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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: SHRI SANJAY ARORA & SHRI G. PAVAN KUMAR
आदेश /O R D E R
PER G. PAVAN KUMAR, JUDICIAL MEMBER:
The Revenue has filed an appeal against the order of Commissioner of Income Tax (Appeals)-8, Chennai in dated 22.06.2016 passed u/s. 143 and 250 of the Act.
:-2-: I.T.A. No. 2624/Mds/2016
The Revenue has raised the following grounds:
2.1 The CIT(A) erred in deleting the disallowance on the claim of deduction u/s. 80IA to the extent of Rs. 86,63,274/-.
2.2 The CIT(A) erred in not appreciating the fact that Container Freight Station
(CFS) cannot be classified as 'inland ports' for the purpose of section 80IA(4).
2.3 The CIT(A) erred in holding that the assessee is entitled to the benefit u/s. 80IA of the Income Tax Act in view of the status of CFS having been clarified by the Ministry of Commerce and Industry as 'inland ports' and also for the reason that the Chennai Port Trust had issued a certificate stating that the CFS of the assessee may be considered as extended arm of the Port in accordance with the CBDT Circular No. 793 dated
23.06.2000 read with Circular No. 133/95 Cus dated 22.12.1992 of the Central Board of Excise and Customs, New Delhi.
2.4 The CIT(A) ought to have noted that after the amendment of the section 80IA(4) vide Finance Act, 2001 with effect from 01.04.2002, there is certain change in the definition of infrastructure facility given in the Explanation. The portion "as may be notified by the Board in this behalf in the Official Gazette" as appearing before the said amendment has been deleted in the new Explanation and hence the instant assessee's claim on deduction u/s. 80IA(4) was not allowable on the basis of the above
Explanation independent of the notifications
:-3-: I.T.A. No. 2624/Mds/2016 2.5 The CIT(A)'s relied upon decision of Jurisdictional High Court in assessee's own case for assessment year 2009-10 vide TCA No. 497 of 2015 dated
23.07.2015 was not accepted by the Department and against which an SLP proposal had been sent to the Board for filing of SLP before the Hon'ble Apex Court.
2.6 Having regard to the Hon'ble Apex Court's decision in the case of CIT vs
Continental Warehousing Corporation (Nhava Sheva) Ltd (2015) has granted SLP against High Court of Bombay's ruling that ICDs and CFSs are infrastructural facility entitled to deduction under sub section (4) of section 80IA, the CIT(A) ought to have upheld the disallowance u/s. 80IA(4) made by the AO.
The Brief facts of the case are that the assessee is a limited company engaged in the business of clearing and forwarding agents and container freight station and filed the Return of income electronically for the assessment year 2012-13 on 26.09.2012 with total income Rs. Nil and The income as per provisions of section 115JB of the Act is Rs. 2,46,87,758/-. Subsequently, the case was selected for scrutiny under CASS and notice u/s. 143(2) and 142(1) are issued along with detailed questionnaire. In response to the notice, the Ld. AR appeared from time to time and produced Books of accounts, copy of acknowledgment with computation of income, Balance sheet, profit and loss account with schedules, Audit report in Form 3CA and 3CD, Form 29B, 26AS, and Form 10CCB and other details in support of Return of income for the assessment
:-4-: I.T.A. No. 2624/Mds/2016 purpose. The Assessing Officer on perusal of the information in the assessment proceedings found that the assessee has claimed deduction u/s. 80IA of the Act Rs. 6,71,54,507/- and adjusted to an extent of Rs. 1,40,26,352/- for the container freight station operated at Chennai. But under the provisions of section 80IA of the Act, the facility does not come under infrastructure facility and therefore not eligible for deduction u/s. 80IA of the Act and the assessee has furnished the explanations that the container freight station is eligible deduction u/s. 80IA of the Act But Ld. AO dealt on the disallowance of claim at Page 2 to 4 and passed order u/s. 143(3) dated 27.03.2015.
Aggrieved by the order, the assessee company has filed an appeal with the CIT(A). In the appellate proceedings, the Ld. AR argued the grounds and substantiated the case with the explanations and also supported the case with the decisions in assessee's own case for the assessment year 2009-10 passed by the Tribunal in dated 08.10.2014. The Ld. CIT(A) considered the findings of the Assessing Officer and the assessee submissions and relied on the decision of the Jurisdictional High Court in assessee's own case in TCA 479/2015 dated 23.07.2015 referred at Para 4 of the order and held "container freight stations" maintained by Chennai is a infrastructure facility u/s. 80IA of the Act and deleted the addition and allowed the appeal.
Aggrieved by the order, the Revenue has filed an appeal with the Tribunal.
Before us, the Ld. DR argued the grounds and submitted that the Ld. CIT(A) has :-5-: I.T.A. No. 2624/Mds/2016 erred in deleting the disallowance made by the Assessing Officer u/s. 80IA(4A) of the Act without appreciating the fact that the Container Freight Station cannot be classified as inland ports for the purpose of u/s. 80IA(4A) of the Act. The Jurisdictional High Court decision in the assessee's own case was not accepted by the Department and proposal for filing SLP was sent to the Board to file before the Hon'ble Supreme Court and prayed for setting aside the order of CIT(A).
Contra, the Ld. AR of the assessee relied on the orders of the CIT(A) and supported his submissions with the decision in the assessee's own case of the Jurisdictional High Court.
We heard the rival submissions, perused the material on record and judicial decisions. The Ld. DR contention that the CIT(A) has erred in deleting the addition without considering the facts that the Container Freight Station cannot be classified as inland port. Whereas, the Ld. AR filed the copy of the Jurisdictional High Court decision in assessee's own case in CIT vs Kailash Shipping Services Pvt. Ltd., in TCA No. 497/2015 dated 23.07.2015, where the Hon'ble High Court has held at Para 9 as under:
"In view of the status of CFS having been clarified by the Ministry of Commerce and Industry as 'inland ports' and the Chennai Port Trust has issued a certificate stating that the CFS of the assessee may be considered as extended arm of the Port in accordance with the CBDT Circular No. 793 dated 23.06.2000 read with Circular No. 133/98 Cus dated 22.12.1995 of the Central Board of Excise and Customs, New Delhi, we hold that the assessee is entitled to the benefit under section 80IA of the Income Tax Act."
:-6-: I.T.A. No. 2624/Mds/2016 The fact that the Revenue has not accepted the decision of Jurisdictional High Court and proposal was sent to the Board for filing the SLP with the Hon'ble Supreme Court. We are of the opinion that the Jurisdictional High Court decision is binding on the authorities in the state of TamilNadu & Puducherry. We find the Ld. CIT(A) has allowed the claim following the decision of Jurisdictional High Court in assessee's own case. Accordingly, we are not incline to interfere with the order of CIT(A) and upheld the same and dismiss the grounds of the Revenue.
In the result, Revenue appeal is dismissed.
Order pronounced on Friday, the 24th day of March, 2017 at Chennai.