ACIT CC 39, MUMBAI vs. UNITED LINER AGENCIES OF INDIA P.LTD, MUMBAI

Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 21/11/2013 of the ld. First Appellate Authority, Mumbai. The only ground raised in this appeal pertains to holding that

2 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 the container freight station of the assessee is an inland port for the purposes of deduction u/s 80IA(4) of the Income Tax Act, 1961 (hereinafter the Act), relying upon the decision of the Tribunal in the case of All Cargo Global Logistics Ltd. (SB) & M/s Continental warehousing corporation.

2.1. On the other hand, the ld. counsel for the assessee contended that the impugned issue is covered by the decision of the Tribunal in the case of assessee itself (ITA No.273, 275, 943 & 944/Mum/2013) order dated 28/06/2013. Reliance was also placed upon the decision in 374 ITR 645 (Bom.) This factual matrix was not controverted by the Revenue.

2.2. We have considered the rival submissions and perused the material available on record. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, conclusion drawn in the order of the

3 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 Tribunal dated 28/06/2013, if kept in juxtaposition and analyzed, we find merit in the contention of the ld. counsel for the assessee, therefore, we are reproducing hereunder the relevant portion from the aforesaid order of the Tribunal:-

4 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 Power Ltd. (in IT Appeal No.1267 decided on 31st Aug., 2010) wherein it was held that the depreciation @ 60 per cent on such items shall be allowed.” Ld. D.R could not cite any contrary decision of any other High Court. Therefore, following the aforementioned decision we hold that assessee is entitled to get depreciation on these items @60%. This ground of the assessee is allowed. 6. Now only one issue is left which is regarding eligibility or otherwise of the assessee to claim deduction under section 80IA(4)(i) of the Act for its business activity carried on in the shape of Container Freight Station(CFS). 7. Before proceeding further it may be mentioned that assessee started claiming deduction under section 80 IA(4)(i) on CFS owned and operated by it w.e.f. A.Y.2004-05. It has been allowed such deduction for A.Y 2004-05 and 2005-06 and also for A.Y 2006-07. However, later on reassessment proceedings were initiated for A.Y 2006-07 and the impugned assessment order is result of such reassessment proceedings. During the course of these appeals it was informed to us that department has initiated reassessment proceedings in relation to A.Y 2005-06 also. Assessment for A.Y 2004-05 has attained finality as initiation of reassessment proceedings have become time barred. 8. It may also be mentioned here that Ld. CIT(A) has held that CFS of the assessee is an Inland Port (IP). For holding so he has followed the decision of Special Bench in the case of All Cargo Global Logistics Ltd. & Others vs. DCIT, 137 ITD 237 and Continental Warehousing Corporation (Nhava Seva) Ltd. Raigad Vs. ACIT (order dated 31/8/12 in ITA No.7055/Mum/2011). The decision of Special Bench in the case of All Cargo Global

5 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 Logistics Ltd. has been rendered in favour of assessee by following the decision of Hon’ble Delhi High Court in the case of Container Corporation of India Ltd. (CCI) vs. ACIT, 346 ITR 140, wherein question of deduction under section 80 IA(4)(i) in respect of Inland Container Depot (ICD) was considered by Hon’ble Delhi High Court. It is observed by Special Bench in its decision that the case of CFS is similarly situated with the case of ICD as both of them carried out similar functions i.e. warehousing, customs clearance and transport of goods from its sea port and vice versa by railways or by trucks in containers. It is clear from the following observations of the Special Bench: “66. We find that the solitary decision in this case by any High Court is in the case of Container Corpn. of India Ltd. (supra). 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 80-IA(4). Question No. 2 is answered accordingly.” (Emphasis ours) 9. The history of legislation leading to notify “Inland Water Ways and Inland Ports” in the definition of “Infrastructure Facility” in sub-section (12) clause (ca), w.e.f. 1/4/1999 has been noted to be incorporated by Finance (No.2) Act, 1998. The relevant clause after such amendment read as under: “infrastructure facility” - means (i) a road, bridge, airport, port, inland waterways and inland ports, rail system or any other public facility of a similar nature as may be notified by the Board in this behalf in the Official Gazettee.”

6 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 10. Board in its Circular No.772 dated 23/12/1995, 235 ITR St.35,67 in para 43.2 has explained the inclusion of “inland waterways and inland ports”. The definition of “infrastructure facility” is as under:- 43.2 The Government has identified national waterways, the fourth mode of transport, for improving the transport infrastructure in the country. Inland waterways and inland ports play a vital role in improving a country’s infrastructure. With the objective of improving the transport infrastructure, the Act has included inland waterways and inland ports in the definition of ‘infrastructure facility’ as given in section 80-IA. The undertakings engaged in the development of such infrastructure would be entitled to two- tier fiscal benefits as outlined above.” (underlining ours) 11. In view of the aforementioned legislation for the first time from A.Y 1999-2000 inland ports started enjoying the deduction under section 80IA as an infrastructural facility. The object for insertion of this provision was to strengthen and improve country’s infrastructure in general and transport infrastructure in particular. Inland ports facilitate the transport infrastructure by taking care of the transport of customs cleared goods meant for export from ICD/CFS to the sea port and the imported goods directly from sea port to ICD/CFS where then can be customs cleared. The entire section was recasted by Finance Act 1999 w.e.f.. 1/4/2000 and even after several amendments made to that section, inland ports continue to enjoy the deduction as infrastructural facility. 12. Reference can also be made to the notification issued by CBDT No.S.O.744(E) dated 1/9/1998 for the purpose of section 80 IA(12) (ca), 233 ITR (St) 126, the text of which is as follows:

7 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 “Board of Direct Taxes hereby notifies inland container depot (ICD) and Central freight station (CFS) as infrastructure facility: Provided that such places are notified as inland container depot and Central freight station under section 7(aa) of the Customs Act, 1962.” 13. Subsequently, the Board issued Circular No.793 dated 23/6/2000, 244 ITR (St) 103 postulated as follows: “The Board has received various representations seeking clarification whether structures at ports for storage, loading and unloading etc., will fall under the definition of ‘port’ for the purposes of sections 10(23G) and 80-IA of the Incometax Act, 1961. 2. The Board has considered the matter and it has been decided, that such structures will be included in the definition of “port” for the purposes of sections 10(23G) and 80-IA of the Income-tax Act, L if the following conditions are fulfilled: (a) the concerned port authority has issued a certificate that the said structures form part of the port, and (b) such structures have been built under BOT and BOLT schemes and there is an agreement that the same would be transferred to the said authority on the expiry of the time stipulated in agreement.” 14. This Circular was issued by the Board with regard to representations seeking clarification on whether structures at ports for storage, loading and unloading etc. would fall within the definition of Port, inter-alia, for the purpose of section 80 IA of the Act. The Board clarified that such structure would be included in the definition of Port for the purpose of section 80 IA of the Act, subject to the fulfillment of the condition that the Port Authority must issue a certificate that the structure form a part of the Port; that such structures had been built under the BOT or BOLT scheme and there is an agreement for the transfer of the

8 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 structure to the authority after fulfillment of the stipulated period. Such circular clearly postulated a concession being given in respect of a particular facility at Port, namely, a facility involved storage, loading and unloading. Subsequently Circular No.10 of 2005 dated 16/12/2005, 280 ITR (St) 1 was issued by CBDT which made a reference to the earlier circular dated 23/6/2000 and clarified that the definition of the expression “Port”, for the purposes of section 80 IA of the Act, includes structures at Ports for storage , loading and unloading etc., subject to fulfillment of the conditions already noted earlier, would apply to assessment year 2001-02 and any earlier assessment year. However,. From assessment year 2003-03 onwards, the condition requiring that structure should have been completed under a BOT or BOLT scheme and that there should be an agreement for transfer of the facility to the competent authority on the expiry of the stipulated period was deleted. The said Circular is reproduced below: Circular No. : 10 Date of Issue : 16.12.2005 Section(s) Referred : 10(23G) 180-IA Statute : Income-Tax Act Definition of Port as Infrastructure facility for the purpose of sections 10(23G) and 80-IA of the Income-tax Act, 1961 1. Reference is invited to Board’s Circular No. 793, dated 23-6-2000 and amendment in section 80-IA by the Finance Act, 2001. 2. “Port”, for the purposes of sections 10(23G) and 80-IA of the Income-tax Act, 1961, includes structures at the ports for storage, loading and unloading etc., if the following conditions are fulfilled:

9 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 (a) the concerned port authority has issued a certificate that the said structures form part of the port, and (b) such structures have been built under the BOT or BOLT schemes and there is an agreement that the same would be transferred to the said authority on the expiry of the time stipulated in the agreement. This definition is applicable to assessment year 2001-02 and any earlier assessment year. 3. However, for and from assessment y 2002-03 onwards, structures at the ports for storage, loading and unloading etc. will be included in the e on of 10(23G) and 80-IA of the Income-tax Act, 1961, if the following condition is fulfilled: the concerned port authority has issued a certificate that the said structures form part of the port ,Circular : No. 10/2005, dated16-12-2005’ 15. (i) In the present case the approval was granted to the assessee vide letter No. 16/20/97-Infra-I dated 17/09/1998 issued by Ministry of Commerce-Infra-I section to set up CFS at Dronagiri Node, Navi Mumbai, subject to certain conditions. Copy of this letter is filed at page-6 of the paper book. (ii) Vide letter dated 19/3/2003 Commissioner Customs Export, Nhava Seva, Ministry of Finance (Department of Revenue) has issued notification No.4 of 2003 vide which CFS of the assessee is declared as Customs area for the purpose of storage, stuffing/destuffing and clearance of export/import (bonded as well as for home consumption) goods. This notification is issued in pursuance to power conferred on Commissioner of Customs Export under section 8 of the Customs Act, 1962. Copy of this notification is placed at page - 8 of the paper book. (iii) On the same date the same authority has also issued notification No.5/2003 vide which Commissioner of Customs, under the provisions of section 8 of the Customs Act, has notified

10 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 the container road linking JNPT/NSICT container gate, container freight station, United Linear Agencies of India (P) Ltd., Sector -8, Dronagiri Node, as “Customs Area” for the purpose of transport of import and export cargo. Copy of this notification has been placed at page 9 of the paper book. (iv) On the same date notification No.6/2006 has been issued by the same authority and it has been declared that assessee will be custodian of the goods till they are cleared for the home consumption or/ are warehoused or/ are transshipped under the provisions of Chapter 8 of the Customs Act, 1962. Copy of this notification is placed at page 10 of the paper book. (v) Vide letter dated 26/3/2003, Executive Engineer of Industrial Development Division has issued occupancy certificate to the assessee for its CFS. Copy of this certificate is placed at page 11 of the paper book. (vi) Vide leller dated 26/9/2005 the assessee submitted an application to the Chairman, Jawaharlal Nehru Port Trust, Nhava Seva, Navi Mumbai for issue of certificate required by Income Tax Department, copy of this application is placed at Page-15 & 16 of the paper book. In the said application it was submitted by the assessee that its CFS is working at its full capacity in the first year and assessee is planning for further expansion. The Commissioner of Customs has declared CFS as “Customs Area” under section 8 of the Customs Act, 1962. The assessee is claiming exemption under section 80 IA for its CFS. As a result of various representations made by the Association, CBDT has issued a circular, according to which the structure put up for storage, loading and unloading of cargo intended for

11 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 export will fall under the definition of Port for the purpose of section 10(23G) and 80 IA if the concerned Port Authority has issued a certificate that the said structure form part of the Port. Copy of the said circular was submitted. Reference was also made to clause 2(b) of the circular dated 23/6/2000 regarding agreement and transfer under BOT or BOLT scheme and it was submitted that the said stipulation for transfer of facility has been withdrawn by Finance Act 2001. Reference to Circular No.133/95-Custom dated 22/12/1995 was also made in which in para No.2 it was mentioned “generally, CFS is taken to be an extended arm of port” and it was submitted that a certificate be issued. Copy of this letter is filed at page 15-16. (vii) Copy of Certificate No.JNP/CM(O)/2006/830 dated 31/3/2006 issued by JNPT is placed at pages 18 of the paper book. The text of which is as under: “JNP/CM(O)/2006/830 Dated: 31st March,2006 “TO WHOMSOEVER IT MAY CONCERN” This is to certify that Container Freight Station activities of M/s. United Agencies Pvt. Ltd. (ULA) located at Sector 8 of Dronagiri, Bhendkal village, Taluka Uran, Dist. Raigar, Navi Mumbai 400 007 may be considered as an extended arm of the Port related activities in accordance with circular No.133/95- Cus dated 22.12.1995 of Central Board of Excise and Customs, New Delhi. They have commended their commercial operations with effect from March 2003 vide Customs notification No. 4/2003 dated 19/03/2003. The above said CFS is situated on land that does not belong to the Port. It is further stated that the Container Freight Station of M/s. United Liner Agencies Pvt. Ltd. (ULA) has not been built under BOT or BOLT scheme and there is no agreement that the said CFS would be transferred to JNPT on the expiry of the time

12 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 stipulated in the agreement as per the circular no.793 dated 23.06.2000 issued by the Income Tax Department. This certificate is issued at the request of M/s. United Agencies Pvt. Ltd. (ULA) vide their letter dated 26.09.2005. Sd/- (R.T.Revankar) Chief Manager (0perations)” (emphasis ours)

13 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 (3) Circular issued by CBDT also describe “ structures at the Ports”, therefore, even according to Circulars the claim of the assessee cannot be accepted. (4) Subsequently, in the letter obtained from JNPT dated 14/12/2011 it was made clear that the said certificate dated 31/3/2006 was subsequently withdrawn for preventing its misuse and thus it was clear that assessee was misusing the letter dated 31/3/2006 issued by JNPT. The aforementioned certificate issued on 31/3/2006 was withdrawn by JNPT vide letter dated 5/10/2007 with the following observations: “It is hereby brought to the notice that certificate issued to M/s. United Liner Agencies Pvt. Ltd. (ULA) vide our letter No.JNP/CM(O)/2006/830 dtd. 31/03/2006 based on their request dated 26.09.2005 is hereby treated as withdrawn for the purpose of availing any benefit under Income Tax Act or any other statutory acts in India. It should be brought to the notice of all concerned to whom it has been produced for the purpose of availing any concession /benefit.” 5. Subsequent letters issued by JNPT have also established that the assessee is not entitled to claim deduction under section 80IA(4), such as (i) Letter dated 8/12/2011 – CFS structure of the assessee does not form part of the JNPT i.e. Port; (ii) letter dated 29/11/2011 vide which it was clearly mentioned that distance of the assessee’s CFS from JNPT is 15 Kms. away from the Port and they have also mentioned that assessee’s CFS is providing the services of storage, stuffing, destuffing and clearance of import and export of goods. (6) Following observations of CBDT in its letter dated 6/1/2011 debars the assessee to claim deduction under section 80 IA(4)(i) of the Act in which it was mentioned that ICDs and CFS not

14 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 located at the Port are not a part of the Port for the purpose of section 80 IA(4) : “An ICD or a CFS is usually not located at the port and therefore it is not a part of the Port for the purpose of section 80IA(4)(i) and not covered by the Circular No.10/2005 dated 16/12/2005 and Circular No.793 dated 23.06.2000 on the subject.” “Reference have also been received as to whether Inland Container Depots (ICDs) and Container Freight Station (CFS) can be termed as Inland Ports and thereby classified as infrastructure facility under Section 80IA(4)(ii) of the Income Tax Act, 1961. In this context, I am further directed to convey that the Board has considered the same and it has been decided that and ICDs and CFS are not ports located on any inland waterway, river or cannal, and thereby they cannot be classified as inland ports for the purpose of Section 80IA (4)(i) of the Income Tax Act.” 17. In the above manner A.O has discarded the claim of the assessee regarding deduction under section 80IA(4) of the Act. Aggrieved, assessee filed an appeal before Ld. CIT(A). The submissions made before A.O were reiterated before Ld. CIT(A). Reference was made to the following decisions: (a) All Cargo Global Logistics Ltd. vs. DCIT,137 ITD 287 (SB) (b) Continental Warehousing Corporation vs. ACIT, order dated 31/8/2012 in ITA No.7055/Mum/2011, “C” Bench Mumbai, copy placed at page 17 to 27 of the paper book. (c) Container Corporation of India Ltd. vs. ACIT, 346 ITR 140(Del) 18. Considering all the aforementioned decisions Ld. CIT(A) has held that CFS of the assessee is an “Inland Port” within the meaning of explanation (d) to section 80 IA(4)(i) of the Act and “Inland Port” is one of the infrastructure facility which is

15 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 eligible to claim deduction under section 80 IA(4). However, the assessee did not fulfill other conditions specified in section 80IA(4). In this regard Ld. CIT(A) has referred to the provisions of section 80IA(4) of the Act and also the decision of Hon’ble Bombay High Court in the case of CIT vs. ABG Heavy Industries Ltd., 322 ITR 323 (Bom). The Ld. CIT(A) has arrived at the conclusion that as assessee did not enter into an agreement with the authority, which is mandatory condition, therefore, the assessee is not entitled to get deduction under section 80IA(4). Ld. CIT(A) has mentioned that in none of the decisions relied upon by the assessee it has been held that there is no requirement to enter into an agreement as provided in clause (b) of section 80 IA(4)(i) of the Act. Therefore, for want of fulfillment of condition laid down in section 80 IA(4)(i)(b) Ld. CIT(A) has decided the issue against the assessee. 19. The assessee in its appeal is agitating the decision of Ld. CIT(A) regarding non-fulfillment of condition laid down in sub- clause(b) of section 80 IA(4)(i). The department in its appeal is agitating to the decision of Ld. CIT(A) vide which assessee’s CFS has been held to be “Inland Port”. 20. Both the parties had argued this issue at length and their submissions in brief are as under: 21. Ld. A.R after reiterating the submissions as made before authorities below submitted that there is no specific requirement laid down in section 80 IA(4)(ib) that agreement should be in writing. An oral agreement is sufficient and that can be seen in the form of correspondence and approvals obtained by the assessee from Finance Ministry, Commerce Ministry and JNPT.

16 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 The word “approve” as per Oxford Dictionary means “official accept as satisfactory”. The word “approval’ means the action of approving. As per Black’s Law Dictionary the word “approve” is defined as “ to give formal sanction; to confirm authoritatively”. Thus it is the case of Ld. AR that approval means that there is an agreement. He in this regard referred to the letters issued by Finance Ministry, Commerce Ministry and JNPT, copies of which are placed at pages 6- 8,9,10,17 &18 of the paper book, which shows the approval was accorded by various authorities. By Finance Act (No.2) the necessity to have an agreement to transfer infrastructure facility under BOT/BOLT was removed. Reference was made to the memorandum of explaining Finance Bill, 248 ITR 166(St), wherein it was mentioned “it is also proposed to do away with the mandatory requirement that such infrastructure facility shall be transferred to the Central Government, State Government, Local Authority or any other Statutory Authority. The amendment was made applicable from assessment year 2002-03 onwards. It was further argued by Ld AR that as per section 2(b) of the Contract Act an agreement does not need to be in writing. As per provisions of section 164A oral trust are taxed at maximum marginal rate. Even according to section 194C tax is liable to be deducted even in a case where contract is not reduced into writing. 22. Ld AR further argued that according to the principle of consistency, as department has granted the deduction to the assessee in A.Y 2004-05, the same cannot be withdrawn for subsequent years. For this purpose Ld. A.R has referred to the decision of Hon’ble Bombay High Court in the case of CIT vs. Paul Brothers 216 ITR 548(Bom), wherein deduction under

17 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 section 80 HH and 80J was granted for A.Y 1980-81 and subsequently these deductions were sought to be withdrawn under section 263 by CIT. It was held by the Hon’ble High Court that either in section 80HH or in section 80J there is no provision for withdrawal of special deduction for the subsequent years for breach of certain conditions. Hence, unless relief granted for A.Y 1980-81 was withdrawn, ITO could not have held the relief for the subsequent years. For holding so their Lordship have followed the decision of Hon’ble Gujarat High Court in the case of Saurashtra Cement and Chemical Industries Ltd., 123 ITR 669. Reference was also made to the following observations from the said decision of Hon’ble High Court. “Either in section 8OHH or in section 80J, there is no provision for 1 withdrawal .of special deduction for the subsequent years for breach of certain conditions. Hence unless. the relief granted for, the assessment year 1980-81 was withdrawn, the Income-tax Officer could not have withheld the relief for the subsequent years. [See Gujarat High Court decision in the case of Saurashtra Cement and chemical Industries Ltd. v.CIT [1980] 123 ITR 669].” 23. It was submitted that the grant of deduction is squarely covered in favour of the assessee by the decisions relied upon by the assessee before Ld. CIT(A) and various circulars issued by CBDT and it has wrongly been disallowed by Ld. CIT(A) simply on the basis of non-existence of agreement. Ld. AR submitted that the facts of the assessee’s case are similar to the facts of the cases in which the assessees owning CFS have been allowed similar deduction by the Special Bench. Reference was made to the decision of ITAT in the case of Continental Warehousing Corporation vs. ACIT(supra), where the fact of non-existence of agreement was also noted as it was one of the ground taken by

18 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 AO for disallowance of deduction. Thus it was pleaded by Ld. A.R that the claim of deduction has wrongly been denied and it should be allowed to the assessee. 24. The arguments of Ld. DR in reply to the Ld. AR’s arguments as well as arguments with regard to the appeals filed by the revenue are as under: 24.1 Ld. D.R submitted that AO was right in holding that assessee’s structure of CFS not being situated at Port is not eligible for deduction under section 80 IA(4) of the Act. He submitted that in the circulars the word used by CBDT are “at Port”, therefore, even according to those circulars assessee’s CFS being situated at a distance of 15 Kms from the main port cannot be considered to be eligible for deduction under section 80 IA(4). Ld. D.R submitted that certificate granted by JNPT was subsequently withdrawn and, therefore, the said certificate dated 31/3/2006 does not advance the case of the assessee in view of its withdrawal in the year 2007. Ld. D.R made reference to the clarification issued by CBDT dated 6/1/2011 vide which it was clarified that CFS structures which are not situated at Port are not entitled for deduction under section 80 IA(4). Thus, it was pleaded by Ld. DR that assessee’s CFS does not come within the definition of “Port” or “Inland Port”. 24.2 Ld. D.R further submitted that the arguments raised by Ld. AR regarding consistency also does not support the case of the assessee as the principle of consistency rest upon doctrine of res- judicata which according to the well established law is not applicable to Income tax matters. Reference was made to the decision of Hon’ble Supreme Court in the case of New Jahangir

19 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 Vakil Mill Company Ltd. vs. CIT 49 ITR 137 (SC), wherein it was held by the Court that revenue can reopen a question obviously decided if fresh facts come to light or if earlier decision was rendered without taking into consideration material evidence etc. Similar proposition was laid down in the decision in the case of Broken Hill Proprietary Company vs. Broken Hill Municipal Council (1926) AC 94 and Hoystead Vs. Commissioner of Taxation (1926) AC 155. Referring to above decisions it was pleaded by Ld. D.R that there is no estoppels in Income tax matter and each year is assessable independently of the earlier years. The AO can take a position on the earlier years income, without reopening those years, for assessing the nature of the current years income and reliance was placed on the decision in the case of M.M. Ipoh vs. CIT, 67 ITR 103(SC),Dwarakadas Kesardeo Murarkha vs. CIT, 44 ITR 529. Reference was also made to the decision of Hon’ble Bombay High Court in the case of Baijnath Brijmohan & Sons Ltd. vs. CIT, 161 ITR 234, wherein their Lordships have observed as under: “An assessment for a particular year is final and conclusive between the parties only in relation to that year and the decision given in an assessment for an earlier year is not binding either on the assessee or the Department in a subsequent year. But this rule is subject to limitations, for there should be a finality and certainty in all litigations including litigation arising out of the Income-tax Act, and an earlier decision on the same question cannot be reopened if that decision is not arbitrary or perverse, if it had been arrived at / after due inquiry, if no fresh facts were placed before the Tribunal giving the later decision and if the Tribunal giving the earlier decision has taken into consideration all material evidence. There is also a further limitation, namely, that the effect of revising a decision in a subsequent year should not lead to injustice and the court must always be anxious to avoid injustice to the assessee. In

20 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 the present case, we have to bear in mind that the authority which changed its stand was not the Income-tax Appellate Tribunal but the Income-tax Officer. Quite apart from this, in the present case, the Tribunal took the view that the earlier view taken by the income-tax authorities appeared to be patently unwarranted on the facts. In fact, as the Tribunal has pointed out in paragraph 6 of its order, the facts established by the assessee were so scanty and so much against the assessee that the Tribunal was left with no option but to hold that the action of the income-tax authorities was correct.” 24.3 Ld. D.R further referred to the decision of ITAT Mumbai Bench in the case of ACIT vs. Hitesh S. Bhagat order dated 15/5/2013 in ITA No.6586/Mum/2010, wherein following aforementioned decision of Hon’ble Supreme Court in the case of New Jahangir Vakil Mill Company Ltd. vs. CIT(supra) it was held that doctrine of res-judicata is not applicable. Ld. DR also referred to the decision of Hon’ble Andhra Pradesh High Court in the case of B.R. Construction, 73 Taxmann 473(AP)(FB) to contend that precedent ceases to be binding precedent in the following conditions: “29. It may be noticed that precedent ceases to be binding precedent- (i) if it is reversed or overruled by a higher court, (ii) when it is affirmed or reversed on a different ground; (iii) when it is inconsistent with the earlier decisions of the same rank (iv) when it is sub silentio and (v) when it is rendered per incuriam.”

Ld DR also referred to the decision of Ahmedabad ITAT in the case of Kanel Oil & Export Industries Ltd. vs. JCIT, 121 ITD 596, wherein it was held that judgment of non-jurisdictional

21 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 High Court would prevail upon the Special Bench decision on the basis of principle that High Court is above the Tribunal in judicial hierarchy. Ld. DR also relied upon the decision of K.P. Choudhary vs. State of Madhya Pradesh, 1967 AIR 203(SC) to contend that contract with the Government should be executed in the manner provided in Article 299(1) of the Constitution of India and unless it is so executed it will not be a binding contract. Thus it was pleaded by Ld. DR that assessee’s contention that there could be an oral agreement should not be accepted. In this manner Ld. D.R concluded his arguments. 25. We have carefully considered the submissions of both the parties. We have also carefully gone through the assessment order as well as order passed by Ld. CIT(A). We have also carefully gone through the papers and documents referred before us along with case laws relied upon by both the parties. It is the main case of AO that assessee’s CFS not being structure situated “at Port” is not eligible for deduction under section 80IA(4) of the Act. According to A.O even in the circulars issued by CBDT the stress is on the structure situated at Port. The certificate issued by JNPT was later on withdrawn and subsequently CBDT vide its circular dated 6/1/2011 has made it clear that structures at port in the shape of CFS and ICDs are only eligible for deduction under section 80IA(4) of the Act. So far as it relates to all these issues raised by the AO to deny the deduction to the assessee, we find that all these issues were raised by the revenue while agitating the grant of similar deduction to the other assessees in similar cases. Despite all these arguments of the revenue, Special Bench has held that assessees are entitled for deduction under section 80IA(4) . To make it clear that all these

22 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 issues were raised by the revenue before the Special Bench, we may refer to the following observations of the Special Bench: 63. The submission of the Ld. Counsel in the case of All Cargo Global Logistics Ltd. is that the Hon’ble Delhi High Court has held that ICDs are landlocked and situated far off from the sea port such. The ICDs of the Container Corporation of India are located at places such as Jamshedpur, Jodhpur, Jaipur, etc. These have been held to be inland ports for the purpose of deduction u/s 801A(4). The case of the assessee is better placed than the case of Container Corporation of India Ltd. in as much as it is situated 5 kms away from the port and it is a part of the port for carrying out activities mentioned earlier. Customs- clearance takes place from assessee’s CFS. Therefore, it is argued that the assessee is entitled to deduction u/s 801A. 64. In reply, the Ld. Standing Counsel submitted that whenever the assessee claims an income to be exempt from tax or claims a deduction, the pre-conditions for exemption or deduction have to be strictly satisfied by him, as held in the case of M/s. Novopan India Ltd., Hyderabad vs. Collector of Central Excise and Customs, Hyderabad (1994)3SCC 606. In respect of this decision, he laid stress on the finding that liberal and strict construction of exempt provision are to be invoked at different stages of its interpretation. When the question is whether a subject falls in the notification or in the exemption clause then it being in the nature of exemption is to be considered strictly and against the subject but once the ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction. In the light of this decision, he dealt with the claim of the assessee u/s 8O(IA). It is submitted that in Board clarification dated 6.1.201 1, in which circulars dated 16.12.2005 and 23.6.2000 were considered, it has been clarified that ICDs, and CFSs are not ‘ports’ located on any inland water way , river or canal and therefore they cannot be classified as “inland ports” for the purpose of section 80(IA)(4). It is further submitted that the certificate issued by Jawahar La! Nehru Port Trust has been withdrawn by the Port Trust. It is also submitted that Inland Waterways Authority of India Act, 1985,

23 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 provides the definition of the term “infrastructure facilities”, in its clauses (f), as the structures such as docks, wharves, jetties, stages, locks, buoys, inland ports, cargo handling equipments, road and rail access and cargo storage spaces and states that the expression “infrastructure facilities” shall be construed accordingly. In this Act, inland port is included as item, thus, this term has a distinct meaning, separate and apart from other terms. Therefore, ICDs and CFSs cannot be interpreted to be included in the term “inland port”. It is also submitted that circular No. 74/97- cus. dated 30.12.97 of the Central Board of Excise and Customs makes a distinction between inland ports and ICDs /CFSs for grant of duty draw back benefit. It is also submitted that a study prepared by Transport and Tourism Division of Economic and Social Commission for Asia and pacific (a division of the United Nations) provides an insight in the concept of” inland port” vis. a vis. “sea port”. It is mentioned there that access should be provided to inland ports through waterways from sea by developing them. 65. We have considered the facts of the cases and submissions made before us. It may be mentioned that one of the arguments advanced by the Ld. Counsel for the assessee is that the case of Container Corporation of India is not based on any of the circulars issued by the Port authorities, however, the CFS the assessee has been granted such certificate. The certificate mentions that the CFS carries on port related activities, and it may be considered as an extendable activity of the port related activities. It is clarified that the CFS has not been built on BOT or BOLT Scheme and that it is situated on land which does not belong to the port. The letters written by port trust to the assessee also state that the matter has been referred to the Income Tax Department. The department has clarified that an ICD/CFS does not constitute an inland port. in the case of CIT Vs. ABG Heavy Industries Ltd., 189 Taxman 54, the Hon’ble Court has held that the assessee is entitled to deduction u/s 801A. However there is a very salient difference in facts that structures were located at port and such structures had to be handed over to the Port Trust on expiry of the period of agreement. In the case at hand it is clear that the assets of the CFS are not to be handed over to the Port Trust at any point of time as it is not built on BOT

24 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 & BOLT Scheme. The CFS is also not located at the Port. As against the aforesaid, the Ld. Standing Counsel has submitted that clarifications issued by other authorities including Central Board of Excise and Customs under the relevant Acts do not lay guidelines under the Income Tax Act and that the matter has to be decided under the Income Tax Act independently. For doing so, initially a strict interpretation has to be placed on the words “inland port” to examine that the assessee is entitled to the deduction. CBDT has furnished opinion that ICDs and CFSs are not entitled to such deduction as they do not constitute inland ports. Other Acts as well as study report lead to the conclusion that a port can be said to be an inland port only if it has an access to the sea via a water-way. 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 m 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. (Emphasis given by us) 25.1 The relevant portion of the Special Bench decision have been emphasized to show that the arguments of A.O and Ld. D.R in the present case are similar to the arguments raised by Revenue before Special Bench. Before Special Bench it was the case of the assessee that of CFS owned by them are better placed as ICDs considered in the case of Container Corporation of India(Supra) were located far away at the places like Jameshedpur, Jodhpur,Jaipur etc. The CFS were situated nearly 5 Kms away from the Port. In the present case also CFS of the assessee is situated only 15 Kms away from the Port. So for the

25 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 grant of deduction under section 80 IA(4), as per decision of Special Bench in the case of All Cargo (supra) and decision of Delhi High Court in Container Corporation of India (supra), it is not a condition precedent that CFS of the assessee should be situated at port. So, nonsituation of the CFS of the assessee at port does not disentitle it from claiming deduction u/s. 80 IA(4). 25.2 In the present case also the assessee has been provided with a certificate by JNPT that the assessee’s CFS is an extended arm of the Port and similar certificate was provided in the cases dealt with by Special Bench according to highlighted portion of the decision of Special Bench. Such certificate issued by JNPT was also withdrawn in those cases (para 64). Such withdrawal by the JNPT was not considered as material by the Special Bench for denial of deduction under section 80IA(4). Moreover, in the certificate dated 31/3/2006, JNPT has clearly stated that assessee’s CFS may be considered as an extended arm of the Port related activities in accordance with Circular No.133/95 dated 22/12/95 issued by Central Board of Excise & Customs, New Delhi, whereas in the so called withdrawal letter, which is highly relied upon by the revenue, it has no where been stated that how and on what basis the CFS of the assessee has suddenly ceased to be an extended arm of the Port. Both the letters ( Dt. 31/3/2006 & 5/10/2007) are reproduced in Para 16 of this order and from their perusal it can be seen that though the letters dated 31/3/2006 stated the basis on which assessee’s CFS has been considered to be an extended arm of the Port but in subsequent letter dated 5/10/2007 no basis has been mentioned. Such withdrawal letter dated 5/10/2007 cannot take any precedence

26 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 over the judicial view taken by Special Bench in the case of All Cargo Global Logistics Ltd. vs. DCIT(supra). 25.3 It was also one of the arguments before Special Bench by the revenue that Board vide its clarification dated 6/1/2011 by considering the earlier circulars dated 23/6/2000 and 16/12/2005, has clarified that ICDs and CFS are not “Ports” located on any Inland water way, river or canal and therefore, they cannot be classified as Inland Ports for the purpose of section 80 IA(4). The said circular was also not considered sufficient for denial of deduction to the assessee. Reference in this regard also can be made to the highlighted portion of the observations existing in para-64 of the order of Special Bench and it can be seen that despite such argument raised by the revenue, Special Bench has held that CFS was entitled for deduction under section 80 IA(4).. 25.4 Thus it can be seen that the arguments of the AO to deny the claim in the present case are same as they were raised before the Special Bench and these arguments of the revenue were not accepted and the assessee in Special Bench cases were held to be eligible for deduction under section 80IA(4) of the Act. According to precedent Division Bench is bound by the decision of Special Bench particularly when arguments for denial of deduction by the revenue are similar to the arguments which were raised by the revenue before the Special Bench and the facts and circumstances are not shown to be different in any manner. It was specifically argued before us by the Ld. A.R that facts of the present case are similar to the cases before Special Bench and such arguments of Ld. A.R have not been rebutted by

27 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 the Department by specifically pointing out that there is some difference in the facts and circumstances of the present case when they are compared to the facts of the cases before Special Bench. 25.5. So far as it relates to the aspect of consistency which was argued at length by both the parties. Ld. D.R while objecting to the submission of Ld. AR on the issue of consistency has relied on the decision in the case of B.R. Construction (supra) in which it has been held that broadly principle of consistency will cease to be binding precedent in five circumstances which are listed in para 24.3 of this order. It is the case of Ld. DR that the order of Special Bench is sub-silentio, therefore, it ceases to be a binding precedent. We do not find any force in such argument of Ld. D.R as the order of Special Bench cannot be said to be sub-silentio as all the contentions of the Revenue are considered and the matter is decided in accordance with solitary decision of Hon’ble Delhi High Court available on the issue. Even till date revenue has not been able to cite any decision of any other High Court in which contrary decision is taken. The cases of CFS are better placed from the cases of ICD’s considered by Hon’ble Delhi High Court and Hon’ble Delhi High Court even without referring to the circulars of CBDT dated 23/6/2002, 16/12/2005 has held that ICD being infrastructure facility is Inland Port and is eligible for deduction u/s. 80 IA(4) of the Act. Therefore, there is no breach of principle of consistency and applying the rule of consistency the benefit of deduction under section 80IA(4) has to be granted to the assessee.

28 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 25.6 In any case Board’s clarification dated 6/1/2011 can only be said to be judicial interpretation of the scope and ambit of the provision of the Act. According to well established law a circular/clarification cannot even impose on the tax payer a burden higher than what the Act itself, on a true interpretation envisages. The task of interpretation of law is an exclusive domain of the Courts. Reference in this regard can be made to the three judges decision of Hon’ble Supreme Court in the case of Keshavi Raoji & Company vs. CIT, 183 ITR 1(SC) “The Board cannot pre-empt a judicial interpretation of the scope and ambit of a provision of the Act by issuing circulars on the subject. This is too obvious a proposition to require any argument for it. A circular cannot even impose on the taxpayer a burden higher than what the Act itself, on a true interpretation, envisages.” 25.7 Therefore, also in view of interpretation taken by Special Bench in the light of decision of Hon’ble Delhi High Court in the case of Container Corporation of India Ltd. (supra), the clarification issued by CBDT dated 6/1/2011 cannot come into play to disentitle the assessee from claiming deduction under section 80IA(4) as the view of the Special Bench and Hon’ble Delhi High Court would prevail against the view taken by CBDT. 25.8 Though Ld. CIT(A) has accepted the claim of the assessee that CFS are Inland port within the meaning of section 80IA(4) on the basis of aforementioned decision of Special Bench, decision of Hon’ble Delhi High Court in the case of Container Corporation of India Ltd.(supra) and the decision of ITAT Mumbai in the case of Continental Warehousing Corporation (supra) - but at the same time Ld. CIT(A) has held that assessee did not fulfill the other condition of entering into agreement with

29 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 the designated Authority as envisaged in sub-clause (b) of sub- section(4) of section 80 IA. The clause (b), as it is applicable for the year under consideration, read as under: (b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility;] 25.9 Both the parties have also argued on this issue at length. As mentioned earlier it is the case of the assessee that it is not necessary to have a written agreement. As against that it is the case of revenue that the agreement should be in writing and it should be in accordance with the provisions of Article 299(1). We have given careful thought to such arguments raised before us. The reply of the assessee dated 27/12/2011 submitted in response to show cause notice issued by AO has been reproduced in the assessment order in para 3.3 for A.Y 2006-07. In the reply reference has been made to both circulars issued by CBDT dated 23/6/2000 and dated 16/12/2005 and the relevant portion of those submissions are reproduced below: “The Central Board of Direct Taxes (CBDT) vide its circular no. 10 of 2005, dated 16th December. 2005 (Annexure 1) has relaxed the conditions to be fulfilled towards creation of structures at the ports for staring, loading and unloading to form part of the definition of “ports” and, thereby, become entitled far the tax concessions available for developing operating or maintaining infrastructure facilities such as ports. According to the Revenue Department a certificate from the port authority concerned stating the structures form part be enough for counting them as part of ports for the purpose section 10(23G) and section 80IA of the Income Tax Act. The relaxation would be applicable with retrospective effect

30 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 from 2002-03. For 2001-02 and earlier assessment years, two conditions have to be met for the structures should have been built under the build, operate and transfer (BOOT) or build-own-operate-transfer (BOOT) scheme and that these would be transferred the port authority on the expiry of the time stipulated in the agreement “From the assessment year 2002-03 there would only one condition, - that there is certificate issued by the Port Authorities” In other words for and from the assessment year 2002-03 onwards, structures at the ports for storage loading and unloading etc will be Included in the definition of “port’ for the purpose of sections 10(23G) and 80 IA of the Income tax Act, 1961, if the following condition is fulfilled: - the concerned port authority has issued a certificate that the said structures form part the port. In our case we had a Container Freight Station at JNPT and that fact has not been disputed and has In fact been acknowledged by JNPT vide their Certificate dated 31-03- 2006”. (Emphasis ours) 25.10 In the aforementioned reply the assessee has explained that vide Circular issued on 23/6/2000 two conditions were to be complied to get the deduction. First was to obtain a certificate from concerned Port Authority that CFS Structure form part of the Port and the second condition was that such structure should have been built under BOT or BOLT scheme and there is an agreement that the same would be transferred to the State Authority in the time stipulated in the agreement. This circular was applicable upto assessment year 2001-02 and earlier years. For and from assessment year 2002-03 the Board has relaxed the second condition vide circular dated 16/12/2005, according to which for claiming deduction under section 80IA(4) by the CFS, the only requirement was to obtain a certificate from the concerned Port Authority that the structure of CFS form part of

31 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 the Port. While holding that assessee is not entitled to get deduction under section 80IA(4) for want of agreement stipulated in clause (b) of section 80IA(4)(i), Ld. CIT(A) has ignored such submissions of the assessee. According to well established law Board is empowered to issue beneficial circulars in favour of assessee which tone down the rigor of law and such power is vested in the Board under the provisions of section 119 of the Act and such circular is also binding on the authorities employed in the administration of the Act. The benefit of such Circular is permissible even though the circular might have departed from the strict tenor of the statutory provision and mitigated the rigor of the law. Reference in this regard can be made to the following observations of Hon’ble Supreme Court from the decision in the case of Keshavji Raoji & Company vs. CIT (supra) “However,—this is what Sri Ramachandran really has in mind —circulars beneficial to the assessees and which tone down the rigour of the law issued in exercise of the statutory power under s. 119 of the Act or under corresponding provisions of the predecessor Act are binding on the authorities in the administration of the Act. The Tribunal, much less the High Court, is an authority under the Act. The circulars do not bind them. But the benefits of such circulars to assessees have been held to be permissible even though the circulars might have departed from the strict tenor of the statutory provision and mitigated the rigour of the law.” 25.11 In the present case Circular dated 16/12/2005 has done away with the requirement of agreement though the circular has deviated from the strict tenor of statutory provisions. Such course of action is within the power of CBDT and benefit arising there from is permissible to the assessee and cannot be denied according to aforementioned decision of Hon’ble Supreme

32 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 Court. Here, it may be mentioned that Circular dated 16/12/2005 was also considered by their Lordships of Hon’ble Jurisdictional High court in the case of CIT vs. ABG Heavy Industries Ltd., 322 ITR 323, a case law relied upon by Ld. CIT(A). It was observed that such circular was a prospective liberalization of the legislative scheme, in the interest of aiding the growth of infrastructure. The administrative circulars issued by CBDT in implementation of section 80 IA similarly liberalise the scheme consistent with the Act. Reference can be made to the following observations of their Lordship. “14. On 16th Dec., 2005, Circular No. 10 of 2005 [(2005) 199 CTR (St) 97] was issued by the CBDT. The circular made a reference to the earlier circular dt. 23rd June, 2000 and clarified that the definition of the expression ‘port’ for the purposes of s. 80-IA of the Act so as to include structures at ports for storage, loading and unloading etc., subject to the fulfillment of the conditions already noted earlier, would apply to the asst. yr. 2001-02 and any earlier assessment year. However, from asst. yr. 2002-03 onwards, the condition requiring that the structure should have been completed under a BOT or BOLT Scheme and that there should be an agreement for transfer of the facility to the competent authority on the expiry of the stipulated period was deleted. In other words, the conditions which were prescribed by CBDT’s Circular dt. 23rd June, 2000 were liberalized by the subsequent circular dt. 16th Dec., 2005. By the subsequent circular it was clarified that the conditions that were spelt out in the earlier circular dt. 23rd June, 2000 would continue to operate in respect of assessment years prior to and culminating with asst. yr. 2001-02. With effect from asst. yr. 2002-03 all that was necessary was a certificate issued by the port authority that the structure in question forms a part of the port. Hence, the evolution of s. 80-IA would show a progressive liberalisation of the legislative scheme, in the interests of aiding the growth of infrastructure. The administrative circulars issued by CBDT in implementation of s. 80-IA

33 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 similarly liberalised the scheme, consistent with the Act.” (emphasis ours) 25.12 It may be mentioned here that Ld. CIT(A) has referred to the aforementioned decision of Hon’ble High court in the case of CIT vs. ABG Heavy Industries Ltd.,(supra) to hold that execution of an agreement between the assessee and public authority is mandatory but the position is otherwise. The condition which was required to be fulfilled in the case of a CFS was only limited to obtaining the certificate from the Port Authority that the said structure form part of the Port which is clear from the aforementioned observations and the said certificate has been obtained by the assessee. 25.13 The above discussion is de-hors to the arguments taken by Ld. AR that in the case of M/s. Continental Warehousing Corporation (supra) there is a specific reference of the fact that there was no agreement entered into by that assessee with the designated authority and also the arguments that in all the cases discussed by Special Bench there was no such agreement as the entire structures were owned by the assessee and they were permitted to be operated as per approvals given to them by the concerned authorities and the facts of those cases and the case of the assessee are similar for which an affidavit has also been submitted by him which has not been controverted by the revenue. 25.14. Moreover, Co-ordinate Bench in the case of Ayush Ajay Construction Ltd. vs. ITO, 79 ITD 213 (Indore) while interpreting the provisions of section 80IA(4), even in the absence of agreement, on recognition of the work done has come

34 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 to a conclusion that assessee was entitled to get deduction and reference can be made to the following observations: “18. If we examine the relevant provisions of s. 80-IA(4A) of the Act and the object of its insertion to the tax statute in the light of the budget speech of the Hon’ble Finance Minister and the above said judicial pronouncements, we would find that the legislature has given a fillip of deductions to those enterprises who engage themselves in developing, maintaining and operating any infrastructure facilities for economic growth of the nation as it was felt by the legislature that inadequate infrastructure was a key constraint of our economic progress. As held by the apex Court in the case of Bajaj Tempo Ltd. vs. CIT (supra), the provisions of promoting economic growth should be interpreted liberally and the restriction on it too has to be construed so as to advance the objective of the provisions and not to frustrate it. If we put the facts of the case with the parameter laid down by the apex Court and the various High Courts, we would find that the assessee though not entered into an agreement with the State Government at the initial stage but has obtained the tender/contract by virtue of a valid assignment, which was duly recognised by the State Government, should be deemed to have entered into an agreement with the State Government for construction of the impugned bridge on BOT basis. It is not the case of the Revenue that the entire expenditure incurred in the construction of the aforesaid bridge was not borne by the assessee but by M/s Ajay Constructions, the main tenderer. The Revenue has rejected the claim of the assessee for the simple reason that the assessee had never entered into any contract with the State Government and the assessee- company is nothing but a colourable device to evade tax. It is a settled position of law that the company is a juristic entity and it should be considered independent from the shareholders or the directors. Admittedly, M/s Ajay Construction, the original tenderer, have assigned the remaining work of the contract/tender along with the expenditure incurred by it to Smt Usha Agrawal, the promoter of the assessee-company though an agreement dt. 1St April, 1995 and thereafter the construction work was undertaken by the promoter of the assessee-company till its incorporation. When the permission of the assignment was

35 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 granted by the State Government, fresh agreement was executed between the assesseecompany and the main tenderer, M/s Ajay Constructions, in which the assessee- company has ratified all the deeds and acts of its promoter, Smt. Usha Agrawal, and owned/taken over all the assets and liabilities of its promoter. The action of assigning and the work of construction undertaken by the assessee was recognised by the State Government and a tripartite agreement was executed between the assessee, M/s Ajay Constructions and the State Government through which the State Government have recognised that the assessee has stepped into the shoes of MIs Ajay Constructions and notified authorising the assessee to collect the toll tax for a particular period. A copy of the letter dt. 22nd May, 2000, to this effect is also placed before us. The assessee has also placed various correspondence entered into between the assessee and the State Government and the letter dt. 26th Aug., 1995, through which the assessee was informed about the notification in his favour to collect the toll tax. A copy of the letter placed at p. 140 of the compilation of the assessee. Copies of the notification and various receipts of toll tax are also placed on record for our perusal. It is also revealed from various correspondence of the assessee with the State Government that the assignment of contract was duly recognised by the State Government and it was admitted by them that the actual construction work was undertaken by the assessee only.” (Emphasis ours) In the above case also the deduction was not granted to the assessee as assessee had not entered into an agreement with the State Government 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. 25.15 The above circular issued by CBDT dated 16/12/2005 has also waived the condition regarding entering into an agreement with the authority and such course of action taken by CBDT was in accordance with the law and Income Tax Authorities administering the Act cannot deny such benefit to the assessee.

36 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 Therefore, we hold that Ld. CIT(A) has wrongly held that assessee is not entitled for deduction under section 80IA(4) of the Act in absence of the agreement entered into by it with the designated authority. 25.16 We also found force in the argument of Ld. A.R that deduction for the years under consideration cannot be denied to the assessee on the ground that there is no provision for withdrawal of this deduction for the subsequent year for breach of certain conditions unless the deduction granted in initial A.Y.2004-05 is withdrawn. Such proposition is supported by the decision of Jurisdictional High Court in the case of CIT vs. Paul Brothers (supra). No contrary decision was cited by the other side. Therefore, also deduction u/s. 80IA(4) cannot be denied to the assessee for the years under consideration.”

2.3. We note that while deciding the issue, the Bench made an elaborate discussion on various cases, the provisions of section 80IA(4), CBDT Circular, reply of the assessee dated 27/12/2011 mentioning CBDT Circular dated 23/06/2000 and 16/12/2005. Circular dated 16/12/2005 has done away with the requirement of agreement and the said circular was discussed by their lordship of the Hon’ble jurisdictional High Court in the case of CIT vs ABG Heavy Industries Ltd. 322 ITR 323(Bom.). The Bench finally concluded that the claimed deduction cannot be denied to the assessee.

So far as, contention of the ld. DR that the decision in the case of AlL Cargo Global Logistic Ltd. vs DCIT (2012) 18

37 M/s United Linger Agencies of India Pvt. Ltd.. ITA No.970/Mum/2014 ITR (Trib) 106 (Mum.)(SB) has not been accepted by the department and appeal has been preferred before the Hon’ble High Court, we not that the decision of the Special Bench (aforementioned) has been affirmed by Hon’ble jurisdictional High Court in CIT vs Continental Warehousing Corporation and All Cargo Global Logistic Ltd. (2015) 374 ITR 645 (Bom.) by following Container Corporation of India Ltd. vs ACIT (2012) 346 ITR 140 (Del.), thus, from this angle also, we find no merit in the appeal of the Revenue. Finally, the appeal of the Revenue is dismissed. This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 07/10/2015.

Sd/- Sd/- (Ramit Kochar) (Joginder Singh) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated : 16/10/2015 f{x~{tÜ? P.S/.�न.स. आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT, Mumbai. 4. आयकर आयु�त / CIT(A)- , Mumbai 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील�य अ�धकरण, मुंबई / ITAT, Mumbai.