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TMI Blog2012 (6) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT[Appeals]-III, Chennai all dated 19.03.2010 for Assessment Years 2002-03 and 2003-04 respectively. Since the issue involved in both these appeals is same, we are disposing them off by this consolidated order for the sake of brevity and convenience. 2. The sole grievance raised by the Revenue in both these appeals for Assessment Years under consideration is that the Commissioner of Income-tax has erred in directing the Assessing Officer to treat the warehousing charges amounting to Rs.6,08,02,007/- in Assessment Year 2002-03 and Rs. 41,65,148/- in Assessment Year 2003-04 as part of Container Freight Station income eligible for deduction u/s 80IA of the Act. 3. Brief facts of the case are that the Assessing Officer has observed in the assessment order passed u/s 154 r.w.s. 254 of the Income-tax Act, 1961 [in short, the Act] dated 10.06.2009 that the crux of the issue was whether the income earned by the assessee through its bonded warehouse would take the character of income derived from Container Freight Station eligible for deduction u/s 80IA(4) of the Act. He observed that the assessee company at Numbal village near Chennai carries on two activities, namely, operating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 5. On appeal, the ld. CIT(A) allowed the deduction u/s 80IA on income from warehousing charges to the assessee by following the order of his predecessor in ITA No. 599 of 2006-07 and 327/2007- 08/A-III in Assessment Year 2004-05 and 2005-06 respectively and also the order dated 18.3.2006 passed by his predecessor in ITA No. 513/2008-09/A-III. 6. At the time of hearing, the ld. D.R. conceded that the issue is covered in favour of the assessee by the decision of this Tribunal in assessee s own case reported in [2011] 7 ITR [Trib] 532 [Mds]. 7. We find that the Tribunal, while deciding this issue in Assessment Year 2002-03 to 2005-06 has held as under: We have considered the rival submissions and the material available on record. First of all, we would like to make an observation that by not following the directions of the Income-tax Appellate Tribunal which were very well available before the Assessing Officer at the time when he was giving effect to the Commissioner of Income-tax s direction, is a serious procedural lapse on his part. When the order of the Commissioner of Income-tax had already merged with that of the Income-tax Appellate Tribunal, the directions given b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, warehousing temporary admissions, re-export, temporary storage for onward transit and outright export, trans-shipment, take place from such stations . 3.8 Therefore the CFS activity presupposes adequate infrastructure towards warehousing and the income therefrom cannot be contended as non CFS income. 3.9 The fact that warehousing activity outside CFS does not qualify for deduction under section 80-IA by no stretch can be a consideration for treating the activity inside a notified CFS alike. The activities of CFS are completely different from what happens outside. 3.10 The Government of India, further to the issuance of its policy guidelines regarding setting up of inland container depot (ICD) and CFS in India has released a set of specific guidelines containing three parts, viz., part A, part B and part C for the above purpose. The guidelines essentially lays down basic conditions one has to comply with in order to set up a CFS and operate the same. 3.11 Part C of the above guidelines governs the procedure for approval of CFS and its implementation. In terms of the said policy guidelines issued by the Ministry of Commerce, Government of India the appellant-company made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rminal, in case where only chassis operation is to be performed, the pavement standard could be limited to that of a highway. A minimum of 35 per cent of the land area (provided as per the guidelines - 1 acre for the Port CFS and 3 acres for ICDs in the hinterland) would be paved. (b) Office building for ICD, customs office and a separate block for user agencies equipped with basic facilities. (c) Warehousing facility, separately for exports and imports and long-term storage of bonded cargo. (d) Gate complex with separate entry and exit. (e) Adequate parking space for vehicles awaiting entry to the terminal . . . 3.12 Therefore, if one has to qualify as an eligible container freight station operator, one has to provide the minimum level of infrastructure as provided in the notification and as such having adequate warehousing facility is an essential part of the minimum level of infra- structure requirements. 3.13 Here it may be mentioned that as per part B of the guidelines for setting up inland container depot (ICD) and container freight station (CFS) in India the following infrastructure should be available at the ICDs/CFS. Provision of standard pavement for heavy du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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