TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 656
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....On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the assessee was entitled to deduction u/s 80IA(4) in respect of Container Freight Station (CFS) being inland port without considering the CBDT's Circular no 10/2005 dtd. 16.12.2005 and Board's clarification dated 06.01.2011". 3. At the outset, the Ld. Counsel, Shri Madhur Agarwal, submitted that, this issue now stands covered by the decision of various High Courts including that of the jurisdictional High Court. In support, he filed the compilation of following decisions:- Sr.No. Particulars ITAT/High Court 1 CIT-II, Thane v Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 58 taxman.com 78(Bom) ITA No.523/2013 Bombay High Court 2 Container Corporation of India Ltd. vs ACIT [2012] 21 taxmann.com 317 (Delhi) ITA No. 1411/2009 Delhi High Court 3 All Cargo Global Logistics Ltd. vs DCIT [2012] 21 taxman. Com 429(Mum)(SB) ITAT Special Bench (Mum) 4 CIT Chennai vs M/s A L Logistics Pvt Ltd vide ITA No.1031 of 2014 dated 23.12.2014 Madras High Court 4. The brief facts of the case are that, the assessee company is engaged in the business of pro....
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....id not fulfill conditions which are mandatory to be followed. (vii) Structure built by Assessee is not infrastructure facility defined in clause (d) of explanation to section 80IA(4). The said structure does not form part of JNPT. (viii) Assessee failed to bring on record an agreement with Central Government or State Government or Local Body authority for: (a) Developing, (b) Operating & maintaining or (c) Developing, operating & maintaining a new infrastructure facility. (ix) The Container Freight Station (CFS) of Assessee is not Port as per the explanation to Section 80IA(4) of Income Tax Act, 1961 and CBDT circular No.10 of 2005 dated 16th December, 2005. (x) The Container Freight Station (CFS) of Assessee is not an Inland Port as intended in the explanation to Section 80IA(4). There is no CBDT instruction declaring Container Freight Station (CFS) of Assessee as 'Inland Port'. (xi) The Assessee Company entered into service agreement with CMA CGM Agencies India Private Limited wherein assessee is working as a contractor and agree to provide Container Freight Station (CFS) service as Cargo & Container to be used, located at Nhava Seva, Raigarh. As per agree....
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.... deduction under section 80IA(4). Our Hon'ble jurisdictional High Court following the aforesaid decision of Hon'ble Delhi High Court has reiterated the same view. The relevant observations of their Lordship in the case of All Cargo Global Logistics Ltd. (supra) analyzing the sub-section (4) of section 80IA reads as under:- "39. A perusal thereof would indicate as to how the Legislature had in mind deduction in respect of profits and gains from industrial undertakings or enterprises engaged in the infrastructure development etc. We are concerned with sub-section (4) and as it read at the relevant time. It says that this section applies to any enterprise carrying on the business of developing or operating and maintaining any infrastructure facility which fulfills all the conditions, namely, it is SRP 47/61 ITXA523.13.doc owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act, it has entered into an agreement with the Central Government or a local authority or any other statutory body for developing or operating and maintaining or developing....
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....e findings to which our attention has been invited by Mr. Suresh Kumar in Appeal No.523 of 2013 arising out of the Tribunal's order dated 31st August, 2012, pertaining to assessment year 2008-09 in the case of Continental Warehousing Corporation indicate that the said assessee had informed the Assessing Officer that JNPT had issued a certificate dated 13th July, 2006, to it in accordance with Point No.3 of CBDT circular No.10 dated 16th December, 2005, However, this letter / certificate was withdrawn by the JNPT on 5 th October, 2007. Secondly, the assessee company has not entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body. Therefore, the condition was SRP 50/61 ITXA523.13.doc not fulfilled. The Commissioner in the appellate order had before him the ground and while dealing with the same, he found that the approval granted by the Ministry of Commerce, Government of India would not constitute an agreement with the Central Government. Further, the Department of Revenue, Ministry of Finance, issued a Notification dated 1st January, 2006, notifying the assessee as custodian of imported and exported good....
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....y to the factual position but the specific substantial question of law and the activity of the assessee before it carried out mainly on its ICD's (Inland Container Deports), Central Freight Stations and Port Terminals. The assessee had 45 container depots spread over the country. It is in the business of transporting containerised cargo. It may be concerned with the public sector undertaking and functioning directly under the administrative control of the Ministry of Railways, but the activity of the assessee is carried out mainly on the Inland Container Depot, Central Freight Stations and Port Container Terminals spread all over the country. The assessee has a total 45 Inland Container Depots. The Division Bench of the Delhi High Court then concluded as under : "10. Thus it was for the first time from the assessment year 1999-2000 that inland ports started enjoying the deduction under Section 80IA as an "infrastructure facility". The object of the Government was to strengthen and improve the country's infrastructure in general and the transport infrastructure in particular. Inland ports facilitate the transport infrastructure by taking care of the transport of the custo....
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....t from 1.4.2002 by the Finance Act, 2001, as noticed earlier, the Board was empowered to notify any public facility of a similar nature, other than what was mentioned as infrastructure facility. But an amendment was made and the power to notify was dropped. There was no provision made in the Act saying that the notification issued earlier would cease to have effect from 1.4.2002. Since the notification continued to have effect even beyond 1.4.2002, there is merit in the contention of the learned counsel for the assessee. Circular No. 7/2002, dated 26th August, 2002, reported in (2002) 257 ITR 28 clarified as under: "Such projects, for which agreements have been entered into on or after April 1, 1995, but on or before March 31, 2001, and which have been notified by the Board on or before March 31, 2001, would continue to be exempt, subject to the fulfilment of the conditions prescribed in section 80-IA(4)(i)(b), as it existed prior to its substitution by the Finance Act, 2001." This circular fortifies the assessee's claim. 14. The next question that arises is whether the SRP 55/61 ITXA523.13.doc ICDs can be considered to be inland ports. There is no definition of an inl....
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....or vessels have direct access to them. The goods which are either removed from or brought into the ICDs are brought or taken away either by railway wagons or by container trucks, as the case may be. But it is common ground that customs clearances take place in the ICDs. 16. It is, therefore, for consideration as to whether the ICDs can be said to be "inland ports" for the purposes of the Explanation (d) below sub-section (4) of Section 80IA. We were not able to find a definition of the words "inland port" in any of the dictionaries. But the words "inland container depot" were introduced in Section 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 13th May, 1983. Simultaneously clause (aa) was inserted in Section 7(1) of the said Act under which the CBEC was empowered to issue notification appointing the places which alone shall be considered as inland container depots for the unloading of imported goods and the loading of exported goods. On 24th April, 2007 the following clarification was issued by the Central Board of Excise and Customs apparently in response to a query raised by the asse....
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....on Bench decision to the view taken by the Delhi High Court. The Division Bench in paragraphs 10 and 12 of its judgment extensively referred to the Tribunal's conclusions. It also SRP 59/61 ITXA523.13.doc referred to the Special Bench decision of the Tribunal. Thus, when the proposal to set up a CFS has been accepted by the Government, there is no requirement of either a specific agreement as contended by Mr. Suresh Kumar. Nor can it be said that by virtue of any certification of the JNPT and its subsequent withdrawal the position undergoes any change. Once the facility is nothing but a infrastructural facility set up and within the precincts of the port, then, considering and even otherwise having considered its proximity to the sea port and its activities that we have no doubt and it can be safely concluded that the deduction admissible under sub-section (4) of section 80-IA can be claimed by both the ICDs and CFSs. 48. We do not think that the view taken by the Tribunal is in any way perverse or runs contrary to the language of subsection (4) of section 80-IA or the object of the Income Tax Act, 1961, as a whole. Once such a conclusion is reached, then, it is not neces....