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Income Tax Appellate Tribunal, “G”, BENCH
Before: SHRI PAWAN SINGH , JM & SHRI M.BALAGANESH, AM
आदेश / O R D E R PER BENCH:
M/s. International Cargo Terminals and Infrastructure P. Ltd.
(A.Y. 2010-11) Revenue appeal This appeal in for A.Y.2010-11 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-137/14-15 (New No.CIT(A)- 54/ACCC-39/IT-75/14-15) dated 21/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by the ld. Asst. Commissioner of Income Tax, Central Circle – 39, Mumbai (hereinafter referred to as ld. AO).
ITA No.4229/Mum/2016 (A.Y.2008-09) Revenue Appeal This appeal in for A.Y.2008-09 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-135/14-15 (New No.CIT(A)-54/ACCC- 39/IT-79/14-15) dated 21/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by the ld. Asst. Commissioner of Income Tax, Central Circle – 39, Mumbai (hereinafter referred to as ld. AO).
ITA No.4243/Mum/2016 (A.Y.2011-12) Revenue Appeal This appeal in for A.Y.2011-12 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-138/14-15 (New No.CIT(A)-54/ACCC- 39/IT-76/14-15) dated 21/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 153A of the Income Tax Act, 1961
M/s. International Cargo Terminals and Infrastructure P. Ltd.
(hereinafter referred to as Act) dated 07/03/2014 by the ld. Asst. Commissioner of Income Tax, Central Circle – 39, Mumbai (hereinafter referred to as ld. AO). (A.Y.2007-08) Revenue Appeal This appeal in ITA No.4239/Mum/2016 for A.Y.2007-08 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-134/14-15 (New No.CIT(A)-54/ACCC- 39/IT-80/14-15) dated 21/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by the ld. Asst. Commissioner of Income Tax, Central Circle – 39, Mumbai (hereinafter referred to as ld. AO).
ITA No.4244/Mum/2016 (A.Y.2012-13) Revenue Appeal This appeal in for A.Y.2012-13 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-139/14-15 (New No.CIT(A)-54/ACCC- 39/IT-77/14-15) dated 21/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by the ld. Asst. Commissioner of Income Tax, Central Circle – 39, Mumbai (hereinafter referred to as ld. AO).
ITA No.4109/Mum/2016 (A.Y.2009-10) Assessee Appeal This appeal in for A.Y.2009-10 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in M/s. International Cargo Terminals and Infrastructure P. Ltd. appeal No.CIT(A)-41/ACCC-39/IT-136/14-15 (New No.CIT(A)-54/ACCC- 39/IT-78/14-15) dated 21/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by the ld. Asst. Commissioner of Income Tax, Central Circle – 39, Mumbai (hereinafter referred to as ld. AO). (A.Y.2010-11) Assessee Appeal This appeal in ITA No.4083/Mum/2016 for A.Y.2010-11 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-137/14-15 (New No.CIT(A)-54/ACCC- 39/IT-75/14-15) dated 21/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by the ld. Asst. Commissioner of Income Tax, Central Circle – 39, Mumbai (hereinafter referred to as ld. AO). ITA No.4084/Mum/2016 (A.Y.2011-12) Assessee Appeal This appeal in ITA No.4084/Mum/2016 for A.Y.2011-12 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-138/14-15 (New No.CIT(A)-54/ACCC- 39/IT-76/14-15) dated 21/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by the ld. Asst. Commissioner of Income Tax, Central Circle – 39, Mumbai (hereinafter referred to as ld. AO). (A.Y.2012-13) Assessee Appeal
M/s. International Cargo Terminals and Infrastructure P. Ltd.
This appeal in for A.Y.2012-13 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-139/14-15 (New No.CIT(A)-54/ACCC- 39/IT-77/14-15) dated 21/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by the ld. Asst. Commissioner of Income Tax, Central Circle – 39, Mumbai (hereinafter referred to as ld. AO).
ITA No.4142/Mum/2016 (A.Y.2008-09) Assessee Appeal This appeal in for A.Y.2008-09 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-135/14-15 (New No.CIT(A)-54/ACCC- 39/IT-79/14-15) dated 21/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s.153A of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by the ld. Asst. Commissioner of Income Tax, Central Circle – 39, Mumbai (hereinafter referred to as ld. AO). Since identical issues are involved in these appeals, they were heard together and are being disposed off by this consolidate order, for the sake of convenience.
Revenue Appeals ( A.Yrs. 2007-08, 2008-09, 2010-11, 2011-12 & 2012-13)
M/s. International Cargo Terminals and Infrastructure P. Ltd.
As identical issues are involved in all these appeals they are taken up together and disposed off by this common order for the sake of convenience.
The only issue to be decided in this appeal is with regard to deletion of disallowance of deduction u/s.80IA (4) of the Act by the ld. CIT(A). We find the issue involved is whether the income of container freight station is eligible for deduction u/s.80IA (4) of the Act. Both the parties mutually agreed at the time of hearing that this issue is covered by the decision of Hon’ble Supreme Court in the case of CIT vs. Container Corporation of India Ltd., reported in 404 ITR 397 (SC) wherein it was held that container freight station is eligible for deduction u/s. 80IA (4) of the Act. Since the facts recorded by the ld. CIT(A) in his order are not in dispute before us, respectfully following the aforesaid Supreme Court decision which is also not disputed by the parties before us, the grounds raised by the revenue for the A.Y.2007-08 are dismissed. 2.1. In view of the aforesaid decision, the revenue appeals for the A.Yrs.2007-08, 2008-09, 2010-11, 2011-12 and 2012-13 are dismissed. (A.Y.2008-09) Assessee Appeal
The ground No. I & II raised by the assessee was stated to be not pressed by the ld. AR at the time of hearing. The same is reckoned as a statement made from the Bar and accordingly grounds I & II are dismissed as not pressed.
4. Ground No.1 raised by the assessee is with regard to the disallowance made u/s.14A of the Act.
M/s. International Cargo Terminals and Infrastructure P. Ltd.
4.1. We have heard rival submissions. We find that the ld. AO had made disallowance u/s.14A of the Act read with third limb of rule 8D(2) of the rules in the sum of Rs.28,36,146. It is not in dispute that assessee has not claimed any exempt income during the year under consideration. Despite this fact the assessee had voluntarily disallowed a sum of Rs.40,000/- on an adhoc basis in the return of income. We find now the issue is well settled that when there is no exempt income claimed by the assessee, the disallowance u/s.14A of the Act would not come into operation. Accordingly, we direct the ld. AO to delete the disallowance made u/s.14A in the sum of Rs.28,36,146/-. Accordingly, the ground No.1 raised by the assessee is allowed.
The ground Nos.2,3 and 4 raised by the assessee was with regard to disallowance of staff welfare expenses in the sum of Rs.3 lakhs, entertainment expenses in the sum of Rs.2 lakhs, miscellaneous expenses in the sum of Rs.2 lakhs made by the ld. AO passed in original assessment completed u/s.143(3) of the Act dated 24/05/2010.
5.1. We have heard rival submissions. We find that these disallowances of expenditure in the total sum of Rs.7 lakhs were originally made by the ld. AO in the original assessment completed u/s.143(3) of the Act dated 24/05/2010. The assessment which is in challenge before us is the assessment framed u/s.143(3) r.w.s. 153A of the Act dated 07/03/2014 pursuant to the search carried out in the case of J M Baxi Group on 20/03/2012. At the time of hearing, no arguments were advanced by the ld. AR with regard to these disallowances and accordingly, the same are dismissed.
M/s. International Cargo Terminals and Infrastructure P. Ltd.
In the result, appeal of the assessee for A.Y.2008-09 in is partly allowed. (A.Y.2009-10) Assessee Appeal
The ground No. I & II raised by the assessee was stated to be not pressed by the ld. AR at the time of hearing. The same is reckoned as a statement made from the Bar and accordingly grounds I & II are dismissed as not pressed.
The ground No.III raised by the assessee is with regard to action of the ld. CIT(A) confirming the disallowance of deduction u/s.80IA of the Act by holding that the rental income of Rs.22,11,070/- and interest on FDR of Rs.23,56,455/- as not derived from the industrial undertaking.
8.1. We have heard rival submissions. We find that interest income of FDR’s were not made with inextricable link with the business of the assessee and the ld. AR fairly stated that the same is not eligible for deduction u/s.80IA of the Act. Accordingly, we uphold the action of the ld. CIT(A) in this regard.
8.2. With regard to rental income of Rs.22,11,070, the ld. AR argued that the same only represents demurrage charges and we find that the ld. AR filed a note in this regard as under:-
Note on Rent Income. Assessment Years : 2008-09 to 2013-14. “The appellant carries the business of providing containers freight services. This is given recognition as an inland port. This facilitates the exporters and importers to use the services of these inland ports and save them the troubles of rushing to either Mumbai or to any other port near the sea.
M/s. International Cargo Terminals and Infrastructure P. Ltd.
When the exporter or importer brings the goods to be exported or imported to our inland port, their responsibility ends and our facilities thereafter send the goods to the ports. Sometimes the goods remain in our ports when the importer or exporter finds it unprofitable to remove the goods. If the goods would have remained at regular ports then either importer or exporter might have to pay demurrage. Our inland port charges such demurrage to the importer or exporter and if the goods are not removed within reasonable time then they are auctioned by us. We therefore submit that the rent so named are only demurrage charges or auction charges arising from our activities of carrying on container freight services and therefore the same are deductible under section 80IA of Income Tax Act, 1961.”
8.3. The ld. AR fairly admitted that let this fact be examined by the ld. AO and the issue be decided accordingly. Per contra, the ld. DR vehemently objected to setting aside of this issue to the file of the ld. AO as assessee itself had classified the receipt as rental income. We find that assessee had given a detailed note supra explaining the nature of transaction which requires to be examined. It is well settled that substance of the transaction would always prevail over its form. Accordingly, we deem it fit and appropriate, in the interest of justice and fair play, to remand this issue to the file of the ld. AO for denovo adjudication. Accordingly, the ground No. III raised by the assessee is partly allowed for statistical purposes.
In the result, the appeal of the assessee for A.Y.2009-10 in is partly allowed for statistical purposes.
M/s. International Cargo Terminals and Infrastructure P. Ltd.
(A.Y.2010-11) Assessee Appeal
The ground No. I & II raised by the assessee was stated to be not pressed by the ld. AR at the time of hearing. The same is reckoned as a statement made from the Bar and accordingly grounds I & II are dismissed as not pressed.
The ground No.1 raised by the assessee is similar to the ground No.1 raised by the assessee for A.Y.2009-10 and the decision rendered thereon would apply with equal force for this year also. Accordingly, the ground No.1 is partly allowed for statistical purposes.
The ground No.2 is with regard to disallowance made u/s.14A of the Act. This ground is also similar to ground No.1 raised by the assessee for A.Y.2008-09 supra and the decision rendered thereon would apply with equal force herein. Accordingly, the ground No.2 raised for the A.Y.2010-11 is allowed.
The ground Nos.3,4,5 & 6 were with regard to adhoc disallowance of expenses made by the ld. AO towards staff welfare expenses, entertainment expenses and miscellaneous expenses. We find that no arguments were advanced by the ld. AR at the time of hearing and accordingly, the same are treated as dismissed.
In the result, appeal of the assessee for A.Y.2010-11 is partly allowed for statistical purposes.
M/s. International Cargo Terminals and Infrastructure P. Ltd.
(A.Y.2011-12) Assessee Appeal 15 The ground No. I & II raised by the assessee was stated to be not pressed by the ld. AR at the time of hearing. The same is reckoned as a statement made from the Bar and accordingly grounds I & II are dismissed as not pressed.
The ground No.1 raised by the assessee is similar to the ground No.1 raised by the assessee for A.Y.2009-10 and the decision rendered thereon would apply with equal force for this year also. Accordingly, the ground No.1 is partly allowed for statistical purposes.
The ground No.2 is with regard to disallowance made u/s.14A of the Act. This ground is also similar to ground No.1 raised by the assessee for A.Y.2008-09 supra and the decision rendered thereon would apply with equal force herein. Accordingly, the ground No.2 raised for the A.Y.2010-11 is allowed.
The ground Nos.3,4,5 & 6 were with regard to adhoc disallowance of expenses made by the ld. AO towards staff welfare expenses, entertainment expenses and miscellaneous expenses. We find that no arguments were advanced by the ld. AR at the time of hearing and accordingly, the same are treated as dismissed.
In the result, appeal of the assessee for A.Y.2011-12 is partly allowed for statistical purposes.
M/s. International Cargo Terminals and Infrastructure P. Ltd.
(A.Y.2012-13) Assessee Appeal
The ground No.1 raised by the assessee is similar to the ground No.1 raised by the assessee for A.Y.2009-10 and the decision rendered thereon would apply with equal force for this year also. Accordingly, the ground No.1 is partly allowed for statistical purposes.
The ground No.2 is with regard to disallowance made u/s.14A of the Act. This ground is also similar to ground No.1 raised by the assessee for A.Y.2008-09 supra and the decision rendered thereon would apply with equal force herein. Accordingly, the ground No.2 raised for the A.Y.2010-11 is allowed.
The ground Nos.3,4,5 & 6 were with regard to adhoc disallowance of expenses made by the ld. AO towards staff welfare expenses, entertainment expenses and miscellaneous expenses. We find that no arguments were advanced by the ld. AR at the time of hearing and accordingly, the same are treated as dismissed.
In the result, appeal of the assessee for A.Y.2012-13 is partly allowed for statistical purposes.
TO SUM UP Sr. Appeal by Result No. 1. 4228/Mum/2016 A.Y. 2010-11 Revenue Dismissed appeal 2. 4229/Mum/2016 A.Y.2008-09 Revenue Dismissed Appeal 3. 4243/Mum/2016 A.Y.2011-12 Revenue Dismissed Appeal
M/s. International Cargo Terminals and Infrastructure P. Ltd.
4239/Mum/2016 A.Y.2007-08 Revenue Dismissed Appeal 5. A.Y.2012-13 Revenue Dismissed 4244/Mum/2016 Appeal 6. 4109/Mum/2016 A.Y.2009-10 Assessee Partly Allowed for Appeal Statistical Purposes 7. 4083/Mum/2016 A.Y.2010-11 Assessee Partly Allowed for Appeal Statistical purposes 8. 4084/Mum/2016 A.Y.2011-12 Assessee Partly Allowed for Appeal Statistical purposes 9. 4085/Mum/2016 A.Y.2012-13 Assessee Partly Allowed for Appeal Statistical purposes 10. 4142/Mum/2016 A.Y.2008-09 Assessee Partly Allowed for Appeal Statistical purposes