINANCE MINISTRY, COMMERCE MINISTRY A ND JNPT. M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 16 THE WORD APPROVE AS PER OXFORD DICTIONARY MEANS OFFICIAL ACCEPT AS SATISFACTORY. THE WORD APPROVAL MEANS THE ACTION OF APPROVING. AS PER BLACKS LAW DICTIONARY THE WOR D APPROVE IS DEFINED AS TO GIVE FORMAL SANCTION; TO CONFIRM AUTHORITATIVELY. THUS IT IS THE CASE OF LD. AR THA T APPROVAL MEANS THAT THERE IS AN AGREEMENT. HE IN THIS REGARD REFERRED TO THE LETTERS ISSUED BY FINANCE MINISTRY, COMMERCE MI NISTRY AND JNPT, COPIES OF WHICH ARE PLACED AT PAGES 6- 8,9,10 ,17 &18 OF THE PAPER BOOK, WHICH SHOWS THE APPROVAL WAS ACCORD ED BY VARIOUS AUTHORITIES. BY FINANCE ACT (NO.2) THE NECE SSITY TO HAVE AN AGREEMENT TO TRANSFER INFRASTRUCTURE FACILITY UN DER BOT/BOLT WAS REMOVED. REFERENCE WAS MADE TO THE MEMORANDUM O F EXPLAINING FINANCE BILL, 248 ITR 166(ST), WHEREIN I T WAS MENTIONED IT IS ALSO PROPOSED TO DO AWAY WITH THE MANDATORY REQUIREMENT THAT SUCH INFRASTRUCTURE FACILITY SHALL BE TRANSFERRED TO THE CENTRAL GOVERNMENT, STATE GOVERNMENT, LOCAL AUTHORITY OR ANY OTHER STATUTORY AUTHORITY. THE AMENDMENT WAS MADE APPLICABLE FROM ASSESSMENT YEAR 2002-03 ONWARDS. IT WAS FURTHER ARGUED BY LD AR THAT AS PER SECTION 2(B) OF THE CON TRACT ACT AN AGREEMENT DOES NOT NEED TO BE IN WRITING. AS PER PR OVISIONS OF SECTION 164A ORAL TRUST ARE TAXED AT MAXIMUM MARGIN AL RATE. EVEN ACCORDING TO SECTION 194C TAX IS LIABLE TO BE DEDUCTED EVEN IN A CASE WHERE CONTRACT IS NOT REDUCED INTO WRITIN G. 22. LD AR FURTHER ARGUED THAT ACCORDING TO THE PRIN CIPLE OF CONSISTENCY, AS DEPARTMENT HAS GRANTED THE DEDUCTIO N TO THE ASSESSEE IN A.Y 2004-05, THE SAME CANNOT BE WITHDRA WN FOR SUBSEQUENT YEARS. FOR THIS PURPOSE LD. A.R HAS REFE RRED TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. PAUL BROTHERS 216 ITR 548(BOM), WHEREIN DEDUCTION U NDER M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 17 SECTION 80 HH AND 80J WAS GRANTED FOR A.Y 1980-81 A ND SUBSEQUENTLY THESE DEDUCTIONS WERE SOUGHT TO BE WIT HDRAWN UNDER SECTION 263 BY CIT. IT WAS HELD BY THE HONBL E HIGH COURT THAT EITHER IN SECTION 80HH OR IN SECTION 80J THERE IS NO PROVISION FOR WITHDRAWAL OF SPECIAL DEDUCTION FOR T HE SUBSEQUENT YEARS FOR BREACH OF CERTAIN CONDITIONS. HENCE, UNLE SS RELIEF GRANTED FOR A.Y 1980-81 WAS WITHDRAWN, ITO COULD NO T HAVE HELD THE RELIEF FOR THE SUBSEQUENT YEARS. FOR HOLDI NG SO THEIR LORDSHIP HAVE FOLLOWED THE DECISION OF HONBLE GUJA RAT HIGH COURT IN THE CASE OF SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LTD., 123 ITR 669. REFERENCE WAS ALSO MADE TO THE F OLLOWING OBSERVATIONS FROM THE SAID DECISION OF HONBLE HIGH COURT. EITHER IN SECTION 8OHH OR IN SECTION 80J, THERE I S NO PROVISION FOR 1 WITHDRAWAL .OF SPECIAL DEDUCTION FO R THE SUBSEQUENT YEARS FOR BREACH OF CERTAIN CONDITIONS. HENCE UNLESS. THE RELIEF GRANTED FOR, THE ASSESSMENT YEAR 1980-81 WAS WITHDRAWN, THE INCOME-TAX OFFICER COULD NOT HAV E WITHHELD THE RELIEF FOR THE SUBSEQUENT YEARS. [SEE GUJARAT HIGH COURT DECISION IN THE CASE OF SAURASHTRA CEMEN T AND CHEMICAL INDUSTRIES LTD. V.CIT [1980] 123 ITR 669]. 23. IT WAS SUBMITTED THAT THE GRANT OF DEDUCTION IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS RELIED UPON BY THE ASSESSEE BEFORE LD. CIT(A) AND VARIOUS CIRCULAR S ISSUED BY CBDT AND IT HAS WRONGLY BEEN DISALLOWED BY LD. CIT (A) SIMPLY ON THE BASIS OF NON-EXISTENCE OF AGREEMENT. LD. AR SUBMITTED THAT THE FACTS OF THE ASSESSEES CASE ARE SIMILAR TO THE FACTS OF THE CASES IN WHICH THE ASSESSEES OWNING CFS HAVE BEEN A LLOWED SIMILAR DEDUCTION BY THE SPECIAL BENCH. REFERENCE W AS MADE TO THE DECISION OF ITAT IN THE CASE OF CONTINENTAL WAR EHOUSING CORPORATION VS. ACIT(SUPRA), WHERE THE FACT OF NON- EXISTENCE OF AGREEMENT WAS ALSO NOTED AS IT WAS ONE OF THE GROUN D TAKEN BY M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 18 AO FOR DISALLOWANCE OF DEDUCTION. THUS IT WAS PLEAD ED BY LD. A.R THAT THE CLAIM OF DEDUCTION HAS WRONGLY BEEN DE NIED AND IT SHOULD BE ALLOWED TO THE ASSESSEE. 24. THE ARGUMENTS OF LD. DR IN REPLY TO THE LD. AR S ARGUMENTS AS WELL AS ARGUMENTS WITH REGARD TO THE APPEALS FIL ED BY THE REVENUE ARE AS UNDER: 24.1 LD. D.R SUBMITTED THAT AO WAS RIGHT IN HOLDIN G THAT ASSESSEES STRUCTURE OF CFS NOT BEING SITUATED AT P ORT IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80 IA(4) OF TH E ACT. HE SUBMITTED THAT IN THE CIRCULARS THE WORD USED BY CB DT ARE AT PORT, THEREFORE, EVEN ACCORDING TO THOSE CIRCULARS ASSESSEES CFS BEING SITUATED AT A DISTANCE OF 15 KMS FROM THE MAIN PORT CANNOT BE CONSIDERED TO BE ELIGIBLE FOR DEDUCTION U NDER SECTION 80 IA(4). LD. D.R SUBMITTED THAT CERTIFICATE GRANTE D BY JNPT WAS SUBSEQUENTLY WITHDRAWN AND, THEREFORE, THE SAID CER TIFICATE DATED 31/3/2006 DOES NOT ADVANCE THE CASE OF THE ASSESSEE IN VIEW OF ITS WITHDRAWAL IN THE YEAR 2007. LD. D.R MADE REFERENCE TO THE CLARIFICATION ISSUED BY CBDT DATED 6/1/2011 VIDE WH ICH IT WAS CLARIFIED THAT CFS STRUCTURES WHICH ARE NOT SITUATE D AT PORT ARE NOT ENTITLED FOR DEDUCTION UNDER SECTION 80 IA(4). THUS, IT WAS PLEADED BY LD. DR THAT ASSESSEES CFS DOES NOT COME WITHIN THE DEFINITION OF PORT OR INLAND PORT. 24.2 LD. D.R FURTHER SUBMITTED THAT THE ARGUMENTS R AISED BY LD. AR REGARDING CONSISTENCY ALSO DOES NOT SUPPORT THE CASE OF THE ASSESSEE AS THE PRINCIPLE OF CONSISTENCY REST UPON DOCTRINE OF RES- JUDICATA WHICH ACCORDING TO THE WELL ESTABLISHED LA W IS NOT APPLICABLE TO INCOME TAX MATTERS. REFERENCE WAS MAD E TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NE W JAHANGIR M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 19 VAKIL MILL COMPANY LTD. VS. CIT 49 ITR 137 (SC), WH EREIN IT WAS HELD BY THE COURT THAT REVENUE CAN REOPEN A QUESTIO N OBVIOUSLY DECIDED IF FRESH FACTS COME TO LIGHT OR IF EARLIER DECISION WAS RENDERED WITHOUT TAKING INTO CONSIDERATION MATERIAL EVIDENCE ETC. SIMILAR PROPOSITION WAS LAID DOWN IN THE DECISION I N THE CASE OF BROKEN HILL PROPRIETARY COMPANY VS. BROKEN HILL MUN ICIPAL COUNCIL (1926) AC 94 AND HOYSTEAD VS. COMMISSIONER OF TAXATION (1926) AC 155. REFERRING TO ABOVE DECISION S IT WAS PLEADED BY LD. D.R THAT THERE IS NO ESTOPPELS IN IN COME TAX MATTER AND EACH YEAR IS ASSESSABLE INDEPENDENTLY OF THE EARLIER YEARS. THE AO CAN TAKE A POSITION ON THE EARLIER YE ARS INCOME, WITHOUT REOPENING THOSE YEARS, FOR ASSESSING THE NA TURE OF THE CURRENT YEARS INCOME AND RELIANCE WAS PLACED ON THE DECISION IN THE CASE OF M.M. IPOH VS. CIT, 67 ITR 103(SC),DWARA KADAS KESARDEO MURARKHA VS. CIT, 44 ITR 529. REFERENCE WA S ALSO MADE TO THE DECISION OF HONBLE BOMBAY HIGH COURT I N THE CASE OF BAIJNATH BRIJMOHAN & SONS LTD. VS. CIT, 161 ITR 234, WHEREIN THEIR LORDSHIPS HAVE OBSERVED AS UNDER: AN ASSESSMENT FOR A PARTICULAR YEAR IS FINAL AND C ONCLUSIVE BETWEEN THE PARTIES ONLY IN RELATION TO THAT YEAR A ND THE DECISION GIVEN IN AN ASSESSMENT FOR AN EARLIER YEAR IS NOT BINDING EITHER ON THE ASSESSEE OR THE DEPARTMENT IN A SUBSEQUENT YEAR. BUT THIS RULE IS SUBJECT TO LIMITA TIONS, FOR THERE SHOULD BE A FINALITY AND CERTAINTY IN ALL LIT IGATIONS INCLUDING LITIGATION ARISING OUT OF THE INCOME-TAX ACT, AND AN EARLIER DECISION ON THE SAME QUESTION CANNOT BE REOPENED IF THAT DECISION IS NOT ARBITRARY OR PERVE RSE, IF IT HAD BEEN ARRIVED AT / AFTER DUE INQUIRY, IF NO FRES H FACTS WERE PLACED BEFORE THE TRIBUNAL GIVING THE LATER DECISIO N AND IF THE TRIBUNAL GIVING THE EARLIER DECISION HAS TAKEN INTO CONSIDERATION ALL MATERIAL EVIDENCE. THERE IS ALSO A FURTHER LIMITATION, NAMELY, THAT THE EFFECT OF REVISING A D ECISION IN A SUBSEQUENT YEAR SHOULD NOT LEAD TO INJUSTICE AND TH E COURT MUST ALWAYS BE ANXIOUS TO AVOID INJUSTICE TO THE AS SESSEE. IN M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 20 THE PRESENT CASE, WE HAVE TO BEAR IN MIND THAT THE AUTHORITY WHICH CHANGED ITS STAND WAS NOT THE INCOME-TAX APPE LLATE TRIBUNAL BUT THE INCOME-TAX OFFICER. QUITE APART FR OM THIS, IN THE PRESENT CASE, THE TRIBUNAL TOOK THE VIEW THA T THE EARLIER VIEW TAKEN BY THE INCOME-TAX AUTHORITIES AP PEARED TO BE PATENTLY UNWARRANTED ON THE FACTS. IN FACT, AS T HE TRIBUNAL HAS POINTED OUT IN PARAGRAPH 6 OF ITS ORDE R, THE FACTS ESTABLISHED BY THE ASSESSEE WERE SO SCANTY AN D SO MUCH AGAINST THE ASSESSEE THAT THE TRIBUNAL WAS LEF T WITH NO OPTION BUT TO HOLD THAT THE ACTION OF THE INCOME-TA X AUTHORITIES WAS CORRECT. 24.3 LD. D.R FURTHER REFERRED TO THE DECISION OF IT AT MUMBAI BENCH IN THE CASE OF ACIT VS. HITESH S. BHAGAT ORDE R DATED 15/5/2013 IN ITA NO.6586/MUM/2010, WHEREIN FOLLOWIN G AFOREMENTIONED DECISION OF HONBLE SUPREME COURT IN THE CASE OF NEW JAHANGIR VAKIL MILL COMPANY LTD. VS. CIT(SUPRA) IT WAS HELD THAT DOCTRINE OF RES-JUDICATA IS NOT APPLICABL E. LD. DR ALSO REFERRED TO THE DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF B.R. CONSTRUCTION, 73 TAXMANN 473(AP )(FB) TO CONTEND THAT PRECEDENT CEASES TO BE BINDING PRECEDE NT IN THE FOLLOWING CONDITIONS: 29. IT MAY BE NOTICED THAT PRECEDENT CEASES TO BE BINDING PRECEDENT- (I) IF IT IS REVERSED OR OVERRULED BY A HIGHER COUR T, (II) WHEN IT IS AFFIRMED OR REVERSED ON A DIFFERENT GROUND; (III) WHEN IT IS INCONSISTENT WITH THE EARLIER DEC ISIONS OF THE SAME RANK (IV) WHEN IT IS SUB SILENTIO AND (V) WHEN IT IS RENDERED PER INCURIAM. LD DR ALSO REFERRED TO THE DECISION OF AHMEDABAD IT AT IN THE CASE OF KANEL OIL & EXPORT INDUSTRIES LTD. VS. JCIT , 121 ITD 596, WHEREIN IT WAS HELD THAT JUDGMENT OF NON-JURIS DICTIONAL M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 21 HIGH COURT WOULD PREVAIL UPON THE SPECIAL BENCH DEC ISION ON THE BASIS OF PRINCIPLE THAT HIGH COURT IS ABOVE THE TRIBUNAL IN JUDICIAL HIERARCHY. LD. DR ALSO RELIED UPON THE DEC ISION OF K.P. CHOUDHARY VS. STATE OF MADHYA PRADESH, 1967 AIR 203 (SC) TO CONTEND THAT CONTRACT WITH THE GOVERNMENT SHOULD BE EXECUTED IN THE MANNER PROVIDED IN ARTICLE 299(1) OF THE CONSTI TUTION OF INDIA AND UNLESS IT IS SO EXECUTED IT WILL NOT BE A BINDING CONTRACT. THUS IT WAS PLEADED BY LD. DR THAT ASSESS EES CONTENTION THAT THERE COULD BE AN ORAL AGREEMENT SH OULD NOT BE ACCEPTED. IN THIS MANNER LD. D.R CONCLUDED HIS ARGU MENTS. 25. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES. WE HAVE ALSO CAREFULLY GONE THROUGH THE AS SESSMENT ORDER AS WELL AS ORDER PASSED BY LD. CIT(A). WE HAV E ALSO CAREFULLY GONE THROUGH THE PAPERS AND DOCUMENTS REF ERRED BEFORE US ALONG WITH CASE LAWS RELIED UPON BY BOTH THE PAR TIES. IT IS THE MAIN CASE OF AO THAT ASSESSEES CFS NOT BEING STRUC TURE SITUATED AT PORT IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTI ON 80IA(4) OF THE ACT. ACCORDING TO A.O EVEN IN THE CIRCULARS ISS UED BY CBDT THE STRESS IS ON THE STRUCTURE SITUATED AT PORT. TH E CERTIFICATE ISSUED BY JNPT WAS LATER ON WITHDRAWN AND SUBSEQUEN TLY CBDT VIDE ITS CIRCULAR DATED 6/1/2011 HAS MADE IT CLEAR THAT STRUCTURES AT PORT IN THE SHAPE OF CFS AND ICDS ARE ONLY ELIGI BLE FOR DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. SO FAR AS IT RELATES TO ALL THESE ISSUES RAISED BY THE AO TO DENY THE DEDUC TION TO THE ASSESSEE, WE FIND THAT ALL THESE ISSUES WERE RAISED BY THE REVENUE WHILE AGITATING THE GRANT OF SIMILAR DEDUCTION TO T HE OTHER ASSESSEES IN SIMILAR CASES. DESPITE ALL THESE ARGUM ENTS OF THE REVENUE, SPECIAL BENCH HAS HELD THAT ASSESSEES ARE ENTITLED FOR DEDUCTION UNDER SECTION 80IA(4) . TO MAKE IT CLEAR THAT ALL THESE M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 22 ISSUES WERE RAISED BY THE REVENUE BEFORE THE SPECIA L BENCH, WE MAY REFER TO THE FOLLOWING OBSERVATIONS OF THE SPEC IAL BENCH: 63. THE SUBMISSION OF THE LD. COUNSEL IN THE CASE O F ALL CARGO GLOBAL LOGISTICS LTD. IS THAT THE HONBLE DEL HI HIGH COURT HAS HELD THAT ICDS ARE LANDLOCKED AND SITUATE D FAR OFF FROM THE SEA PORT SUCH. THE ICDS OF THE CONTAINER CORPORATION OF INDIA ARE LOCATED AT PLACES SUCH AS JAMSHEDPUR, JODHPUR, JAIPUR, ETC. THESE HAVE BEEN H ELD TO BE INLAND PORTS FOR THE PURPOSE OF DEDUCTION U/S 80 1A(4). THE CASE OF THE ASSESSEE IS BETTER PLACED THAN THE CASE OF CONTAINER CORPORATION OF INDIA LTD. IN AS MUCH AS I T IS SITUATED 5 KMS AWAY FROM THE PORT AND IT IS A PART OF THE PORT FOR CARRYING OUT ACTIVITIES MENTIONED EARLIER. CUST OMS- CLEARANCE TAKES PLACE FROM ASSESSEES CFS. THEREFOR E, IT IS ARGUED THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U /S 801A. 64. IN REPLY, THE LD. STANDING COUNSEL SUBMITTED TH AT WHENEVER THE ASSESSEE CLAIMS AN INCOME TO BE EXEMPT FROM TAX OR CLAIMS A DEDUCTION, THE PRE-CONDITIONS FOR E XEMPTION OR DEDUCTION HAVE TO BE STRICTLY SATISFIED BY HIM, AS HELD IN THE CASE OF M/S. NOVOPAN INDIA LTD., HYDERABAD VS. COLLECTOR OF CENTRAL EXCISE AND CUSTOMS, HYDERABAD (1994)3SCC 606. IN RESPECT OF THIS DECISION, HE LAI D STRESS ON THE FINDING THAT LIBERAL AND STRICT CONSTRUCTION OF EXEMPT PROVISION ARE TO BE INVOKED AT DIFFERENT STAGES OF ITS INTERPRETATION. WHEN THE QUESTION IS WHETHER A SUBJ ECT FALLS IN THE NOTIFICATION OR IN THE EXEMPTION CLAUSE THEN IT BEING IN THE NATURE OF EXEMPTION IS TO BE CONSIDERED STRICTL Y AND AGAINST THE SUBJECT BUT ONCE THE AMBIGUITY OR DOUBT ABOUT APPLICABILITY IS LIFTED AND THE SUBJECT FALLS IN TH E NOTIFICATION THEN FULL PLAY SHOULD BE GIVEN TO IT AND IT CALLS F OR A WIDER AND LIBERAL CONSTRUCTION. IN THE LIGHT OF THIS DECI SION, HE DEALT WITH THE CLAIM OF THE ASSESSEE U/S 8O(IA). IT IS SUBMITTED THAT IN BOARD CLARIFICATION DATED 6.1.201 1, IN WHICH CIRCULARS DATED 16.12.2005 AND 23.6.2000 WERE CONSIDERED, IT HAS BEEN CLARIFIED THAT ICDS, AND CF SS ARE NOT PORTS LOCATED ON ANY INLAND WATER WAY , RIVER OR CANAL AND THEREFORE THEY CANNOT BE CLASSIFIED AS INLAND PORTS FOR THE PURPOSE OF SECTION 80(IA)(4). IT IS FURTHER SUBMITTED THAT THE CERTIFICATE ISSUED BY JAWAHAR LA! NEHRU PO RT TRUST HAS BEEN WITHDRAWN BY THE PORT TRUST. IT IS ALSO SU BMITTED THAT INLAND WATERWAYS AUTHORITY OF INDIA ACT, 1985, M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 23 PROVIDES THE DEFINITION OF THE TERM INFRASTRUCTURE FACILITIES, IN ITS CLAUSES (F), AS THE STRUCTURES SUCH AS DOCKS, WHARVES, JETTIES, STAGES, LOCKS, BUOYS, INLAND PORT S, CARGO HANDLING EQUIPMENTS, ROAD AND RAIL ACCESS AND CARGO STORAGE SPACES AND STATES THAT THE EXPRESSION INFRASTRUCTURE FACILITIES SHALL BE CONSTRUED ACCO RDINGLY. IN THIS ACT, INLAND PORT IS INCLUDED AS ITEM, THUS, THIS TERM HAS A DISTINCT MEANING, SEPARATE AND APART FROM OTH ER TERMS. THEREFORE, ICDS AND CFSS CANNOT BE INTERPRET ED TO BE INCLUDED IN THE TERM INLAND PORT. IT IS ALSO S UBMITTED THAT CIRCULAR NO. 74/97- CUS. DATED 30.12.97 OF THE CENTRAL BOARD OF EXCISE AND CUSTOMS MAKES A DISTINCTION BET WEEN INLAND PORTS AND ICDS /CFSS FOR GRANT OF DUTY DRAW BACK BENEFIT. IT IS ALSO SUBMITTED THAT A STUDY PREPARED BY TRANSPORT AND TOURISM DIVISION OF ECONOMIC AND SOCI AL COMMISSION FOR ASIA AND PACIFIC (A DIVISION OF THE UNITED NATIONS) PROVIDES AN INSIGHT IN THE CONCEPT OF INL AND PORT VIS. A VIS. SEA PORT. IT IS MENTIONED THERE THAT ACCESS SHOULD BE PROVIDED TO INLAND PORTS THROUGH WATERWAY S FROM SEA BY DEVELOPING THEM. 65. WE HAVE CONSIDERED THE FACTS OF THE CASES AND SUBMISSIONS MADE BEFORE US. IT MAY BE MENTIONED THA T ONE OF THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR TH E ASSESSEE IS THAT THE CASE OF CONTAINER CORPORATION OF INDIA IS NOT BASED ON ANY OF THE CIRCULARS ISSUED BY THE PORT AUTHORITIES, HOWEVER, THE CFS THE ASSESSEE HAS BEEN GRANTED SUCH CERTIFICATE. THE CERTIFICATE MENTIONS THAT THE CFS CARRIES ON PORT RELATED ACTIVITIES, AND IT MAY BE C ONSIDERED AS AN EXTENDABLE ACTIVITY OF THE PORT RELATED ACTIV ITIES. IT IS CLARIFIED THAT THE CFS HAS NOT BEEN BUILT ON BOT OR BOLT SCHEME AND THAT IT IS SITUATED ON LAND WHICH DOES N OT BELONG TO THE PORT. THE LETTERS WRITTEN BY PORT TRUST TO T HE ASSESSEE ALSO STATE THAT THE MATTER HAS BEEN REFERRED TO THE INCOME TAX DEPARTMENT. THE DEPARTMENT HAS CLARIFIED THAT A N ICD/CFS DOES NOT CONSTITUTE AN INLAND PORT. IN THE CASE OF CIT VS. ABG HEAVY INDUSTRIES LTD., 189 TAXMAN 54, T HE HONBLE COURT HAS HELD THAT THE ASSESSEE IS ENTITLE D TO DEDUCTION U/S 801A. HOWEVER THERE IS A VERY SALIENT DIFFERENCE IN FACTS THAT STRUCTURES WERE LOCATED AT PORT AND SUCH STRUCTURES HAD TO BE HANDED OVER TO THE PORT T RUST ON EXPIRY OF THE PERIOD OF AGREEMENT. IN THE CASE AT H AND IT IS CLEAR THAT THE ASSETS OF THE CFS ARE NOT TO BE HAND ED OVER TO THE PORT TRUST AT ANY POINT OF TIME AS IT IS NOT BU ILT ON BOT M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 24 & BOLT SCHEME. THE CFS IS ALSO NOT LOCATED AT THE P ORT. AS AGAINST THE AFORESAID, THE LD. STANDING COUNSEL HAS SUBMITTED THAT CLARIFICATIONS ISSUED BY OTHER AUTHO RITIES INCLUDING CENTRAL BOARD OF EXCISE AND CUSTOMS UNDER THE RELEVANT ACTS DO NOT LAY GUIDELINES UNDER THE INCOM E TAX ACT AND THAT THE MATTER HAS TO BE DECIDED UNDER THE INCOME TAX ACT INDEPENDENTLY. FOR DOING SO, INITIALLY A ST RICT INTERPRETATION HAS TO BE PLACED ON THE WORDS INLAN D PORT TO EXAMINE THAT THE ASSESSEE IS ENTITLED TO THE DED UCTION. CBDT HAS FURNISHED OPINION THAT ICDS AND CFSS ARE N OT ENTITLED TO SUCH DEDUCTION AS THEY DO NOT CONSTITUT E INLAND PORTS. OTHER ACTS AS WELL AS STUDY REPORT LEAD TO T HE CONCLUSION THAT A PORT CAN BE SAID TO BE AN INLAND PORT ONLY IF IT HAS AN ACCESS TO THE SEA VIA A WATER-WAY. 66. WE FIND THAT THE SOLITARY DECISION IN THIS CAS E BY ANY HIGH COURT IS IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD., IN THIS CASE IT HAS BEEN HELD THAT AN ICD IS NOT A PORT BUT IT IS AN INLAND PORT. THE CASE OF CFS IS SIMILA R SITUATED IN THE SENSE THAT BOTH CARRY OUT SIMILAR FUNCTIONS, I.E., WARE HOUSING, CUSTOMS CLEARANCE, AND TRANSPORT OF GOODS FROM ITS LOCATION TO THE SEAPORTS AND VICE-VERSA BY RAILWAY OR BY TRUCKS M CONTAINERS. THUS, THE ISSUE IS NO LONGER R ES-INTEGRA. RESPECTFULLY FOLLOWING THIS DECISION, IT IS HELD TH AT A CFS IS AN INLAND PORT WHOSE INCOME IS ENTITLED TO DEDUCTIO N U/S 80IA(4). QUESTION NO. 2 IS ANSWERED ACCORDINGLY. (EMPHASIS GIVEN BY US) 25.1 THE RELEVANT PORTION OF THE SPECIAL BENCH DECI SION HAVE BEEN EMPHASIZED TO SHOW THAT THE ARGUMENTS OF A.O A ND LD. D.R IN THE PRESENT CASE ARE SIMILAR TO THE ARGUMENTS RA ISED BY REVENUE BEFORE SPECIAL BENCH. BEFORE SPECIAL BENCH IT WAS THE CASE OF THE ASSESSEE THAT OF CFS OWNED BY THEM ARE BETTER PLACED AS ICDS CONSIDERED IN THE CASE OF CONTAINER CORPORA TION OF INDIA(SUPRA) WERE LOCATED FAR AWAY AT THE PLACES LI KE JAMESHEDPUR, JODHPUR,JAIPUR ETC. THE CFS WERE SITUA TED NEARLY 5 KMS AWAY FROM THE PORT. IN THE PRESENT CASE ALSO CFS OF THE ASSESSEE IS SITUATED ONLY 15 KMS AWAY FROM THE PORT . SO FOR THE M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 25 GRANT OF DEDUCTION UNDER SECTION 80 IA(4), AS PER D ECISION OF SPECIAL BENCH IN THE CASE OF ALL CARGO (SUPRA) AND DECISION OF DELHI HIGH COURT IN CONTAINER CORPORATION OF INDIA (SUPRA), IT IS NOT A CONDITION PRECEDENT THAT CFS OF THE ASSESSEE SHOULD BE SITUATED AT PORT. SO, NONSITUATION OF THE CFS OF TH E ASSESSEE AT PORT DOES NOT DISENTITLE IT FROM CLAIMING DEDUCTION U/S. 80 IA(4). 25.2 IN THE PRESENT CASE ALSO THE ASSESSEE HAS BEEN PROVIDED WITH A CERTIFICATE BY JNPT THAT THE ASSESSEES CFS IS AN EXTENDED ARM OF THE PORT AND SIMILAR CERTIFICATE WAS PROVIDED IN THE CASES DEALT WITH BY SPECIAL BENCH ACCORDING TO HIGHLIGHTED PORT ION OF THE DECISION OF SPECIAL BENCH. SUCH CERTIFICATE ISSUED BY JNPT WAS ALSO WITHDRAWN IN THOSE CASES (PARA 64). SUCH WITHD RAWAL BY THE JNPT WAS NOT CONSIDERED AS MATERIAL BY THE SPECIAL BENCH FOR DENIAL OF DEDUCTION UNDER SECTION 80IA(4). MOREOVER , IN THE CERTIFICATE DATED 31/3/2006, JNPT HAS CLEARLY STATE D THAT ASSESSEES CFS MAY BE CONSIDERED AS AN EXTENDED ARM OF THE PORT RELATED ACTIVITIES IN ACCORDANCE WITH CIRCULAR NO.133/95 DATED 22/12/95 ISSUED BY CENTRAL BOARD OF EXCISE & CUSTOMS, NEW DELHI, WHEREAS IN THE SO CALLED WITHDRAWAL LETT ER, WHICH IS HIGHLY RELIED UPON BY THE REVENUE, IT HAS NO WHERE BEEN STATED THAT HOW AND ON WHAT BASIS THE CFS OF THE ASSESSEE HAS SUDDENLY CEASED TO BE AN EXTENDED ARM OF THE PORT. BOTH THE LETTERS ( DT. 31/3/2006 & 5/10/2007) ARE REPRODUCED IN PARA 16 OF THIS ORDER AND FROM THEIR PERUSAL IT CAN BE SEEN THAT THOUGH T HE LETTERS DATED 31/3/2006 STATED THE BASIS ON WHICH ASSESSEES CFS HAS BEEN CONSIDERED TO BE AN EXTENDED ARM OF THE PORT BUT IN SUBSEQUENT LETTER DATED 5/10/2007 NO BASIS HAS BEEN MENTIONED. SUCH WITHDRAWAL LETTER DATED 5/10/2007 CANNOT TAKE ANY P RECEDENCE M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 26 OVER THE JUDICIAL VIEW TAKEN BY SPECIAL BENCH IN TH E CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT(SUPRA). 25.3 IT WAS ALSO ONE OF THE ARGUMENTS BEFORE SPECIA L BENCH BY THE REVENUE THAT BOARD VIDE ITS CLARIFICATION DATED 6/1/2011 BY CONSIDERING THE EARLIER CIRCULARS DATED 23/6/2000 A ND 16/12/2005, HAS CLARIFIED THAT ICDS AND CFS ARE NOT PORTS LOCATED ON ANY INLAND WATER WAY, RIVER OR CANAL AND THEREFORE, THEY CANNOT BE CLASSIFIED AS INLAND PORTS FOR THE P URPOSE OF SECTION 80 IA(4). THE SAID CIRCULAR WAS ALSO NOT CO NSIDERED SUFFICIENT FOR DENIAL OF DEDUCTION TO THE ASSESSEE. REFERENCE IN THIS REGARD ALSO CAN BE MADE TO THE HIGHLIGHTED POR TION OF THE OBSERVATIONS EXISTING IN PARA-64 OF THE ORDER OF SP ECIAL BENCH AND IT CAN BE SEEN THAT DESPITE SUCH ARGUMENT RAISE D BY THE REVENUE, SPECIAL BENCH HAS HELD THAT CFS WAS ENTITL ED FOR DEDUCTION UNDER SECTION 80 IA(4).. 25.4 THUS IT CAN BE SEEN THAT THE ARGUMENTS OF THE AO TO DENY THE CLAIM IN THE PRESENT CASE ARE SAME AS THEY WERE RAI SED BEFORE THE SPECIAL BENCH AND THESE ARGUMENTS OF THE REVENUE WE RE NOT ACCEPTED AND THE ASSESSEE IN SPECIAL BENCH CASES WE RE HELD TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. ACCORDING TO PRECEDENT DIVISION BENCH IS BOUND BY T HE DECISION OF SPECIAL BENCH PARTICULARLY WHEN ARGUMENTS FOR DE NIAL OF DEDUCTION BY THE REVENUE ARE SIMILAR TO THE ARGUMEN TS WHICH WERE RAISED BY THE REVENUE BEFORE THE SPECIAL BENCH AND THE FACTS AND CIRCUMSTANCES ARE NOT SHOWN TO BE DIFFERE NT IN ANY MANNER. IT WAS SPECIFICALLY ARGUED BEFORE US BY THE LD. A.R THAT FACTS OF THE PRESENT CASE ARE SIMILAR TO THE CASES BEFORE SPECIAL BENCH AND SUCH ARGUMENTS OF LD. A.R HAVE NOT BEEN R EBUTTED BY M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 27 THE DEPARTMENT BY SPECIFICALLY POINTING OUT THAT TH ERE IS SOME DIFFERENCE IN THE FACTS AND CIRCUMSTANCES OF THE PR ESENT CASE WHEN THEY ARE COMPARED TO THE FACTS OF THE CASES BE FORE SPECIAL BENCH. 25.5. SO FAR AS IT RELATES TO THE ASPECT OF CONSIST ENCY WHICH WAS ARGUED AT LENGTH BY BOTH THE PARTIES. LD. D.R WHILE OBJECTING TO THE SUBMISSION OF LD. AR ON THE ISSUE OF CONSISTENC Y HAS RELIED ON THE DECISION IN THE CASE OF B.R. CONSTRUCTION (SUPR A) IN WHICH IT HAS BEEN HELD THAT BROADLY PRINCIPLE OF CONSISTENCY WILL CEASE TO BE BINDING PRECEDENT IN FIVE CIRCUMSTANCES WHICH AR E LISTED IN PARA 24.3 OF THIS ORDER. IT IS THE CASE OF LD. DR T HAT THE ORDER OF SPECIAL BENCH IS SUB-SILENTIO, THEREFORE, IT CEASES TO BE A BINDING PRECEDENT. WE DO NOT FIND ANY FORCE IN SUCH ARGUMEN T OF LD. D.R AS THE ORDER OF SPECIAL BENCH CANNOT BE SAID TO BE SUB-SILENTIO AS ALL THE CONTENTIONS OF THE REVENUE ARE CONSIDERED A ND THE MATTER IS DECIDED IN ACCORDANCE WITH SOLITARY DECISION OF HONBLE DELHI HIGH COURT AVAILABLE ON THE ISSUE. EVEN TILL DATE R EVENUE HAS NOT BEEN ABLE TO CITE ANY DECISION OF ANY OTHER HIGH CO URT IN WHICH CONTRARY DECISION IS TAKEN. THE CASES OF CFS ARE BE TTER PLACED FROM THE CASES OF ICDS CONSIDERED BY HONBLE DELHI HIGH COURT AND HONBLE DELHI HIGH COURT EVEN WITHOUT REFERRING TO THE CIRCULARS OF CBDT DATED 23/6/2002, 16/12/2005 HAS H ELD THAT ICD BEING INFRASTRUCTURE FACILITY IS INLAND PORT AN D IS ELIGIBLE FOR DEDUCTION U/S. 80 IA(4) OF THE ACT. THEREFORE, THER E IS NO BREACH OF PRINCIPLE OF CONSISTENCY AND APPLYING THE RULE O F CONSISTENCY THE BENEFIT OF DEDUCTION UNDER SECTION 80IA(4) HAS TO BE GRANTED TO THE ASSESSEE. M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 28 25.6 IN ANY CASE BOARDS CLARIFICATION DATED 6/1/20 11 CAN ONLY BE SAID TO BE JUDICIAL INTERPRETATION OF THE SCOPE AND AMBIT OF THE PROVISION OF THE ACT. ACCORDING TO WELL ESTABLISHED LAW A CIRCULAR/CLARIFICATION CANNOT EVEN IMPOSE ON THE TA X PAYER A BURDEN HIGHER THAN WHAT THE ACT ITSELF, ON A TRUE I NTERPRETATION ENVISAGES. THE TASK OF INTERPRETATION OF LAW IS AN EXCLUSIVE DOMAIN OF THE COURTS. REFERENCE IN THIS REGARD CAN BE MADE TO THE THREE JUDGES DECISION OF HONBLE SUPREME COURT IN THE CASE OF KESHAVI RAOJI & COMPANY VS. CIT, 183 ITR 1(SC) THE BOARD CANNOT PRE-EMPT A JUDICIAL INTERPRETATIO N OF THE SCOPE AND AMBIT OF A PROVISION OF THE ACT BY ISSUIN G CIRCULARS ON THE SUBJECT. THIS IS TOO OBVIOUS A PRO POSITION TO REQUIRE ANY ARGUMENT FOR IT. A CIRCULAR CANNOT EVEN IMPOSE ON THE TAXPAYER A BURDEN HIGHER THAN WHAT THE ACT I TSELF, ON A TRUE INTERPRETATION, ENVISAGES. 25.7 THEREFORE, ALSO IN VIEW OF INTERPRETATION TAKE N BY SPECIAL BENCH IN THE LIGHT OF DECISION OF HONBLE DELHI HIG H COURT IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD. (SUPRA) , THE CLARIFICATION ISSUED BY CBDT DATED 6/1/2011 CANNOT COME INTO PLAY TO DISENTITLE THE ASSESSEE FROM CLAIMING DEDUC TION UNDER SECTION 80IA(4) AS THE VIEW OF THE SPECIAL BENCH AN D HONBLE DELHI HIGH COURT WOULD PREVAIL AGAINST THE VIEW TAK EN BY CBDT. 25.8 THOUGH LD. CIT(A) HAS ACCEPTED THE CLAIM OF T HE ASSESSEE THAT CFS ARE INLAND PORT WITHIN THE MEANING OF SECT ION 80IA(4) ON THE BASIS OF AFOREMENTIONED DECISION OF SPECIAL BENCH, DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD.(SUPRA) AND THE DECISION O F ITAT MUMBAI IN THE CASE OF CONTINENTAL WAREHOUSING CORPO RATION (SUPRA) - BUT AT THE SAME TIME LD. CIT(A) HAS HELD THAT ASSESSEE DID NOT FULFILL THE OTHER CONDITION OF ENTERING INT O AGREEMENT WITH M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 29 THE DESIGNATED AUTHORITY AS ENVISAGED IN SUB-CLAUSE (B) OF SUB- SECTION(4) OF SECTION 80 IA. THE CLAUSE (B), AS IT IS APPLICABLE FOR THE YEAR UNDER CONSIDERATION, READ AS UNDER: (B) IT HAS ENTERED INTO AN AGREEMENT WITH THE CENTR AL GOVERNMENT OR A STATE GOVERNMENT OR A LOCAL AUTHORI TY OR ANY OTHER STATUTORY BODY FOR (I) DEVELOPING OR (II) OPERATING AND MAINTAINING O R (III) DEVELOPING, OPERATING AND MAINTAINING A NEW INFRAST RUCTURE FACILITY;] 25.9 BOTH THE PARTIES HAVE ALSO ARGUED ON THIS ISSU E AT LENGTH. AS MENTIONED EARLIER IT IS THE CASE OF THE ASSESSEE TH AT IT IS NOT NECESSARY TO HAVE A WRITTEN AGREEMENT. AS AGAINST T HAT IT IS THE CASE OF REVENUE THAT THE AGREEMENT SHOULD BE IN WRI TING AND IT SHOULD BE IN ACCORDANCE WITH THE PROVISIONS OF ARTI CLE 299(1). WE HAVE GIVEN CAREFUL THOUGHT TO SUCH ARGUMENTS RAI SED BEFORE US. THE REPLY OF THE ASSESSEE DATED 27/12/2011 SUBM ITTED IN RESPONSE TO SHOW CAUSE NOTICE ISSUED BY AO HAS BEEN REPRODUCED IN THE ASSESSMENT ORDER IN PARA 3.3 FOR A.Y 2006-07 . IN THE REPLY REFERENCE HAS BEEN MADE TO BOTH CIRCULARS ISSUED BY CBDT DATED 23/6/2000 AND DATED 16/12/2005 AND THE RELEVANT POR TION OF THOSE SUBMISSIONS ARE REPRODUCED BELOW: THE CENTRAL BOARD OF DIRECT TAXES (CBDT) VIDE ITS CIRCULAR NO. 10 OF 2005, DATED 16TH DECEMBER. 2005 (ANNEXURE 1) HAS RELAXED THE CONDITIONS TO BE FULFI LLED TOWARDS CREATION OF STRUCTURES AT THE PORTS FOR STA RING, LOADING AND UNLOADING TO FORM PART OF THE DEFINITIO N OF PORTS AND, THEREBY, BECOME ENTITLED FAR THE TAX CONCESSIONS AVAILABLE FOR DEVELOPING OPERATING OR MAINTAINING INFRASTRUCTURE FACILITIES SUCH AS PORTS . ACCORDING TO THE REVENUE DEPARTMENT A CERTIFICATE F ROM THE PORT AUTHORITY CONCERNED STATING THE STRUCTURES FOR M PART BE ENOUGH FOR COUNTING THEM AS PART OF PORTS FOR THE P URPOSE SECTION 10(23G) AND SECTION 80IA OF THE INCOME TAX ACT. THE RELAXATION WOULD BE APPLICABLE WITH RETROSPECTI VE EFFECT M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 30 FROM 2002-03. FOR 2001-02 AND EARLIER ASSESSMENT YE ARS, TWO CONDITIONS HAVE TO BE MET FOR THE STRUCTURES SH OULD HAVE BEEN BUILT UNDER THE BUILD, OPERATE AND TRANSFER (B OOT) OR BUILD-OWN-OPERATE-TRANSFER (BOOT) SCHEME AND THAT T HESE WOULD BE TRANSFERRED THE PORT AUTHORITY ON THE EXPI RY OF THE TIME STIPULATED IN THE AGREEMENT FROM THE ASSESSMENT YEAR 2002-03 THERE WOULD ONLY ONE CONDITION, - THAT THERE IS CERTIFICATE ISSUED BY TH E PORT AUTHORITIES IN OTHER WORDS FOR AND FROM THE ASSESSMENT YEAR 200 2-03 ONWARDS, STRUCTURES AT THE PORTS FOR STORAGE LOADIN G AND UNLOADING ETC WILL BE INCLUDED IN THE DEFINITION OF PORT FOR THE PURPOSE OF SECTIONS 10(23G) AND 80 IA OF THE IN COME TAX ACT, 1961, IF THE FOLLOWING CONDITION IS FULFILLED: - THE CONCERNED PORT AUTHORITY HAS ISSUED A CERTIFICA TE THAT THE SAID STRUCTURES FORM PART THE PORT. IN OUR CASE WE HAD A CONTAINER FREIGHT STATION AT J NPT AND THAT FACT HAS NOT BEEN DISPUTED AND HAS IN FACT BEEN ACKNOWLEDGED BY JNPT VIDE THEIR CERTIFICATE DATED 3 1-03- 2006. (EMPHASIS OURS) 25.10 IN THE AFOREMENTIONED REPLY THE ASSESSEE HAS EXPLAINED THAT VIDE CIRCULAR ISSUED ON 23/6/2000 TWO CONDITIO NS WERE TO BE COMPLIED TO GET THE DEDUCTION. FIRST WAS TO OBTAIN A CERTIFICATE FROM CONCERNED PORT AUTHORITY THAT CFS STRUCTURE FO RM PART OF THE PORT AND THE SECOND CONDITION WAS THAT SUCH STR UCTURE SHOULD HAVE BEEN BUILT UNDER BOT OR BOLT SCHEME AND THERE IS AN AGREEMENT THAT THE SAME WOULD BE TRANSFERRED TO THE STATE AUTHORITY IN THE TIME STIPULATED IN THE AGREEMENT. THIS CIRCULAR WAS APPLICABLE UPTO ASSESSMENT YEAR 2001-02 AND EAR LIER YEARS. FOR AND FROM ASSESSMENT YEAR 2002-03 THE BOARD HAS RELAXED THE SECOND CONDITION VIDE CIRCULAR DATED 16/12/2005, AC CORDING TO WHICH FOR CLAIMING DEDUCTION UNDER SECTION 80IA(4) BY THE CFS, THE ONLY REQUIREMENT WAS TO OBTAIN A CERTIFICATE FR OM THE CONCERNED PORT AUTHORITY THAT THE STRUCTURE OF CFS FORM PART OF M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 31 THE PORT. WHILE HOLDING THAT ASSESSEE IS NOT ENTITL ED TO GET DEDUCTION UNDER SECTION 80IA(4) FOR WANT OF AGREEME NT STIPULATED IN CLAUSE (B) OF SECTION 80IA(4)(I), LD. CIT(A) HAS IGNORED SUCH SUBMISSIONS OF THE ASSESSEE. ACCORDING TO WELL ESTA BLISHED LAW BOARD IS EMPOWERED TO ISSUE BENEFICIAL CIRCULARS IN FAVOUR OF ASSESSEE WHICH TONE DOWN THE RIGOR OF LAW AND SUCH POWER IS VESTED IN THE BOARD UNDER THE PROVISIONS OF SECTION 119 OF THE ACT AND SUCH CIRCULAR IS ALSO BINDING ON THE AUTHORITIE S EMPLOYED IN THE ADMINISTRATION OF THE ACT. THE BENEFIT OF SUCH CIRCULAR IS PERMISSIBLE EVEN THOUGH THE CIRCULAR MIGHT HAVE DEP ARTED FROM THE STRICT TENOR OF THE STATUTORY PROVISION AND MIT IGATED THE RIGOR OF THE LAW. REFERENCE IN THIS REGARD CAN BE MADE TO THE FOLLOWING OBSERVATIONS OF HONBLE SUPREME COURT FROM THE DECI SION IN THE CASE OF KESHAVJI RAOJI & COMPANY VS. CIT (SUPRA) HOWEVER,THIS IS WHAT SRI RAMACHANDRAN REALLY HAS IN MIND CIRCULARS BENEFICIAL TO THE ASSESSEES AND WHI CH TONE DOWN THE RIGOUR OF THE LAW ISSUED IN EXERCISE OF TH E STATUTORY POWER UNDER S. 119 OF THE ACT OR UNDER CORRESPONDIN G PROVISIONS OF THE PREDECESSOR ACT ARE BINDING ON TH E AUTHORITIES IN THE ADMINISTRATION OF THE ACT. THE T RIBUNAL, MUCH LESS THE HIGH COURT, IS AN AUTHORITY UNDER THE ACT. THE CIRCULARS DO NOT BIND THEM. BUT THE BENEFITS OF SUC H CIRCULARS TO ASSESSEES HAVE BEEN HELD TO BE PERMISS IBLE EVEN THOUGH THE CIRCULARS MIGHT HAVE DEPARTED FROM THE S TRICT TENOR OF THE STATUTORY PROVISION AND MITIGATED THE RIGOUR OF THE LAW. 25.11 IN THE PRESENT CASE CIRCULAR DATED 16/12/2005 HAS DONE AWAY WITH THE REQUIREMENT OF AGREEMENT THOUGH THE C IRCULAR HAS DEVIATED FROM THE STRICT TENOR OF STATUTORY PROVISI ONS. SUCH COURSE OF ACTION IS WITHIN THE POWER OF CBDT AND BENEFIT A RISING THERE FROM IS PERMISSIBLE TO THE ASSESSEE AND CANNOT BE D ENIED ACCORDING TO AFOREMENTIONED DECISION OF HONBLE SUP REME M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 32 COURT. HERE, IT MAY BE MENTIONED THAT CIRCULAR DATE D 16/12/2005 WAS ALSO CONSIDERED BY THEIR LORDSHIPS OF HONBLE J URISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ABG HEAVY INDUSTR IES LTD., 322 ITR 323, A CASE LAW RELIED UPON BY LD. CIT(A). IT W AS OBSERVED THAT SUCH CIRCULAR WAS A PROSPECTIVE LIBERALIZATION OF THE LEGISLATIVE SCHEME, IN THE INTEREST OF AIDING THE G ROWTH OF INFRASTRUCTURE. THE ADMINISTRATIVE CIRCULARS ISSUED BY CBDT IN IMPLEMENTATION OF SECTION 80 IA SIMILARLY LIBERALIS E THE SCHEME CONSISTENT WITH THE ACT. REFERENCE CAN BE MADE TO T HE FOLLOWING OBSERVATIONS OF THEIR LORDSHIP. 14. ON 16TH DEC., 2005, CIRCULAR NO. 10 OF 2005 [( 2005) 199 CTR (ST) 97] WAS ISSUED BY THE CBDT. THE CIRCUL AR MADE A REFERENCE TO THE EARLIER CIRCULAR DT. 23RD J UNE, 2000 AND CLARIFIED THAT THE DEFINITION OF THE EXPRESSION PORT FOR THE PURPOSES OF S. 80-IA OF THE ACT SO AS TO INCLUD E STRUCTURES AT PORTS FOR STORAGE, LOADING AND UNLOAD ING ETC., SUBJECT TO THE FULFILLMENT OF THE CONDITIONS ALREAD Y NOTED EARLIER, WOULD APPLY TO THE ASST. YR. 2001-02 AND A NY EARLIER ASSESSMENT YEAR. HOWEVER, FROM ASST. YR. 2002-03 ON WARDS, THE CONDITION REQUIRING THAT THE STRUCTURE SHOULD H AVE BEEN COMPLETED UNDER A BOT OR BOLT SCHEME AND THAT THERE SHOULD BE AN AGREEMENT FOR TRANSFER OF THE FACILITY TO THE COMPETENT AUTHORITY ON THE EXPIRY OF THE STIPULATED PERIOD WAS DELETED. IN OTHER WORDS, THE CONDITIONS WHICH W ERE PRESCRIBED BY CBDTS CIRCULAR DT. 23RD JUNE, 2000 W ERE LIBERALIZED BY THE SUBSEQUENT CIRCULAR DT. 16TH DEC ., 2005. BY THE SUBSEQUENT CIRCULAR IT WAS CLARIFIED THAT TH E CONDITIONS THAT WERE SPELT OUT IN THE EARLIER CIRCU LAR DT. 23RD JUNE, 2000 WOULD CONTINUE TO OPERATE IN RESPECT OF ASSESSMENT YEARS PRIOR TO AND CULMINATING WITH ASST . YR. 2001-02. WITH EFFECT FROM ASST. YR. 2002-03 ALL THA T WAS NECESSARY WAS A CERTIFICATE ISSUED BY THE PORT AUTH ORITY THAT THE STRUCTURE IN QUESTION FORMS A PART OF THE PORT. HENCE, THE EVOLUTION OF S. 80-IA WOULD SHOW A PROGRESSIVE LIBERALISATION OF THE LEGISLATIVE SCHEME, IN THE IN TERESTS OF AIDING THE GROWTH OF INFRASTRUCTURE. THE ADMINISTRA TIVE CIRCULARS ISSUED BY CBDT IN IMPLEMENTATION OF S. 80 -IA M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 33 SIMILARLY LIBERALISED THE SCHEME, CONSISTENT WITH T HE ACT. (EMPHASIS OURS) 25.12 IT MAY BE MENTIONED HERE THAT LD. CIT(A) HAS REFERRED TO THE AFOREMENTIONED DECISION OF HONBLE HIGH COURT I N THE CASE OF CIT VS. ABG HEAVY INDUSTRIES LTD.,(SUPRA) TO HOLD T HAT EXECUTION OF AN AGREEMENT BETWEEN THE ASSESSEE AND PUBLIC AUT HORITY IS MANDATORY BUT THE POSITION IS OTHERWISE. THE CONDIT ION WHICH WAS REQUIRED TO BE FULFILLED IN THE CASE OF A CFS W AS ONLY LIMITED TO OBTAINING THE CERTIFICATE FROM THE PORT AUTHORIT Y THAT THE SAID STRUCTURE FORM PART OF THE PORT WHICH IS CLEAR FROM THE AFOREMENTIONED OBSERVATIONS AND THE SAID CERTIFICAT E HAS BEEN OBTAINED BY THE ASSESSEE. 25.13 THE ABOVE DISCUSSION IS DE-HORS TO THE ARGUME NTS TAKEN BY LD. AR THAT IN THE CASE OF M/S. CONTINENTAL WAREHOU SING CORPORATION (SUPRA) THERE IS A SPECIFIC REFERENCE O F THE FACT THAT THERE WAS NO AGREEMENT ENTERED INTO BY THAT ASSESSE E WITH THE DESIGNATED AUTHORITY AND ALSO THE ARGUMENTS THAT IN ALL THE CASES DISCUSSED BY SPECIAL BENCH THERE WAS NO SUCH AGREEM ENT AS THE ENTIRE STRUCTURES WERE OWNED BY THE ASSESSEE AND TH EY WERE PERMITTED TO BE OPERATED AS PER APPROVALS GIVEN TO THEM BY THE CONCERNED AUTHORITIES AND THE FACTS OF THOSE CASES AND THE CASE OF THE ASSESSEE ARE SIMILAR FOR WHICH AN AFFIDAVIT HAS ALSO BEEN SUBMITTED BY HIM WHICH HAS NOT BEEN CONTROVERTED BY THE REVENUE. 25.14. MOREOVER, CO-ORDINATE BENCH IN THE CASE OF A YUSH AJAY CONSTRUCTION LTD. VS. ITO, 79 ITD 213 (INDORE) WHIL E INTERPRETING THE PROVISIONS OF SECTION 80IA(4), EVE N IN THE ABSENCE OF AGREEMENT, ON RECOGNITION OF THE WORK DO NE HAS COME M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 34 TO A CONCLUSION THAT ASSESSEE WAS ENTITLED TO GET D EDUCTION AND REFERENCE CAN BE MADE TO THE FOLLOWING OBSERVATIONS : 18. IF WE EXAMINE THE RELEVANT PROVISIONS OF S. 80 -IA(4A) OF THE ACT AND THE OBJECT OF ITS INSERTION TO THE TAX STATUTE IN THE LIGHT OF THE BUDGET SPEECH OF THE HONBLE FINANCE M INISTER AND THE ABOVE SAID JUDICIAL PRONOUNCEMENTS, WE WOUL D FIND THAT THE LEGISLATURE HAS GIVEN A FILLIP OF DEDUCTIO NS TO THOSE ENTERPRISES WHO ENGAGE THEMSELVES IN DEVELOPING, MAINTAINING AND OPERATING ANY INFRASTRUCTURE FACILI TIES FOR ECONOMIC GROWTH OF THE NATION AS IT WAS FELT BY THE LEGISLATURE THAT INADEQUATE INFRASTRUCTURE WAS A KE Y CONSTRAINT OF OUR ECONOMIC PROGRESS. AS HELD BY THE APEX COURT IN THE CASE OF BAJAJ TEMPO LTD. VS. CIT (SUPR A), THE PROVISIONS OF PROMOTING ECONOMIC GROWTH SHOULD BE INTERPRETED LIBERALLY AND THE RESTRICTION ON IT TOO HAS TO BE CONSTRUED SO AS TO ADVANCE THE OBJECTIVE OF THE PRO VISIONS AND NOT TO FRUSTRATE IT. IF WE PUT THE FACTS OF THE CASE WITH THE PARAMETER LAID DOWN BY THE APEX COURT AND THE VARIO US HIGH COURTS, WE WOULD FIND THAT THE ASSESSEE THOUGH NOT ENTERED INTO AN AGREEMENT WITH THE STATE GOVERNMENT AT THE INITIAL STAGE BUT HAS OBTAINED THE TENDER/CONTRACT BY VIRTUE OF A VALID ASSIGNMENT, WHICH WAS DULY RECOGNISED BY THE STATE GOVERNMENT, SHOULD BE DEEMED TO HAVE ENTERED INTO AN AGREEMENT WITH THE STATE GOVERNMENT FOR CONSTRUC TION OF THE IMPUGNED BRIDGE ON BOT BASIS. IT IS NOT THE CAS E OF THE REVENUE THAT THE ENTIRE EXPENDITURE INCURRED IN THE CONSTRUCTION OF THE AFORESAID BRIDGE WAS NOT BORNE BY THE ASSESSEE BUT BY M/S AJAY CONSTRUCTIONS, THE MAIN TE NDERER. THE REVENUE HAS REJECTED THE CLAIM OF THE ASSESSEE FOR THE SIMPLE REASON THAT THE ASSESSEE HAD NEVER ENTERED I NTO ANY CONTRACT WITH THE STATE GOVERNMENT AND THE ASSESSEE - COMPANY IS NOTHING BUT A COLOURABLE DEVICE TO EVADE TAX. IT IS A SETTLED POSITION OF LAW THAT THE COMPANY IS A JURISTIC ENTITY AND IT SHOULD BE CONSIDERED INDEPENDENT FROM THE SHAREHOLDERS OR THE DIRECTORS. ADMITTEDLY, M/S AJAY CONSTRUCTION, THE ORIGINAL TENDERER, HAVE ASSIGNED THE REMAINING WORK OF THE CONTRACT/TENDER ALONG WITH TH E EXPENDITURE INCURRED BY IT TO SMT USHA AGRAWAL, THE PROMOTER OF THE ASSESSEE-COMPANY THOUGH AN AGREEMEN T DT. 1ST APRIL, 1995 AND THEREAFTER THE CONSTRUCTION WOR K WAS UNDERTAKEN BY THE PROMOTER OF THE ASSESSEE-COMPANY TILL ITS INCORPORATION. WHEN THE PERMISSION OF THE ASSIGNMEN T WAS M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 35 GRANTED BY THE STATE GOVERNMENT, FRESH AGREEMENT WA S EXECUTED BETWEEN THE ASSESSEECOMPANY AND THE MAIN TENDERER, M/S AJAY CONSTRUCTIONS, IN WHICH THE ASSE SSEE- COMPANY HAS RATIFIED ALL THE DEEDS AND ACTS OF ITS PROMOTER, SMT. USHA AGRAWAL, AND OWNED/TAKEN OVER ALL THE ASS ETS AND LIABILITIES OF ITS PROMOTER. THE ACTION OF ASSI GNING AND THE WORK OF CONSTRUCTION UNDERTAKEN BY THE ASSESSEE WAS RECOGNISED BY THE STATE GOVERNMENT AND A TRIPARTITE AGREEMENT WAS EXECUTED BETWEEN THE ASSESSEE, M/S AJ AY CONSTRUCTIONS AND THE STATE GOVERNMENT THROUGH WHIC H THE STATE GOVERNMENT HAVE RECOGNISED THAT THE ASSESSEE HAS STEPPED INTO THE SHOES OF MIS AJAY CONSTRUCTIONS AN D NOTIFIED AUTHORISING THE ASSESSEE TO COLLECT THE TO LL TAX FOR A PARTICULAR PERIOD. A COPY OF THE LETTER DT. 22ND MA Y, 2000, TO THIS EFFECT IS ALSO PLACED BEFORE US. THE ASSESS EE HAS ALSO PLACED VARIOUS CORRESPONDENCE ENTERED INTO BETWEEN THE ASSESSEE AND THE STATE GOVERNMENT AND THE LETTER DT . 26TH AUG., 1995, THROUGH WHICH THE ASSESSEE WAS INFORMED ABOUT THE NOTIFICATION IN HIS FAVOUR TO COLLECT THE TOLL TAX. A COPY OF THE LETTER PLACED AT P. 140 OF THE COMPILATION OF T HE ASSESSEE. COPIES OF THE NOTIFICATION AND VARIOUS RECEIPTS OF TOLL TAX ARE ALSO PLACED ON RECORD FOR OUR PERUSAL. IT IS ALSO R EVEALED FROM VARIOUS CORRESPONDENCE OF THE ASSESSEE WITH TH E STATE GOVERNMENT THAT THE ASSIGNMENT OF CONTRACT WAS DULY RECOGNISED BY THE STATE GOVERNMENT AND IT WAS ADMIT TED BY THEM THAT THE ACTUAL CONSTRUCTION WORK WAS UNDERTAK EN BY THE ASSESSEE ONLY. (EMPHASIS OURS) IN THE ABOVE CASE ALSO THE DEDUCTION WAS NOT GRANTE D TO THE ASSESSEE AS ASSESSEE HAD NOT ENTERED INTO AN AGREEM ENT WITH THE STATE GOVERNMENT BUT FROM THE APPROVALS GRANTED TO THE ASSESSEE IT WAS INFERRED THAT ASSESSEE SHOULD BE DEEMED TO H AVE ENTERED INTO AN AGREEMENT WITH THE STATE GOVERNMENT. 25.15 THE ABOVE CIRCULAR ISSUED BY CBDT DATED 16/12 /2005 HAS ALSO WAIVED THE CONDITION REGARDING ENTERING INTO A N AGREEMENT WITH THE AUTHORITY AND SUCH COURSE OF ACTION TAKEN BY CBDT WAS IN ACCORDANCE WITH THE LAW AND INCOME TAX AUTHORITI ES ADMINISTERING THE ACT CANNOT DENY SUCH BENEFIT TO T HE ASSESSEE. M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 36 THEREFORE, WE HOLD THAT LD. CIT(A) HAS WRONGLY HELD THAT ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SECTIO N 80IA(4) OF THE ACT IN ABSENCE OF THE AGREEMENT ENTERED INTO BY IT WITH THE DESIGNATED AUTHORITY. 25.16 WE ALSO FOUND FORCE IN THE ARGUMENT OF LD. A .R THAT DEDUCTION FOR THE YEARS UNDER CONSIDERATION CANNOT BE DENIED TO THE ASSESSEE ON THE GROUND THAT THERE IS NO PROVISI ON FOR WITHDRAWAL OF THIS DEDUCTION FOR THE SUBSEQUENT YEA R FOR BREACH OF CERTAIN CONDITIONS UNLESS THE DEDUCTION GRANTED IN INITIAL A.Y.2004-05 IS WITHDRAWN. SUCH PROPOSITION IS SUPPO RTED BY THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. PAUL BROTHERS (SUPRA). NO CONTRARY DECISION WAS CITED BY THE OTHER SIDE. THEREFORE, ALSO DEDUCTION U/S. 80IA(4) CANNOT BE DENIED TO THE ASSESSEE FOR THE YEARS UNDER CONSIDERATION. 2.3. WE NOTE THAT WHILE DECIDING THE ISSUE, THE BE NCH MADE AN ELABORATE DISCUSSION ON VARIOUS CASES, THE PROVISIONS OF SECTION 80IA(4), CBDT CIRCULAR, REPLY OF THE ASS ESSEE DATED 27/12/2011 MENTIONING CBDT CIRCULAR DATED 23/06/200 0 AND 16/12/2005. CIRCULAR DATED 16/12/2005 HAS DONE AWAY WITH THE REQUIREMENT OF AGREEMENT AND THE SAID CIRC ULAR WAS DISCUSSED BY THEIR LORDSHIP OF THE HONBLE JURISDIC TIONAL HIGH COURT IN THE CASE OF CIT VS ABG HEAVY INDUSTRIES LT D. 322 ITR 323(BOM.). THE BENCH FINALLY CONCLUDED THAT THE CLA IMED DEDUCTION CANNOT BE DENIED TO THE ASSESSEE. SO FAR AS, CONTENTION OF THE LD. DR THAT THE DECISI ON IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LTD. VS DCIT (2012) 18 M/S UNITED LINGER AGENCIES OF INDIA PVT. LTD.. ITA NO.970/MUM/2014 37 ITR (TRIB) 106 (MUM.)(SB) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL HAS BEEN PREFERRED BEFORE THE HONBLE HIGH COURT, WE NOT THAT THE DECISION OF THE SPECIAL BENCH (AFOREMENTIONED) HAS BEEN AFFIRMED BY HONBLE JURIS DICTIONAL HIGH COURT IN CIT VS CONTINENTAL WAREHOUSING CORPOR ATION AND ALL CARGO GLOBAL LOGISTIC LTD. (2015) 374 ITR 6 45 (BOM.) BY FOLLOWING CONTAINER CORPORATION OF INDIA LTD. VS ACIT (2012) 346 ITR 140 (DEL.), THUS, FROM THIS ANGLE AL SO, WE FIND NO MERIT IN THE APPEAL OF THE REVENUE. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCL USION OF THE HEARING ON 07/10/2015. SD/- SD/- ( RAMIT KOCHAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ) DATED : 16/10/2015 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1 1 $ 2# ( +, ) / THE CIT, MUMBAI. 4. 1 1 $ 2# / CIT(A)- , MUMBAI 5. 45 /# , 1 +,' + 6 , $ % / DR, ITAT, MUMBAI 6. 7! % / GUARD FILE. / BY ORDER, 04,# /# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI.