DCIT, CHENNAI vs. A L LOGISTICS PVT LTD., CHENNAI

आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:

ITA No.1412/Mds/2015 :- 2 -:

14/A-I (New No. ITA 220/CIT(A)-1/2013-14) dated 18.02.2015 passed u/sec. 143(3) and 250 of the Income Tax Act, 1961.

The Revenue has raised the following grounds of appeal:- 2.

‘’2. The learned Commissioner of Income Tax (Appeals) has erred in directing the Assessing Officer to allow deduction u/s.80IA(4) of the I.T. Act to the tune of ₹3,02,65,882/-.

3. The learned Commissioner of Income Tax (Appeals) erred in allowing deduction u/s.80IA(4) to the assessee when the assessee had not developed any infrastructure facilities as it was only a custodian for the movement and handling of all containerized import/export consignment in Container Freight stations.

The Brief facts of the case is that the assessee company is a 3. licence holder of warehousing complex consisting of buildings, godowns, weigh bridge and other equipments for the purpose of maintaining a Container Freight Station (CFS) and the return was filed for the above assessment year on 22.09.2010 declaring a total income of �17,83,220/-. After claiming deduction u/s.80IA(4) for �3,02,73,659/-, the return was processed u/s.143(1) and selected for scrutiny through CASS and accordingly notice u/s.143(2) of the Act was issued. In response to the notice, the Authorised Representative

ITA No.1412/Mds/2015 :- 3 -: for assessee appeared from time to time, filed explanations and submissions in respect of Audited accounts and also claimed deduction u/s.80IA of the Act. But the ld. Assessing Officer disallowed the claim on the ground that the assessee company facility cannot be defined as infrastructure facility or considered it as a fit as a ‘port’ or ‘inland port’ as per the provisions of the Act and disallowed the deduction and assessed total income at �3,20,49,102/-. Aggrieved, by the order of the Assessing Officer the assessee filed an appeal before the Commissioner of Income Tax (Appeals)-1, Chennai.

The Revenue raised the grounds that the Commissioner of 4.

Income Tax (Appeals) erred in holding that the assessee has complied with the conditions u/s.80IA(4)(i) of the Act and infrastructure facility is eligible to claim deduction and fulfils all the conditions set out in Sec.

80IA4(i) (a)(b) & (c) of the Act.

We have heard both the parties. In our opinion, identical 5. issue was already decided in assesses’s own case in ITA No. No.469/Mds/2014, dated 14th July, 2014 wherein held as under:-

‘’5. Both sides heard. We have also perused the orders of the authorities and the decisions on which the ld.Counsel for the assessee has placed reliance. A close reading of the provisions of section 80IA(4) makes it clear that, for claiming deduction u/s.80IA(4)(i), following conditions have to be satisfied:

ITA No.1412/Mds/2015 :- 4 -: i. The undertaking should carry on the business of (a) developing or (b) maintaining and operating or (c) developing, maintaining and operating any infrastructure facility; ii. The undertaking should be owned by an Indian company; iii. There should be an agreement with the Central Government; and The undertaking should start operations on or after 1st April, iv. 1995; In the present case, the benefit of section 80IA(4)(i) has been denied to the assessee on two grounds: a. That the assessee is not providing infrastructure facility as envisaged under the Act; and b. That the assessee has not entered into an agreement with the Government or any statutory authority as provided under the provisions of section 80IA(4)(i)(b); The term ‘infrastructure facility’ has been defined in explanation to section 80IA(4)(i) as under: “Explanation – For the purposes of this clause “infrastructure facility” means – (a) a road including toll road, a bridge or a rail system; (b) a highway project including housing or other activities being an integral part of the highway project; (c) a water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system; (d) a port, airport, inland waterway [inland port or navigational channel in the sea]”.

ITA No.1412/Mds/2015 :- 5 -:

Accordingly, inland container depots and Container freight stations (i.e., customs area port) are ‘inland ports’ ”. Another letter referred to in the order of the Hon'ble High Court is from the Department of Commerce, Infrastructure Division, Ministry of Commerce and Industry. In the said letter the status of CFS was clarified. The relevant extract is reproduced as under: “3. The matter has been examined in this Department and it is clarified that inland container depots/container freight stations are inland ports. The Central Board of Direct Taxes may accordingly take decision for the purpose of exemption of inland container depots/container freight stations of Concor or a private party under section 80-IA of Income-tax Act”. The view of the Hon'ble Delhi High Court has been followed by the Special Bench of the Tribunal in the case of All Cargo Global Logistics Ltd., Vs. DCIT (supra). The relevant extract of the order of the Special Bench is re-produced herein below: “66. We find that the solitary decision in this case 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 similar 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 in containers. Thus, the issue is no longer res-integra. Respectfully following this decision, it is held that a CFS is an inland port whose income is entitled to deduction u/s.80IA(4). Question No.2 is answered accordingly”. Thus, in view of the above decisions of the Hon'ble Delhi High Court and the Special Bench of the Tribunal, it is unambiguously clear that CFS is an infrastructure facility. Hence, the first issue is decided in favour of the assessee.

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 ld.Counsel for the assessee has placed on record letter dt.27-05-2003 from the Ministry of Commerce

ITA No.1412/Mds/2015 :- 6 -: and Industry permitting the assessee to set up CFS at Haldia. The contents of the letter are reproduced herein below:

No.16/6/2003-Infra-I Government of India 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 the 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 / 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.

ITA No.1412/Mds/2015 :- 7 -: e) The working of the CFS will be open to review by the Inter Ministerial Committee. h) Formalities in respect of acquisition/possession of the land shall be completed within 60 days and intimated to the M/o Commerce, failing which the approval granted would be automatically cancelled.

ITA No.1412/Mds/2015 :- 8 -: 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.

In view of the above order of the Tribunal in assessee’s own case, we are inclined to dismiss the appeal of the Revenue.

Order pronounced on Wednesday, the 16th day of December, 2015, at Chennai.