TaxTMI 
TaxTMI 
2016 (5) TMI 1487
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....al produce, seeds, fertilizers etc. During the period relevant to the assessment years under appeal the assessee derived income from warehousing charges, fumigation charges, handling charges, weightment charges, supervision charges, EDI service charges, weighbridge charges and from disinfection extension service scheme, etc. For providing warehousing services the assessee claimed deduction u/s. 80IB(11A) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). During the course of scrutiny assessment proceedings for assessment year 2008-09, the Assessing Officer inter alia disallowed the claim of deduction made by the assessee u/s. 80IB(11A) of the Act. Similarly, in the assessment year 2009-10 the Assessing Officer apart from disallowing deduction u/s. 80IB(11A), disallowed deduction u/s. 80IA(4) of the Act claimed by the assessee. Aggrieved by the assessment orders for the respective assessment years, the assessee filed appeals before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) vide impugned orders for the respective assessment years, upheld the findings of Assessing Officer in rejecting the claim of the assessee u/s. 80IB(11A)....
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....l, the assessee had claimed deduction u/s. 80IB(11A) of the Act. The assessee had claimed deduction on income from warehouses constructed and utilized after 1st April, 2001. The assessee had filed Audit Report in the prescribed form during the course of assessment proceedings. Admittedly, the assessee is providing warehousing facilities for storage of fertilizers, cotton bales and other miscellaneous items in addition to storage of food grains. The ld. AR referred to page 48 of the paper book to show commodity wise breakup of average utilization of warehouse during the financial years 2007-08 and 2008-09. A commodities wise breakup of average utilization of warehouse for the period relevant to assessment years under appeal is : Commodities 2007-08 2008-09 i. Food Grains 56.22% 51.41% ii. Fertilizers 10.77% 08.21% iii. Cotton Bales 13.05% 22.23% iv. Bonded Custom 4.37% 5.21% v. Others 15.59% 12.30% The ld. AR submitted that the assessee has established warehouses throughout the State of Maharashtra and the break up given at page 48 of the paper book is in respect of the entire warehouses. The deduction claimed by the assessee ....
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.... by the decision of Co-ordinate Bench of the Tribunal in the case of ACIT Vs. JWC Logistics Park Pvt. Ltd. in ITA Nos. 1121 and 1122/PN/2013 for the assessment years 2008-09 and 2009-10 decided on 21-08-2014. The ld. AR further to buttress his submissions placed reliance on the following judgments : i. Commissioner of Income Tax Vs. continental Warehousing Corporation, 374 ITR 645 (Bom); ii. Commissioner of Income Tax Vs. A.L. Logistics (P.) Ltd., 55 taxmann.com 283 (Mad). 6. On the other hand Shri Achal Sharma representing the Department vehemently supported the findings of the Commissioner of Income Tax (Appeals) in rejecting the claim of the assessee u/s. 80IB(11A) of the Act. The ld. DR submitted that the deduction u/s. 80IB(11A) is granted where the assessee is engaged in the integrated business of handling, transportation and storage of food grains. The relief has been granted under sub-section (11A) to promote and encourage creation of storage facilities for food grains. The assessee apart from providing storage facilities for food grains is also engaged in providing storage of fertilizers, cotton bales and other products. The assessee is not maintaining....
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.... "24. Subject to the provisions of this Act, a State Warehousing Corporation may - (a) acquire and build godowns and warehouses at such places within the state as it may with the previous approval of the Central Warehousing Corporation, determine; (b) run warehouses in the State for the storage of agricultural produce, seeds, manures, fertilizers, agricultural, implements and notified commodities; (c) arrange facilities for the transport of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities to and from warehouses; (d) act as an agent of the-Central Warehousing Corporation or of the Government for the purposes of the purchase, sale, storage and distribution, of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities; and (e) carry out such other functions as may be prescribed." 8. The assessee has set up 160 warehouses in the entire state of Maharashtra for providing warehousing facilities for storage of food grains and other commodities. A perusal of section 24 of the Warehousing Corporations Act would show that the assessee corporation ....
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....e entire income from warehousing business which includes receipts for warehousing products other than food grains, the spirit of subsection (11A) would be vitiated. The assessee is eligible to claim deduction u/s. 80IB(11A) on the income arising from integrated business of storage, transport and handling of foodgrains alone. Here it would be relevant to clarify further that the assessee would be eligible to claim deduction u/s. 80IB(11A) on the units (warehouses) that have started operating on or after 01-04-2001. 10. As has been pointed out earlier the assessee has several warehouses in the state of Maharashtra. The ld. AR of the assessee has submitted that statistics of the individual warehouses are not available. The consolidated Audit report giving the details of commodities wise breakup of average utilization of warehouses in the state of Maharashtra is available. The assessee has expressed its inability to prepare Audit report of the individual warehouses keeping in view of large number of warehouses and various products stored thought out the State. However, the ld. AR referred to the commodities wise breakup of the utilization of all warehouses according to which the foo....
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....t new godowns, which the corporation takes on lease. It is the claim of the assessee before the CIT(A) that the plinth area of construction of the godowns varies from minimum area of 10,000 sft. up to a maximum area of 50,000 sft. and the scheme of construction of godowns started in the year 2002. Each unit is an undertaking because food-grains are stored and handled and transported thereto and therefrom. It may be noted at this juncture that there is no restriction in S.80-IB that an existing business unit cannot set up new undertakings to carry on the integrated business of handling, storage and transportation of food grains. The godowns where this business is to be carried on need not be owned by the assessee. When the assessee-corporation has set up these godowns in as many as in 73 towns and at different places in those towns, it is very much entitled for relief under S.80IB(11A) of the Act in respect of each such new undertaking set up by it. It appears from the impugned orders that the lower authorities have proceeded as if the assessee's claim for relief under S.80IB(11A) is in respect of existing godowns, and not merely in respect of the new ones started after 2001. It is ....
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....torage of foodgrains. In the course of their integrated business, the assessee had collected rentals for storing foodgrains and had engaged outsiders to transport the food grains. Further, the fact that the assessee had been carrying on similar business would not disentitle the assessee from claiming relief u/s 80IB(11A), in respect of the new warehouses put to use after the introduction of sec 80IB(11A) i.e on or after 1.4.2001. The assessee has furnished in the paper-book list of new Godowns, which have been put to use by the assessee after 1.4.2001. It is well settled that deduction under Chap VIA, in respect of new undertakings set up by the assessee by way of expansion of the existing undertakings, as held by the Apex Court in the cases of Textile Machinery Corporation Ltd v CIT 107 ITR 195 SC and CIT v Indian Aluminium Company Ltd (108 ITR 367). The number of new godowns operated by the Assessee after 1.4.2001 clearly shows that there was substantial expansion of the assessee's business of handling, storing and transportation of food grains, which obviously could have been done only be undertaking new warehousing facilities year after year even after 2001. In respect of these....
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....ound no. 2. Accordingly, same is dismissed as not pressed. 13. The ground no. 2 in the appeal of the assessee for assessment year 2009-10 relates to disallowance of deduction Rs. 4,50,17,204/- u/s. 80IA(4) of the Act. The assessee has set up Inland Container Depot (ICD) and Container Freight Station (CFS) for handling bonded warehousing facilities on leasehold land of SIDCO. The ICD established by the assessee is located at about 3-4 Kms. away from the boundary wall of Jawaharlal Nehru Port Trust and the unit commenced its activities in December, 2004. The unit is said to be modified under Customs Act as "Customs Area" for the purpose of storage, stuffing, destuffing and clearance of export and import. The assessee claimed deduction u/s. 80IA(4) in view of Board's Notification No. F.No.205/17/2000/ITA-2 dated 23-06-2000. The Assessing Officer denied the claim of the assessee u/s. 80IA(4) on the ground that CBDT Circular dated 23-06-2000 (supra) has been withdrawn w.e.f. 16-12-2005 and the Board Port Trust has stated that the area from where assessee is operating does not form part of the 'port'. In first appeal the Commissioner of Income Tax (Appeals) upheld the findings of Asse....
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....ing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. From the statement of facts filed by the Revenue, we find the only grievance of the Revenue against the order of the CIT(A) is that the order relied on by the CIT(A) in the case of Continental Warehousing Corporation (Nhave Sheva) Ltd. (Supra) has been challenged by the Revenue before the Hon'ble High court and the same is pending. The Ld. Departmental Representative fairly conceded that the issue has been decided in favour of the assessee by the decision of the Mumbai Bench of the Tribunal and to keep the matter alive the Revenue has filed this appeal since the decision of the Tribunal in the case of Continental Warehousing Corporation (Nhave Sheva) Ltd. (Supra) has been challenged by the Revenue before the Hon'ble High Court. 4.1 The Ld. Counsel for the assessee filed the decision of the Hon'ble Delhi High Court in the case of Container Corporation of India Ltd. Vs. ACIT reported in 346 ITR 140 and submitted that the Hon'ble High Court in the above decision has held that the income of ICDs is eligible for deduction u/s.80IA(4)(i) o....
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....here in clause (d). What was there prior to its substitution by Finance Act of 2007 with effect from 1st April, 2008, were the words "or inland port". Now the word "or" is deleted, but the words are "inland port or navigational channel in the sea". Thus, an "inland port" was always within the contemplation of the Legislature and it is treated specifically as a infrastructural facility. Therefore, to that extent Mr. Dastur is right in his submission." The Hon'ble Court further after considering the decision of Hon'ble Delhi High Court in the case of Container Corporation of India Ltd. Vs. Asstt. Commissioner of Income Tax reported as 346 ITR 140 (Delhi) concluded as under : "46. We have found that there is a specific reference made by the Delhi High Court to the communication dated 24th April, 2007, from the Government of India, Ministry of Finance, Department of Revenue. These are then classified as inland ports and categorised accordingly. There is a further communication from the Ministry of Commerce and Industry as well. We do not find that a view different than the one taken by the Delhi High Court is possible. Bearing in mind the facilities that are extende....
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.... the assessee in ITA No. 820/PN/2013 for assessment year 2009-10 is partly allowed. ITA Nos. 968 & 969/PN/2013 (Revenue's Appeals) 19. The Revenue in its appeal for assessment year 2008-09 has raised 11 grounds. The ground nos. 1, 10 and 11 are general in nature hence, require no adjudication. 20. The ground nos. 2 and 3 raised in the appeal of the Revenue are against the findings of Commissioner of Income Tax (Appeals) in deleting the addition of Rs. 20,08,350/- in respect of payment made by the assessee to the Maharashtra State Warehousing Corporation Karmachari Welfare Fund (hereinafter referred to as the "MSWCKWF"). The Assessing Officer disallowed the contribution towards MSWCKWF by following his own order in the earlier assessment year. In the first appeal the Commissioner of Income Tax (Appeals) accepted the claim of the assessee by following the decision of the Tribunal in assessee's own case in the assessment years 2003-04 to 2005-06. We find that similar issue was raised before the Tribunal in assessee's own case in assessment years 2003-04 to 2005-06 in ITA Nos. 382, 794 & 1372/PN/2007 for respective assessment years. The Co-ordinate Bench after following the de....
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....nt of Rs. 31,34,000/- is received by assessee as insurance claim. A perusal of the impugned findings by Commissioner of Income Tax (Appeals) shows that the assessee has furnished explanation in respect of alleged understatement of warehousing charges. The assessee has purportedly offered the amount of insurance claim for tax in the year of receipt. In support of his submissions the assessee has furnished computation statements for assessment years 2007-08, 2008-09 and 2009-10. The Commissioner of Income Tax (Appeals) has deleted the addition after considering the same. We do not see any infirmity in the action of Commissioner of Income Tax (Appeals) in deleting the addition. Once the assessee has offered the amount to tax in the year of receipt of claim, the same amount cannot be taxed twice. The ground nos. 4 and 5 raised in the grounds of appeal by Department are devoid of merit and hence, dismissed. 22. In ground no. 6 the Revenue has impugned the findings of Commissioner of Income Tax (Appeals) in directing the Assessing Officer to allow the fixed deposit closing balance differences of Rs. 6,83,000/- and Rs. 3,38,000/- for the assessment years 2009-10 and 2012-13, respective....
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....e Kopargaon Warehouse during the relevant assessment year as is demonstrated in the ledger account of Kopargaon Warehouse filed vide page no. 33 of the paper book. The appellant's submission that the loss suffered is on account of capital asset therefore, the insurance claim has been debited to capital account is perfectly reasonable. Further, it is seen that neither the receipt of insurance claimed nor the actual claim for insurance pertains to AY. 2008-09 hence the Assessing Officer was not justified in making the addition of Rs. 8.07 lakhs. So far as the second part is concerned, the addition is not warranted since no separate sanction was received from the insurance company with reference to fire fighting expenses. Therefore, the appellant was correct in not quoting Rs. 8.78 lakhs as reimbursement of such expenses and showing this amount as other liability. Before me, documents have been filed to show that subsequently the appellant had to incur expenditure with reference to claims made by some of the clients of the appellant and even had to pay interest on the amounts sanctioned by the Court. Accordingly, Ground No. 6 is allowed in favour of the appellant." The ld. DR h....