TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 757
X X X X Extracts X X X X
X X X X Extracts X X X X
....nst "on behalf" 2. The brief facts of the case are that the assessee company is engaged in the business of operating and maintaining container freight station (CFS), Mundra Chennai and JNPT Munro. The assessee has filed the return of income for the A.Y 2017-18 on 23.11.2017 disclosing a total income of Rs. 106,95,00,730/- and claimed deduction u/s 80IA(4)(i) of the Act, further the assessee has filed the revised return of income disclosing a total income of Rs. 107,26,81,550/-. Subsequently, the case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act along with questionnaire was issued through ITBA System. In compliance, the assessee has filed the copy of return of income, audited report, Audited Profit & Loss account, Balance sheet and enclosures etc. The Assessing Officer (AO) on perusal of the submissions filed by the assessee find that the assessee has claimed deduction u/s 80IA(4)(i) of the Act of Rs. 53,49,63,560/- which includes deduction u/s 80IA(4)(i) of Rs. 11,86,17,663/- in respect of Mundra CFS being 8th year of claim of deduction. and Rs. 37,58,62,545/- in respect of Chennai CFS division being 9th year claim of deduction and the deduction u/s 80IA(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....otal income of Rs. 111,31,64,900/- and passed the order u/s 143(3) of the Act dated 30.12.2019. 5. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas the CIT(A) has considered the grounds of appeal, submissions of the assessee, findings of the AO and the CIT(A) has accepted the additional evidence filed. Whereas the CIT(A) has called for the remand report from the AO referred at Para 5.4 of the order and the AO in compliance has filed the remand report referred at Para 5.5 of the order. The CIT(A) dealt on the facts of the case, submissions of the AO in the remand report, rejoinder and discussed exhaustively on the provisions of the Act and circulars and deleted the disallowance made u/s 80IA(4)(i) of the Act and partly allowed the assessee appeal. Aggrieved by the CIT(A) order, the revenue has filed the appeal with the Honble Tribunal. 6. At the time of hearing, the Ld. DR submitted that the CIT(A) has erred in granting the relief to the assessee irrespective of the fact that the assessee has not fulfilled criteria of claim u/s 80IA(4) of the Act and the two different ownerships of CFS in the same financial year ,which invalid the claim of deduct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pany was appointed as "Custodian of Container Freight Station" vide Notification No.13/2016 dated 22.12.2016. 7.4.3 The Ld. AO's main reasons for denying the claim of deduction on CFS purchased/acquired by the appellant under slump sale were that sec 80IA(4) of the Act is applicable to only new infrastructure facility and since the appellant had purchased/acquired the CFS under consideration from its wholly owned subsidiary M/s Transindia Logistic Park P Ltd, so the same cannot be held to be a new infrastructure facility in the hands of the appellant company. The Ld. AO has also held that even the proviso to sec 80IA(4) of the Act is not applicable to the facts of the present case as the appellant company has acquired the CFS from its wholly owned subsidiary M/s Transindia Logistic Park P Ltd and not operating and marinating the said CFS on their behalf, i.e. on behalf of transferor M/s Transindia Logistic Park P Ltd but it is being operated and maintained on the behalf of assessee company itself. The Ld. AO is of the view that as per Proviso to sec 80IA(4) of the Act, there should be relationship of principal and agent between the transferor enterprises and the transferee e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on is attached to the undertaking or enterprise and not to the assessee. That is evident from the proviso of sec 80IA(4)(i) which provides that where any infrastructure facility is transferred from one enterprises to another enterprise then the deduction will be allowable in the hands of transferee enterprise for the unexpired period during which the transferor enterprises would have been entitled to the deduction, if the transfer had not taken place. The same has also been clarified by the CBDT circular No. 10/2014 dated 06.05.2014, which has clarified the issue of eligibility of deduction u/s 80-IA for unexpired period. Para 3 of the said circular of CBDT clarifies that the proviso to clause (i) and clause (iii) of sub-section (4) of section 80-IA deal with the situation where operation & maintenance of infrastructure facility or operation & maintenance of industrial park / SEZ respectively is transferred to another enterprise in the manner provided therein and the transferee undertaking can avail deduction for the unexpired period. The Para 5 of said circulars provides as under. "5. The vital factor in determining the eligibility criteria for availing deduction u/s 80-IA in a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e was any splitting up or reconstruction of a business already in existence. During the appellate proceedings, the appellant had placed reliance on the CBDT Circular No.1/2013 dated 17.01.2013, wherein the Board has issued certain clarifications in respect of sec 10A rws 10AA & 10B of the Act on the ground that the provisions of sec 80IA of the Act are similar to provisions of sec 10A/10AA/10B of the Act. As discussed above, vide above referred letter of this office dated 07.07.2021, the Ld. AO's attention was drawn to the fact that the appellant has placed reliance on said CBDT Circular No.1/2013 dated 17.01.2013 and the appellant has specifically placed reliance on Para 2(i)(a)(iv) of said Circular wherein in response to question "Whether tax Benefits under section 10A, 10AA and 10B would continue to remain available in case of a slump- sale of a Unit/Undertaking", the Board had clarified that "the vital factor in determining the above issue would be facts such as how a slump- sale is made and what is its nature. It will also be important to ensure that the slump sale would not result into any splitting or reconstruction of existing business. These are factual issue requiring....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Assessment Year relevant to such previous year and the subsequent years. The Tribunal noted that if a transfer between IOCL and the assessee were to be effected after 1 April 2001, that would result in the undertaking being disentitled to the benefit under Section 10A. This was a pointer to the fact that prior to the substitution a transfer of ownership or beneficial interest in the undertaking would not disentitle an assessee to the benefit of Section 10A. (As a matter of fact it may also be noted that the provisions of Section 10A(9) were omitted by the Finance Act 2003 with effect from 1 April 2004). 12. The judgment of the Division Bench of this Court in Gaekwar Foam & Rubber Co. Ltd.'s case (supra) explains that the concept of a reconstruction of a business implies that the original business is not to cease functioning and its identity is not lost. Reconstruction is of a business already in existence and there must be a continuation of the activities and business of the same industria undertaking. Where the ownership of a business or undertaking changes hands that would not be regarded as reconstruction. This judgment has specifically been approved by the Supreme Court ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aking to another assessee and the benefit attached with eligible undertaking cannot be denied to another assessee. There are only two negative terms prescribed under sub-section (2) of section 80IB, which we have referred above. Thus, we have no hesitation in accepting the submissions of Id AR for the assessee that he benefits of section 80IB are travelled (Transferred) with the undertaking and the fact of change of ownership does not affect the deduction. Sub-section (1) & (2) of section 80IB categorically refers to the business carried out by industrial undertaking. Thus, mere change of ownership would not affect the claim of deductions. With the above factual and legal discussion, we confirmed the order of Id. CIT(A) and dismissed the appeal of Revenue. 15. In the result, appeal filed by Revenue is dismissed." In the present case, it is an admitted fact that in the impugned assessment order, the Ld. AO in Para 8.3 of said order has given a factual finding that the assessee company has made a Business Transfer Agreement with M/s Transindia Logistics Park P Ltd and M/s Transindia Logistics Park P Ltd had claimed deduction u/s 80IA(4)(i) for the period of 9 months, whereas the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ransferee enterprise and not with reference to the transferor enterprise and the same is evident as said words "on its behalf" have been used after the words "...such infrastructure facility (hereafter referred to in this section as the transferor enterprise) to another enterprise (hereafter in this section referred to as the transferee enterprise) for the purpose of operating and maintaining the infrastructure facility". 7.4.11 In view of the above discussions, am of the considered opinion that the Ld. AO was not justified in disallowing the above referred claim of deduction u/s 80IA(4) of the Act. Hence, the impugned disallowance made u/s 80IA(4) of the Act at Rs. 4,04,83,352/- is DELETED. The Ground Nos. 1 to 7 raised in appeal are ALLOWED. 8. The Ld.AR emphasized that the assessee has submitted the exhaustive information on the claim of deduction satisfying the eligibility criteria and filed the income tax return, Tax Audit report U/sec 44AB of the Act in Form.No.3CD and in compliance to notices/letter , the assessee has furnished the detail note on deduction U/sec 80IA(4) of the Act in respect of transferor company CFS at Uran placed at page113 to 129 of the paper book-1,....