DCIT, CHENNAI vs. SANCO TRANS LTD., CHENNAI

Shri. Sasi Kumar, the learned representative for the department submitted that the only issue arises for consideration is deduction claimed by the assessee under Section 80IA of the Act. The assessee has two container freight stations. Unit I is greater cargo handling equipment as compared to Unit II. Machineries such as TATA Crane, Crawler, Excavators, etc. are available only in Unit-I. According to the learned representative, Unit I has greater capacity to handle the cargo than Unit II. Therefore, the turn over shown by the assessee-company in Unit I is not proportionate to the area of operation in dimension. Even though the assessee was maintaining separate books of account for each unit, according to the learned representative, the same was maintained in an artificial manner for the purpose of claiming tax benefit. Therefore, the assessing officer disallowed the claim of the assessee under Section 80IA of the Act.

3 . On the contrary, Shri Saroj Kumar Parida, the learned counsel for the assessee submitted that the deduction claimed by the assessee under Section 80 IA in respect of the second unit of the container freight station was examined by this Tribunal for the assessment years 2010-11 and 2011-12 and after referring to the circular issued by CBDT Circular No.10/2005 dated 16.12.2005 found that the container freight station form part of the port, therefore, eligible for deduction under Section 80IA of the Act. In view of this, according to the learned counsel for the assessee, the issue is covered in favour of the assessee.

We have considered the rival submissions on either side and perused the relevant material available on record. No doubt this Tribunal examined the claim of the assessee under Section 80IA in respect of the two units of the container freight station and after referring to the circular issued by the CBDT No.10/2005 dated 16.12.2005, this Tribunal find that the container freight station is the part of the port therefore, eligible for deduction under Section 80IA of the Act for the assessment years 2010-11 and 2011-12. The assessing officer disallowed the claim of the assessee on the ground that there was no agreement between the assessee and the Government of India or its agency. This Tribunal, however, found that the container freight station established by the assessee being an extended arm of the port is eligible for exemption under Section 80IA of the Act. After referring to the circular issued by the CBDT, this Tribunal found that from the assessment year 2002-03, there was no need for agreement between the assessee and the Government and what is required is a certificate from the concerned port authority.

As rightly submitted by the learned counsel for the assessee and the learned department representative, the very same issue was considered by this Tribunal in the assessee’s own case for the assessment years 2010-11 and 2011-12. This Tribunal found that unit II is also eligible for exemption under Section 80IA. Therefore, the Tribunal do not find any reason to interfere with the order of the CIT(A) and accordingly, the same is confirmed.

In the result, the appeal of the revenue stands dismissed.