TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 477
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....h e-filing on 29.09.2011 declaring total income of Rs. 3,77,21,730/- after claiming the deduction of Rs. 3,68,28,209/- u/s 80IA of the Income Tax Act, (in short 'Act'). The assessment was completed u/s 143(3) in this case on total income of Rs. 7,59,49,939/-. In the assessment made u/s 143(3), the AO disallowed deduction claimed by the assessee u/s 80IA of the Act. During the assessment proceedings, the AO observed that the assessee has claimed deduction u/s 80IA of the Act for an amount of R.3,68,28,209/- for operating and maintenance of the infrastructure facility i.e. Container Freight Station (CFS). The AO called for the explanation of the assessee as to why the deduction claimed u/s 80IA should not be disallowed for not having satisfied the conditions laid down u/s 80IA, i.e., not having an agreement with the Central Government or State Government or local authorities. Similarly, the AO was also of the view that CFS is not a port for the purpose of claiming the deduction u/s 80IA(4) and relied on Board Circular No.10/2005 dated 16.12.2005 and Circular No.793 dated 23.06.2000. The assessee filed explanation stating that the assessee had established a CFS at Mulagada, Mindi, Vis....
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....d the appeal of the assessee following the decision of this Tribunal in the case of Gateway East India (P) Ltd, vs ACIT in ITA No.15/Vizag/2015 dated 29/04/2012 for the A.Y.2011-12. 4. Against the order of the Ld.CIT(A), the revenue has filed appeal before this Tribunal. During the appeal hearing, the Ld.DR relied on the order of the AO and heavily placed reliance on CBDT Circular No.178/42/2010 dated 06.01.2011 and argued that the CFS is not a port for claiming deduction u/s 80IA(4) and also argued that the assessee has not satisfied the condition with regard to entering agreement with the Government or local authority for development of infrastructure. 5. On the other hand, the Ld.AR relied on the orders of the Ld.CIT(A). 6. We have heard both the parties and perused the material placed on record. In this case, the AO disallowed claim for deduction u/s 80IA for the following reasons. (i) The assessee has no agreement with the Govt. of India/State Government or any local authority or any other statutory body for (i) developing (ii) operating and maintenance (iii) developing, operating and maintaining the infrastructure facility. (ii) The assessee has established CFS on its ....
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.... such as custom clearance are also carried out at these ICDs, the claim of the respondent herein can be considered within the term 'Inland port' as is used in the Explanation. It is significant to note that the word 'Inland Container Depots' was first introduced in the definition of 'Customs Port' as is given in Section 2(12) of the Customs Act, 1962, through amendment made by the Finance Act, 1983 with effect from 13.05.1983. 22. The term 'Inland Port' has been defined nowhere. But the Notification that has been issued by the Central Board of Excise & Customs (CBEC) dated 24.04.2007 in terms holds that considering the nature of work carried out at these ICDs they can be termed as Inland Ports. Further, the communication dated 25.05.2009 issued on behalf of the Ministry of Commerce and Industry confirming that the ICDs are Inland Ports, fortifies the claim of the respondent herein. Though both the Notification and communication are not binding on CBDT to decide whether ICDs can be termed as Inland Ports within the meaning of Section 80-IA of the IT Act, the appellant herein is unable to put forward any reasonable explanation as to why these notific....
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....owed the deduction claimed u/s. 80IA exactly on similar grounds. The Hon'ble Bench has discussed all the issues at length and held that the deduction u/s 80(IA) was rightly claimed. The relevant portion of the order is extracted hereunder: "7. Rival contentions heard. On careful consideration of the facts and circumstances of the case and also on perusal of the papers on record, orders of the authorities below and the case law cited, we hold as follows: 8. In circular no. 18/2009 dated 08/06/2009 issued by the Central Board of Excise and Customs in F.No. 434/17/2009-CUS.IV the difference between Inland Container Depots (ICD) and Container Freight Stations(CFS) has been spelt out in the following manner: "(a) DEFINITION OF ICD: An Inland Container Depot may be defined as: A common user facility with public authority status (emphasis supplied) equipped with fixed installations and offering services for handling and temporary storage of import/export laden and empty containers carried under customs control and with Customs and other agencies competent to clear goods for home use, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright expo....
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....ent existence and has to be linked to a Customs station within the jurisdiction of the Commissioner of Customs. It is an extension of a Customs station set up with the main objective of decongesting the ports. In a CFS only a part of the Customs processes mainly the examination of goods is normally carried out by Customs besides stuffing/destuffing of containers and aggregation/segregation of cargo. Thus, Custom's functions relating to processing of manifest, import/export declarations and assessment of Bill of Entry/Shipping Bill are performed in the Custom House/Custom Office that exercises jurisdiction over the parent port/airport lICD/LCS to which the said CFS is attached. In the case of Customs Stations having facility of automated processing of documents, terminals are provided at such CFSs for recording the result of examination, etc. In some CFSs, extension Service Centers are available for filing documents, amendments etc. However, the assessment of the documents etc. is carried out centrally. * An ICD may also have a number of CFSs attached to it within the jurisdiction of the Commissioner of Customs just as in the case of a port and its CFSs (as on date there are 2....
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....ssessee has placed on record letter of intent. In fact the Ministry of Commerce and Industry, vide letter dated 10/02/2005, written to the Managing Director of the assessee company regarding setting up of a CFS at Visakhapatnam apropos the assessee's case. 10. In the case of A L Logistics P. Ltd. (supra) the Chennai Bench of the Tribunal at para 7 held as follows: "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 Id. Counsel for the assessee has placed on record letter dt.27-05-2003 from the Ministry of Commerce and Industry permitting the assessee to set up CFS at Haldia. The contents....
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....ns mentioned in the aforesaid letter that the assessee was allowed to carry on the services of CFS. The assessee on the compliance of the terms and conditions as mentioned in the letter, was notified as CFS Complex for the purpose of receiving, storing, import containers, receiving/consolidating export cargo etc. vide Public Notice OUO-1l-2013. The Public Notices were issued by the office of the Commissioner of Customs (Port) Kolkata. 8. Thus, it is evident that the proposal of the assessee was accepted by the Government on certain conditions which were duly complied with by the assessee. There may not be any specific agreement, but the sequences of events clearly show that the assessee is providing CFS facility in accordance with the conditions laid down by the Government. In such circumstances there is no need to insist for the specific execution of agreements. The coordinate bench of the Tribunal in the case of United Liner Agencies of India (P.) Ltd (supra), has taken a similar view, Where no specific 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 agre....
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....al freight stations see had a total of 45 inland container depots. It claimed special deduction under section 80-IA(4) for the assessment years 2003-04 to 2005-06. The Assessing Officer denied special deduction but the Tribunal allowed it. On appeal to the High Court: Held, allowing the appeals, that out of the total 45 inland container depots operated by the assessee, except two all others were notified by the Central Board of Direct Taxes for the purpose of sec. 80IA(12)(ca). Having regard to the provisions of the Customs Act, the communication issued by the Central Board of Excise and Customs as well as the Ministry of Commerce and Industry, the object of including "inland port" as an infrastructure facility and also that customs clearance also takes place in the inland container depot, the assessee's claim that the inland container depots were inland ports under Explanation (d) to sec. 80IA(4) required to be upheld." 13. The issue has also been clarified by the Government vide CBEC circular no. 18/2009 dated 08/06/2009. Respectfully following the above decisions, we allow this appeal of the assessee." All the material facts in the above case and that of the appellant are ....
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....by the revenue before the Hon'ble High Court is as under : "5. Before the Tribunal, the Department contended that there is no proper agreement with the Central or the State Government and even in the approved proposal, certain other requirements are yet to be complied with. On this premise, the Department contended that the benefit of Section 890IA(4)(i) would not endure to the benefit of the assessee." The Hon'ble High Court of Madras has answered the issue in favour of the assessee in para No.10 which reads as under : "10. As has been observed by the Tribunal, in the decision of the Delhi High Court in the case of Container Corporation of India Ltd., Vs. ACIT reported in 346 ITR 140 (Del), container freight station is held to be falling within the customs area attached to the port. As the work relating to customs is performed at these inland container depots/container freight stations, it would fall under the provision of Section 80IA(4)(i) Explanation (d) of the Income Tax Act, The plea of Mr.T.Ravikumar, learned standing counsel appearing for the Revenue that any other public facility on similar nature has been omitted with effect from 1.4.2002 will not make the case any d....