SIRAJ AHMED SHAH,MUMBAI vs. WARD 42 (1) (4) AND CIT, MUMBAI

& 3816/Mum/2025 Gateway Distriparks Ltd. “1. Whether on the facts and circumstances of the case and in law, The Ld. CIT(A) is right in law in holding that the assessee is entitled to deduction u/s. 801A(4) of the Income Tax Act, 1961 in respect of income derived by the assessee from Container Freight Stations (CFS) overlooking the clarification issued by the CBDT in this respect vide Circular dated 06th January 2011?" 2. "Whether on the facts and circumstances of the case and in law Ld. CIT(A) is legally correct in relying on Circular No. 18/2009 dated 08/06/2009 issued by CBEC under a different enactment when the definition of 'infrastructure facility' is provided u/s. 80IA(4) and clarified by the CBDT." 3. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is erred in deleting addition made by the assessing officer by disallowing claim of the assesse u/s. 801A of Rs.7,32,86,130/- on the ground that the assessee is entitled to deduction u/s. 801A of the Income Tax Act, 1961 in respect of income derived by the assessee from Container Freight Stations (CFS) overlooking the clarification issued by the CBDT in this respect vide Circular dated 06th January 2011?" 4. "The appellant craves leave to add, DLEETE, alter, modify, rectify, substitute OR otherwise any OR all of grounds of appeal

As far as the contention that there is no agreement with any Government or statutory authority, we find that the assessee has placed on record letter of intent. In fact the Ministry of Commerce and Industry, vide letter dated 10/02/2005, written to the Managing Director of the assessee company regarding setting up of a CFS at Visakhapatnam apropos the assessee’s case.

In the case of A L Logistics P. Ltd. (supra) the Chennai Bench of the Tribunal at para 7 held as follows: “7. Now, we proceed to the next issue, whether in the absence of specific agreement with the Central/State Government, local authority or Statutory Body, the assessee is entitled to claim the benefit of section 80IA( 4 )(i)? The assessee had made an application for setting up of CFS at Haldia. In response to the application of assessee, the Department of Commerce, Infrastructure Division, Ministry of Commerce and Industry approved the proposal of the assessee for setting up of CFS at Haldia for handling import/export of cargo subject to execution of certain documents and compliance of other terms and conditions as stated in the letter. The Id. Counsel for the assessee has placed on record letter dt.27- 05-2003 from theMinistry of Commerce and Industry permitting the assessee to set up CFS at Raldia. The contents of the letter are reproduced herein below: "No. 16/6/2003-lnfra-I Government of India & 3816/Mum/2025 Gateway Distriparks Ltd. Ministry of Commerce & Industry Deptt.of Commerce Infrastructure Division UdyogBhawan, New Delhi, Dated the 27th May,2003. To The Director, M/s A L Logistics Pvt. Ltd., Chennai. Subject: Setting up of an CFS at Haldia. Sir, I am directed to refer to your application dated 8.2.2003 on the above subject and to say that the Government has approved your proposal for setting up of an Container Freight Station at Haldia for Handling import and export cargo. The approval is subject to t le following terms and conditions:- (a) The Letter of Intent holder shall take adequate steps to create proper infrastructure keeping in view the indicative norms given in Parts A& B of the Guidelines for setting up Inland container Depots I Container Freight Stations (ICDs/CFs) within a period of one year from the date of issue of this letter. (b) Necessary bond and guarantees, as required, would be executed with the concerned Commissioner of Customs and Central Excise. (c) The approval would be subject to cancellation in the event of violation of the Customs and other laws of the land and Rules. (d) A quarterly progress report of the implementation shall be sent to the Ministry of Commerce. (e) The working of the CFS will be open to review by the Inter Ministerial Committee. (f) Formalities in respect of acquisition/possession of the land shall be completed within 60 days and intimated to the Mlo Commerce, failing which the approval granted would be automatically cancelled.

The facility to be set up shall be full computerized, with EDI compatibility and a minimum complement of equipment and accessories as necessary shall be made available at the facility. The indicative list of equipment/accessories considered necessary is annexed. The status regarding confirmation of the installation! availability of the items shall be furnished to the appropriate authorities to facilitate issue of requisite notification.

Please acknowledge receipt of this letter. Yours faithfully, Sd/- (N.G. Biswas) DIRECTOR" A perusal of clause 'b' of the above letter shows that the assessee was required to execute necessary bond and guarantees with the concerned Commissioner of customs an –Central Excise. It was only on the compliance of all the terms and conditions mentioned in the aforesaid letter that the assessee was allowed to carry on the services of CFS. The assessee on the compliance of the terms and conditions as mentioned in the letter, was notified as CFS Complex for the purpose of receiving, storing, import containers, receiving/consolidating export cargo etc. vide Public Notice OUO-1l-2013. The Public Notices were issued by the office of the Commissioner of Customs (Port) Kolkata.

Thus, it is evident that the proposal of the assessee was accepted by the Government on certain conditions which were duly complied with by the assessee. There may not be any specific agreement, but the sequences of events clearly show that the assessee is providing CFS facility in accordance with the conditions laid down by the Government. In such circumstances there is no need to insist for the specific execution of agreements. The coordinate bench of the Tribunal in the case of United Liner Agencies of India (P.) Ltd (supra), has taken a similar view, Where no specific agreement with the State Government was entered into but from the approvals granted to the assessee it was inferred that assessee should be deemed to have entered into an agreement with the State Government. Thus, we are of the considered view that the assessee has complied with all the provisions of section 80IA(4)(i) and is eligible to claim deduction under the said section. The impugned order is set aside. The appeal of the assessee is allowed.”

Respectfully following the Coordinate Bench order, we hold that the contention of the AO that there is no agreement and hence the assessee is not eligible for exemption is not the correct position of law.

The Hon’ble Delhi High Court in the case of Container Corporation Ltd. (supra) held as follows: “The term “infrastructure facility” was defined in section 80- IA(12)(ca) of the Income Tax Act, 1961, to mean a road, highway, bridge, airport, port or rail system or any other public facility of a similar nature as may be notified by the Central Board of Direct Taxes. The Finance (No. 2), 1998, included the words “Inland water ways and inland ports” in the definition of “infrastructure facility” in sub-section (12), clause (ca), with effect from April 1, 1999. When the entire section was recast and even after several amendments were thereafter made to the section, inland ports continued to enjoy the dededuction as infrastructure facility. There is no definition of the words “inland ports” in any of the dictionaries. But the words “inland container depot” “were introduced in sec. 2(12) of the Customs Act, 1962, which defines “customs port”. This was by way of an amendment made by the Finance Act, 1983, with effect from May 13, 1983. Simultaneously, clause (aa) was inserted in sec. 7(1) of the Act under which the CCHI issue notification appointing the places which alone shall be considered as inland container depots for the unloading of imported goods and loading of exported goods. The Central Board of Excise and Customs issued a clarification that inland container depots were inland ports. The power to notify infrastructure facilities for the purpose of the section was taken away from the Central Board of Direct Taxes w.e.f. April 1,2002. However, there was no provision made in the Act saying that notifications issued earlier would cease to have from April 1, 2002.The assessee, a public sector undertaking, was engaged in the business of handling and transportation of containerised cargo. The activity of the assessee was carried out mainly on its inland container deports, Central freight stations see had a totala of 45 inland container depots. It claimed special deduction under section 80-IA(4) for the assessment years 2003-04 to 2005-06. The Assessing Officer denied special deduction but the Tribunal allowed it. On appeal to the High Court: Held, allowing the appeals, that out of the total 45 inland container depots operated by the assessee, except two all others were notified by the Central Board of Direct Taxes for the purpose of sec. 80IA(12)(ca). Having regard to the provisions of the Customs Act, the communication issued by the Central Board of Excise and Customs as well as the & 3816/Mum/2025 Gateway Distriparks Ltd. Ministry of Commerce and Industry, the object of including “inland port” as an infrastructure facility and also that customs clearance also takes place in the inland container depot, the assessee’s claim that the inland container depots were inland ports under Explanation (d) to sec. 80IA(4) required to be upheld.”

The issue has also been clarified by the Government vide CBEC circular no. 18/2009 dated 08/06/2009. Respectfully following the above decisions, we allow this appeal of the assessee.”

Since, the there is no change in the facts and circumstances of the case for the AY 2011-12 and 2017-18, respectfully following the decision of the Coordinate Bench in the assessee’s own case for the AY 2011-12 (supra) as well as the ratio laid down by the Hon’ble Supreme Court in the case of M/s. Container Corporation [404 ITR 397 (SC) (2018)] and M/s. AL Logistics (P) Ltd of Hon’ble Madras High Court [374 ITR 609, Madras – HC], decision of the Hon’ble Bombay High Court in the case of Continental Warehousing Corporation [374 ITR 645, Bom. – HC], we find no infirmity in the order of the Ld. CIT(A) while allowing the assessee’s appeal. Hence, we are of the considered opinion that the decision taken by the Ld. CIT (A) is in order and no interference is required. Accordingly, the Grounds raised

In result, the appeals of the revenue for AY 2018-19 & 2020-21 are dismissed.