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TMI Blog2011 (8) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... co-ordinate Bench has already taken a decision in the case of Income-Tax Officer. Versus Ambika Sheet Grah (P) Limited. & others (2008 - TMI - 71907 - ITAT AGRA) that storage and attendant facilities in themselves complete the cold chain facility of storage. The judicial discipline demands that this decision should be followed. Therefore, we prefer to follow the decision in the interest of judicial discipline and hold that under the provision there can be a chain of facilities in respect of storage only. Accordingly, the appeals of the Revenue are dismissed. - IT APPEAL NOS. 381, 459, 460 & 466 (AGRA) OF 2009 AND 425 & 459 (AGRA) OF 2010 - - - Dated:- 19-8-2011 - H.S. SIDHU, K.G. BANSAL, JJ. S.K. Verma, Navin Garg, Anurag Sinha and Tushar Bansal for the Appearing Parties. ORDER 1. The aforesaid appeals of the Revenue in three cases and Cross Objections of the assessee in one case were argued in consolidated manner, as a common ground regarding deduction under section 80-IB(11) is involved. Therefore, we think it convenient to pass a consolidated order. In doing so, we take up the case of M/s. Prabhat Sheet Grah, Bagal Ghusa, Hathras Road, Agra, in the first instance. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as to minimize the post-harvest wastage of agricultural produce. A reference is made to the memorandum explaining the provision in the Finance Bill, 1999, by which sub-section (11) was proposed to be introduced in the Act, in which it is mentioned that the complex food chain from the producer to the consumer involves various intermediaries for handling and processing. The loss and wastage of perishable agriculture produce, vegetables and similar commodities continues to be high. In order to minimize such loss and to ensure smooth and uniform distribution of agricultural and processed products, it is proposed to provide 100 per cent tax holiday for a period of five years and 25 per cent (30 per cent in the case of Companies) deduction from profits derived from operating a cold chain facility, which starts operating after 1-4-1999, is proposed to be allowed for further period of five years. It is further mentioned that the words used "the complex food chain from the producer to the consumer" shows the intention of the legislature for using word "cold chain facility". Therefore, the deduction will be allowed to those undertakings which came in the chain facility starting from the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction notwithstanding anything contained in sub-section (3), even in a situation where there could be some overlapping in the contents of these two provisions. Further, clause (aa) of sub-section (14) defines "cold chain facility" in an exhausting manner to mean a chain of facilities for storage or transportation of agricultural produce under scientifically controlled conditions including refrigeration and other facilities, necessary for the preservation of such produce. Great emphasis has been laid down on the conjunction "or" used between the words "storage" and "transportation" to explain that chain of facilities may be for storage or for transportation or for both, but is applicable even if it is for the purpose of storage. Coming to the words "in a manner" used in sub-section (11), it is submitted that these words relate to the period of deduction and not to the setting up and operating of cold chain facility, as sought to be interpreted by the Assessing Officer. 3.1 In order to support his case, the Ld. Counsel referred to the details of activities carried on by the assessee and submitted to the Assessing Officer along with its submissions dated 14-11-2008. To summariz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or storage of agricultural produce so that wastage can be minimized. 3.3 The ld. Counsel also referred to the certificate issued by District Horticulture Officer, Agra, placed in the Paper Book on page No. 13 mentioning, inter alia, that cold storage is having necessary chain of facilities for storage and preservation of agricultural produce including potatoes under scientifically controlled refrigerated conditions. On the basis of this, the submission is that the cold storage has chain of facilities for storage and preservation of agricultural produce and it is not merely cold storage plant. 3.4 It is also submitted that the assessee has been granted subsidy on the basis of the finding that the cold storage reduces the post-harvest losses with multi-chamber and multi-storage facilities, by adopting modern design technology and energy saving equipments to avoid obsolescence of machinery and making improvement in technology like shifting from diffuser system to gravity cooling system. The Joint Monitoring Committee, in its report, placed in the Paper Book on page nos. 29 to 32, inter alia mentions that the firm is eligible for total subsidy as per CISS norms. NABARD has already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igned to the expression than is put down in definition. The definition is in sub-section 80-IB(14) contemplates "cold chain facility" as follows - A chain of facility for storage of agriculture produce - Under scientifically controlled conditions including refrigeration - And other facilities necessary for the preservation of such produce Considering the above facts and circumstances of the case, position of law judicial pronouncements (71 ITR 815 (SC) ITO v. M.K. Kanhai, M/s. Ambika Sheetgrah (P.) Ltd. v. ITO-IV(1), Agra (ITA No. 342/Ag/04 298/Ag/06, assessment years 2001-02 2003-04), M/s. Goyal Bandhu Sheet Grah (P.) Ltd., Agra v. ACIT-4(1), Agra (ITA No. 339/Ag/04, assessment year 2001-02) M/s. Bankey Behari Industries (P.) Ltd, Agra v. ACIT-4(1), Agra (ITA No. 340/Ag/04, assessment year 2001-02), 1995 AIR 1395 (SC) P. Kasilingam v. P.S.G. College of Technology, 1976 AIR 1031 (SC) KSE Board v. Indian Aluminum Co.), I am of the opinion that the appellant has all necessary conditions of "Cold Chain Facility" as intended under section 80-IB(11) of the Income-tax Act, 1961. I am, therefore, directing the Assessing Officer to allow the appellant's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstante clause. On the other hand, the case of the Revenue is that one has to start on chronologically while reading section 80-IB. Sub-section (3) deals specifically with cold storage plant and the assessee does not satisfy the conditions mentioned in this sub-section. As the case of the assessee fails under this sub-section, there is no need to look into the provision contained in sub-section (11). The other argument is that the Board Circular uses the conjunction "and" between the words "storage" and "transportation". This circular is in the nature of contemporaneous exposition of law by the authority involved with the formulation of law. It is issued later in time to the explanatory memorandum of the provisions issued alongwith Bill and Notes on Clauses. Therefore, it takes precedence over the Explanatory Memorandum. The circular has to be given weightage in interpretation of sub-section (11). The case of the ld. Counsel in this connection is that the circular cannot override the contents of the statute and, therefore, it has to be ignored insofar as the issue at hand is concerned. Having considered the rival submissions, we are of the view that the Board Circular cannot be com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall within the meaning and scope of the term "cold chain facility". It is the admitted position of both the parties that the facts of the case are identical with the facts of M/s. Prabhat Sheet Grah. Over and above the submissions made in that case, the ld. Counsel for the assessee referred to page No. 23 of the decision in the case of Ambica Sheet Grah (P.) Ltd. (supra) in which the appeals of the Revenue in the case of Goyal Bandhu Sheet Grah (P.) Ltd. v. ACIT [IT Appeal No. 339 (Agr.) of 2004] and Bankey Bihari Industries (P.) Ltd. v. ACIT [IT Appeal No. 340 (Agr.) of 2004] have also been dismissed by following the decision in the main case. Thus, the position which finally emerges is that facts of this case are identical with the facts of the case of Ambica Sheet Grah (P.) Ltd. (supra). Following our decision in that case, these appeals are also dismissed. 6. As in earlier cases, the grievance of the Revenue in the case of Maa Gayatri Cold Storage is also that the ld. CIT(A) erred in allowing deduction under section 80-IB(11) ignoring the facts that mere providing of refrigerated cold storage facility being single unit for potatoes, cannot be construed as the undertaking fal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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