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TMI Blog2016 (5) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... neness of expenditure is not in doubt, there is no question of disallowance u/s 14A of the Act - Decided in favour of the assessee. - ITA NO.5746/MUM/2013 - - - Dated:- 7-4-2016 - Shri Joginder Singh, Judicial Member and Shri Rajendra, Accountant Member For The Revenue : Ms. Amrita Misra -DR For The Respondent : Shri Madhur Agarwal ORDER Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 27/05/2013 of the ld. First Appellate Authority, Mumbai. Grounds No.1, 3 and 4 raised in this appeal pertains to allowing deduction by the Commissioner of Income Tax (Appeal) u/s 80IA(4) of the Income Tax Act, 1961 (hereinafter the Act) without appreciating the facts. 2. During hearing, the ld. counsel for the assessee, Shri Madhur Agarwal, claimed that the impugned issue is covered in the case of assessee itself by the decision of the Tribunal dated 20/11/2015 (ITA No.5371 and 3654/Mum/2012), Assessment year 2008-09. This factual matrix was not controverted by the ld. DR, Ms. Amrita Misra. 2.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee, observed that as per the provisions of section 80IA(12)(ca), CFS is not an infrastructure facility and not such even within the meaning of section 80IA(4). He also observed that circular no.793 dated 23rd June 2000 issued by the CBDT does not mention CFS to be an infrastructure facility. He further observed that as per the said circular, the assessee has to obtain a certificate from the competent authority if it seeks to claim deduction under section 80IA(4). However, the assessee has not obtained any such certificate for assessment year 1998 99. Therefore, the assessee does not qualify for the definition of Port as amended by the Finance Act, 1998. He further observed that section 80IA(4) is further amended by Finance Act, 2007, w.e.f. 1st April 2008 as per which inland port was included as infrastructure facility. However, such amendment being effective from 1st April 2008, inland port which commenced operation on / or after 1st April 2008, will qualify for deduction under section 80IA(4). Further, it was observed by the Assessing Officer, in response to a letter written by him to CIDCO, it was informed by the said authority that permission given to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year cannot be sustained. Having held so, he noticed that as per the definition of infrastructure facilities under section 80IA(4), it includes any public facility as notified by the Board in the official gazette. He further observed, Government of India, vide notification S.O. 744E dated 1st September 1998, as amended by S.O. 391E dated 28th May 1999, has clarified that inland container depot or CFS are infrastructure facility in terms with section 80IA(12)(ca) of the Act. The learned Commissioner (Appeals), after analysing the agreement with CIDCO, found that it is a valid agreement between the assessee and the Government which has also been approved by CBDT as well as Commerce Ministry. He also found that the Ministry of Shipping has allowed the facility to be used as port for all practical purposes. He also noticed that as per the terms of agreement, after expiry of 60 years, the area allotted along with all facilities will revert back to the local authority. He, therefore, was of the opinion that all conditions of section 80IA(4) was satisfied. Thus, on the aforesaid basis, the learned Commissioner (Appeals) directed the Assessing Officer to allow assessee s claim of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions: i) CIT v/s Western Outdoor Interactive Pvt. Ltd., [2012] 349 ITR 309; ii) CIT v/s Paul Bros., [1995] 79 Taxman 378. 7. The learned Counsel submitted, the fact that the assessments for some of previous years have been re opened on the basis of assessment order passed for the assessment year 2008 09 cannot have any impact on assessee s claim of deduction as the facts existing on the date of assessment for the assessment year 2008 09 has to be considered. It was submitted, even the re opening of assessment was up to the assessment years 2004 05. Therefore, the deduction allowed to the assessee for the initial two assessment years 2002 03 and 2003 04 remain unaltered. Therefore, deduction having already allowed to the assessee in the first two assessment years, it cannot be withdrawn in the subsequent assessment year. The learned counsel submitted, the Assessing Officer also totally misread the provisions of the Act while inferring that assessee is not a infrastructure facility by referring to the amendment brought by Finance Act, 2007, w.e.f. 1st April 2008. The learned counsel submitted, inland port was already included as an infrastructure facility under Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate authority. 8. We have considered the submissions of the parties and perused the orders of the authorities below as well as the material available on record. Undisputedly, the assessee entered into an agreement with a statutory body i.e., CIDCO for development, operation and maintenance of CFS. It is also not disputed that the same is also approved and notified by CBDT. Therefore, the first issue which arises for consideration is whether CFS is an infrastructure facility under section 80IA(4). The Assessing Officer has held that CFS is not an infrastructure facility and further since the agreement with CIDCO is not BOT / BOLT, the assessee is not entitled for deduction under section 80IA. At the outset, it needs to be observed that as per Explanation to section 80IA(4), as it existed prior to its substitution by Finance Act, 2007 w.e.f. 1st April 2008, read as under: Explanation For the purpose of this clause, infrastructure facilities means a) xxx b) xxx c) xxx d) A port, airport, inland water way or inland port. By Finance Act 2007 in place of inland port , the following words were substituted. Inland port or navigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y been allowed to the assessee in the initial assessment years, whether the same can be disallowed in any subsequent assessment year. As can be seen from the material placed before us, the first year of claim of deduction by assessee under section 80IA(4) in respect of CFS was assessment year 2002-03. The Assessing Officer, while completing the assessment under section 143(3) of the Act accepted assessee s claim. Thereafter, from the assessment year 2003 04 to 2007 08, claim of deduction under section 80IA(4) in respect of CFS was continuously allowed by the Assessing Officer in orders passed under section 143(3). On a reading of sub section (2) of section 80IA, it is very much clear that an assessee would be eligible to claim deduction under section 80IA, at his own option, for any 10 consecutive assessment years out of 15 years beginning from the year in which the undertaking develops and operates the infrastructure facility. As is apparent from the facts on record, in case of the present assessee, it has opted for availing deduction under section 80IA(4) from the assessment year 2002 03. Thus, once the claim of deduction has been allowed by the Department by examining relevant f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is an infrastructure facility. Even in the course of hearing, the learned Departmental Representative has not brought any material before us to dispel the factual findings of the first appellate authority either with regard to the issue that CFS is an infrastructure facility under section 80IA(4) or the fact that the assessee has fulfilled all conditions of section 80IA(4) including the fact that it has developed, operated and maintained an infrastructure facility which is supposed to revert back to Government after specified period. In view of the aforesaid, we do not find any reason to disturb the findings of the first appellate authority on the issue. Accordingly, we dismiss the ground raised by the Revenue. 2.2. We find that in the aforesaid order for Assessment year 2008-09, an elaborate discussion has been made on the issue in hand as the assessee is engaged in the business of developing, operating and maintenance of container freight station (CFS) at Nhava Sheva, Mumbai, which is also approved by the concerned ministry of Government of India and duly entered into an agreement with CIDCO. As per the terms of the agreement, CIDCO allowed the assessee to set up and ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A [2005] 278 ITR (AT) 1 (Ahd) (para 10) xiii. Maxopp Investment Ltd. v. CIT [2012] 347 ITR 272 (Delhi) (para 12) I. T. A. No. 749 of 2014. 3.1. In view of the factual matrix and following the aforesaid decision from Hon ble Delhi High Court and in the absence of any contrary decision brought to our notice by either side, we find no infirmity in the conclusion of the Commissioner of Income Tax (Appeal) and affirmed the same, thus, this ground of the Revenue is also having no merit, consequently, dismissed. 4. The last ground pertains to deleting the disallowance u/s 14A of the Act from the book profit u/s 115JB of the Act without appreciating that the expenditure relatable to u/s 14A is covered under clause (f) of explanation 1 to section 115JB of the Act. The crux of argument on behalf of the assessee is that it is consequential to ground no.2. This factual matrix was not controverted by ld. DR. 4.1. Considering the totality of facts and since we have affirmed the stand of the Commissioner of Income Tax (Appeal), following the decision from Hon ble Delhi High Court in 378 ITR 333 (supra), the impugned ground is consequential in nature and therefore, dismissed. Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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