TaxTMI 
TaxTMI 
2024 (8) TMI 1653
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....ience the same are disposed of by this common order. 2. Brief facts of the case is that the assessee is a Private Limited company engaged in the business of Operating container handling terminal and container freight station operations. For the assessment year 2015-16 the assessee filed its Return of Income on 27-11-2015 declaring total income of Rs.14,09,75,340/=. The return was taken for scrutiny assessment and made the following disallowances: 2.1. Disallowance u/s. 14A of the Act: The assessee has earned dividend income of Rs.25,32,679/- which is exempt from tax but the assessee has not allocated any expenditure to earn the exempt income. Therefore, AO invoking the provisions of section 14A of the Act made disallowance of Rs.35,00,000/- as per Rule 8D. The assessee contended that it has not incurred any expenditure to earn the exempt income and therefore disallowance u/s. 14A is uncalled for. The assessee has further claimed that the peak investment in the mutual fund was approximately Rs.137 crores and it has got sufficient interest free fund in the form of cash profit of Rs.284.85 crores. The assessee also submitted that the total investment is Rs.70 crores as on 31-03-....
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.... 3. Disallowance u/s. 80IA(4): The assessee claimed deduction of Rs.295,58,08,285/-u/s. 80IA(4) of the I.T. Act for operating and maintaining the infrastructure facility. The AO has disallowed the claim u/s. 80IA(4) on the ground that assessee has not satisfied the condition laid down in section 80IA(4)(i)(b) of the Act. The AO has held that there is no agreement between the assessee company and Central Government or a State Government of Local Authority or any other Statutory Body (which in this case is Gujarat Maritime Board] for developing or operating and maintaining new infrastructure facility namely Port, and therefore assessee is not eligible for deduction u/s 80IA(4). 3.1. The assessee submitted that it is engaged in the business of Operation and Maintenance of Infrastructure facility (i.e, a Port) and has filed Form No.10CCB to claim the deduction u/s. 80IA(4) of the Act. As regard to AO's objection that assessee has not entered into agreement with the Central Government, State Government or Local Authority or any other Statutory Body (Gujarat Maritime Board) for disallowing the claim u/s. 80IA(4), assessee has submitted that there was a Concession Agreement dated 1....
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....further relied upon the decision of Hon'ble Madras High Court in the case of CIT Vs Chettinad Lignite Transport Services Pvt. Ltd. in TCA No.741, 1246 of 2009 and 162 of 2015 dated 06/03/2019 in which Hon'ble High Court relying on the proviso to Section 80IA(4) has held that the proviso does not require that there should be a direct agreement between the transferee enterprises and the specified authorities for availing the benefit u/s. 80IA of the Act. 3.2. On appeal against this issue the Ld CIT[A] considered the Agreements entered between the parties and various case laws relied upon by the assessee and deleted the addition made by the AO u/s. 80IA[4] by observing as follows: "... It is seen that Adani Port and Special Economic Zone Limited was incorporated as Gujarat Adani Port Limited (GAPL) in the year 1999 to develop a private port at Mundra on the west coast of India. The company entered into Concession Agreement with Gujarat Maritime Board for the development of port at Mundra and commenced commercial operation in October, 2001. As per Clause 8.5(b) of the Concession Agreement, Adani Port and Special Economic Zone Limited has entered into Sub-Concession Agreemen....
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....n." The Assessing Officer has disallowed the claim of 80IA(4) only on the ground that condition provided in section 80IA(4)(i)(b) that appellant should have entered into agreement with the Central Government, State Government or Local Authority or any other Statutory Body has not been satisfied. Appellant has contended that sub concession agreement was in continuation and part of concession agreement between GMB and APSEZ, and therefore, in view of decision of Madras High Court in the case of CIT Vs. A.L. Logistic Pvt. Ltd. [374 ITR 601], appellant is eligible for deduction u/s. 80IA(4). However, it is seen from the sub concession agreement that port was developed by Adani Port Special Economic Zone and it was handed over to the appellant company to operate and maintain the container terminal as per Clause (G) & (H) of Sub-Concession Agreement. The Assessing Officer has denied the claim of 80IA(4) without considering the proviso of Section 80IA(4) which is tis under:- "Provided that where an infrastructure facility is transferred on or after the 1st day of April, 1999 by an enterprise which developed such infrastructure facility (hereinafter referred to in this se....
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....any statutory body for developing or operating and maintaining or developing operating and maintaining a new infrastructure facility. For rejecting the assessee's claim another reason adopted by the Department is that operation and maintenance of the Lignite Transport System is not an infrastructure facility eligible for relief u/s 80IA and further that the assessee had only an agreement with ST-CMS and therefore it is not entitled to sec. 80IA relief. However, while going through the orders of the authorities below particularly with regard to the contract with Railways, the Department concluded that there was only approval from the Railway authorities to put up the rail track, sidings etc. notwithstanding the fact that the Railways has recognised the assessee as a contractor. Impliedly the Department has accepted the fact that the assessee has provided "Infrastructure facility" to the specified authority. The only doubt in the mind of the Department was that there was no existence of direct contract between the assessee and the Railways. The Department proceeded further to conclude that there was no contract as envisaged under sec.80IA. As rightly pointed out by the lid. Couns....
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....ll under the definition of infrastructure facility, a was entitled to the said benefit under Section 80IA of the Act. The grounds on which the Assessing Authority denied the said benefit to the Assessee ignoring the effect of Proviso to Section 80IA(4), therefore, could not be sustained. The learned Tribunal, in our opinion, has rightly held that the Proviso does not require that there should be a direct agreement between the transferee enterprise and the specified authority for availing the benefit under Section 80IA of the Act. There is no dispute before us that the Assessee was duly recognised as transferee or assignee of the principal contractor Mis ST-CMS Company Private Limited and was duly so recognised by the Railways to operate and maintain the said railway sidings at Vadalur and Uthangalmangalam Railway Stations The findings of fact with regard to the said position recorded by the learned Tribunal are therefore, unassailable and that clearly attracted the first Proviso to Section 80IA (4) of the Act." In view of the above, the appellant is eligible for deduction as per proviso to section 80IA(4). AO is, therefore, directed to allow the claim according to proviso ....
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.... The Additional Grounds of Appeal raised by the Assessee reads as under: On the facts and in the circumstances of the case and in law, the Appellant prays that: 1. The Dividend Distribution Tax ('DDT') paid under section 115-O of the Income-tax Act, 1961 ("Act) on dividends declared and paid by the Appellant to its parent foreign shareholder who is a tax resident of Mauritius, is in excess of the rate provided under Article 10 of the India-Mauritius DTAA. 2. The Assessing Officer be directed to grant refund in respect of the tax paid under section 115-0 of the Act in excess of the rate prescribed under the India-Mauritius DTAA. 3. The Assessing Officer be directed to grant refund of the excess DDT paid by the Appellant, since as per the provisions of Section 237 of the Act read with Article 265 of the Constitution of India, only legitimate tax could have been retained. 6. The Grounds of Appeal raised by the Revenue ITA No.1711/ Ahd/2019 relating to the Asst Year 2015-16 reads as under: 1. The Ld. CIT(A) has erred in law and on facts in holding that the depreciation on the "Infrastructural facility was to be allowed in Assessme....
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.... and maintenance and that this provision itself envisages that in a given project the developer and person who maintains and operates may be different. (ii) that in the appellant's case the transferor M/s. Gujarat Adani Port Ltd. had not developed the infrastructure facility and the development was to be done by the transferee. (iii) that the appellant is involved not only in operating and maintaining the infrastructure facility but has also developed the same as is evident from the letter dated 30-09-2002 of Gujarat Maritime Board to GAPL and from the replies of the appellant filed during the course of assessment proceedings. (vi) that the appellant itself admitted that it was the developer of the infrastructure facility by submitting that the assessee company has commenced its business during FY 2003-04 and it is eligible to claim deduction for the entire period of 10 years out of 15 years commencing from FY 2003-04 being the initial assessment year and this submission is also reproduced on page 42 of the order of CIT(A). 3. The Ld. CIT(A) has erred in holding that the appellant is eligible for deduction as per proviso to sec.80IA(4) as a t....
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....4A is restricted to exempt income of Rs.25,32,679/= only. Thus the Ground No.1 raised by the Assessee and Ground No.2 raised by the Revenue are hereby dismissed. 11. Second issue is Disallowance u/s. 80IA(4): The assessee claimed deduction of Rs.295,58,08,285/-u/s. 80IA(4) of the I.T. Act for operating and maintaining the infrastructure facility. The AO has disallowed the claim u/s. 80IA(4) on the ground that assessee has not satisfied the condition laid down in section 80IA(4)(i)(b) of the Act. Ld CIT[A] after considering various orders passed by the Tribunal and High Courts allowed the issue in favour of the assessee. 11.1. Ld Senior Counsel for the assessee submitted that this issue is also covered in favour of the assessee by the High Court of Madras in the case of CIT Vs. A.L. Logistic Pvt. Ltd. [374 ITR 601] and CIT -Vs- Chettinad Lignite Transport Services Pvt. Ltd. in TCA No.741,1266 of 2009 and 162 of 2015 dated 06-03-2019 upholding the decision of Hyderabad ITAT in the case of Ocean Sparkle Limited wherein it was held that assessee is eligible for deduction u/s.80IA(4) of the Act. Per contra Ld CIT DR appearing for the Revenue supported the order passed by the AO an....
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...., captioned as Lignite Transport System with M/s.ST-CMS Electric Company Private Limited, had undertaken the work of developing the said railway sidings and was operating and maintaining the same. The only ground on which, the Assessing Authority denied the said benefit was that the Assessee himself did not enter into any such contract with the Railways or with the Central Government. 9. The learned Tribunal, however, in our opinion, rightly applied the Proviso to Section 80IA(4) of the Act and held that since the Assessee was recognised as contractor for these railway sidings, which undoubtedly fell under the definition of "infrastructure facility", it was entitled to the said benefit under Section 80IA of the Act. The grounds on which the Assessing Authority denied the said benefit to the Assessee ignoring the effect of Provisos to Section 80IA(4), therefore, could not be sustained. The learned Tribunal, in our opinion, has rightly held that the Proviso does not require that there should be a direct agreement between the transferee enterprise and the specified authority for availing the benefit under Section 80IA of the Act. There is no dispute before us that the Assesse....
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....n of Rs.4,27,45,839/- on the "Infrastructure Usage Facility' on the ground that depreciation is being claimed by the Assessee/Lessee as well as the Lessor/M/s. APSEZ Ltd for the same assets. Ld Senior Counsel for the assessee submitted that this issue is covered in favour of the assessee in assessee's own case by the Co-ordinate Bench in ITA Nos. 1117, 2171 & 2172/ Ahd/2017 vide order dated 28.06.2019 wherein held as follows: 7. We have heard both the sides and perused the material on record. The assessee has claimed depreciation of Rs. 10,13,23,469/- on infrastructure usages facility on written down value of Rs. 405,23,93,877/- treating the same as intangible asset. The assessee company was using infrastructure facility developed by Mundra Port and Special Economic Zone on account of exclusive right has been given to the assessee company to carry out its terminal operation work. It is further noticed that right from the inception of the assessee company for i.e. assessment year 2004-05 till assessment year 2011-12 the same claim of depreciation has been allowed to the assessee company since assessment year 2004-05. The assessee has entered into aforesaid asset into th....
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....ly following the above judicial precedents the Ground No.1 raised by the Revenue is devoid of merits and liable to be dismissed. 15. Next issue is Additional Ground raised by the Assessee namely Dividend Distribution Tax [herein after referred as DDT] paid u/s.115O to parent foreign shareholder, who is a tax resident of Mauritius, is in excess of rate provided under Article 10 of IndiaMauritius DTAA and consequently assessee prays to direct the AO to grant refund of excess DDT paid u/s.115O of the Act. 15.1. Ld Senior Counsel Mr. S.N. Soporkar appearing for the assessee fairly submitted that this is covered against the assessee by the decision of the Special Bench of ITAT in the case of DCIT Vs- Total Oil India [P] Ltd. reported in [2023] 149 taxmann.com 332 [Mum Spl Bench] wherein it was held that DTAA does not get triggered at all when a domestic company pays DDT u/s.115O, where contracting states to a treaty intend to extend treaty protection to domestic company paying DDT, only then, domestic company can claim benefit of DTAA, if any. However to keep this alive the assessee has raised this Additional Ground before us. Since Special Bench decision is in favour of the Reven....