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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 ..... r the relevant portion from the aforesaid order dated 20/11/2015 (ITA No.3654/Mum2012) for ready reference and analysis:- 2. "The only issue involved in this appeal relates to the direction of the learned Commissioner (Appeals) in allowing assessee's claim under section 80IA(4) of the Income Tax Act, 1961 (for short "the Act"). 3. Briefly stated the facts are, the assessee, a company, is engaged in the business of developing operating and maintaining a container freight station (CFS) at Nhava Sheva, Mumbai, which is also approved by the Ministries of Revenue, Commerce and Shipping, as well as Customs Department, Government of India. As stated by the assessee, it has set-up the CFS in the financial year 1998-99 after duly entering into an agreement with CIDCO. As per the terms of agreement, CIDCO allowed the assessee to set-up and operate the CFS for a period of 60 years. For the assessment year 2008-09, the assessee filed its return of income on 29th September 2008, declaring total income of Rs. 17,23,16,060. Subsequently, revised return was filed by the assessee on 13th June 2009, declaring total income of Rs. 17,23,16,060. During the assessment proceedings, the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessee was for construction of warehouse and not for CFS. Hence, the assessee is not eligible for deduction under section 80IA(4). Finally, the Assessing Officer opined that the agreement entered into with CIDCO by the assessee is a lease deed under which the assessee was allowed a piece of land for commercial purpose. However, it cannot be considered to be an agreement with the Government as prescribed under section 80IA(4). He also observed that as per information obtained from CIDCO, the assessee has not entered into BOT / BOLT agreement, therefore, the conditions of section 80IA(4) are not complied. On the aforesaid premise, the Assessing Officer finally disallowed assessee's claim of deduction under section 80IA(4). Being aggrieved of such disallowance, the assessee preferred appeal before the first appellate authority. 4. In the course of hearing of appeal before the first appellate authority, the assessee made detail submissions contesting each of the findings of the Assessing Officer while disallowing assessee's claim of deduction. The learned Commissioner (Appeals), after considering the submissions of the assessee in the light of facts and material onrecord as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of deduction under section 80IA(4). 5. The learned Departmental Representative, Smt. Anupama Shukla, though agreed that assessee had been claiming the deduction under section 80IA(4), from the assessment year 2002-03 and it has also been allowed to the assessee by the Department but she submitted that in the impugned assessment year, certain additional facts / information came to the possession of the Assessing Officer which revealed that assessee has not fulfilled the condition of section 80IA(4). The learned Departmental Representative submitted, each assessment year being an independent unit, irrespective of fact whether deduction was allowed in the earlier assessment year still the Assessing Officer can form an independent opinion on the basis of information obtained in a subsequent assessment year with regard to the deduction claimed by the assessee. She, therefore, submitted, the Assessing Officer having found that assessee has not fulfilled all the conditions of section 80IA(4) was competent to disallow assessee's claim of deduction. Further, the learned Departmental Representative submitted on the basis of the assessment made for the assessment year 2008-09, assessments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation to section 80IA(4) since 1st April 2002, and in Finance Act, 2007, for the expression "or inland port" the following words were substituted - "Inland port or navigational channel in the sea". Thus, it was submitted by the learned Counsel on merits also, CFS being an "inland port" is an infrastructure facility in terms with section 80IA(4), hence, is eligible for deduction. For such proposition, he relied upon the decision of the Tribunal in another group company i.e., Gateway East India Pvt. Ltd. v/s ACIT, ITA no.15/ Vizag./2015, order dated 29th April 2015. As far as the contention of the learned Departmental Representative that each assessment year being separate and independent unit, the Assessing Officer can form an independent opinion on a particular issue if additional information come to his possession, the learned counsel strongly contesting such submissions submitted, only in a case where there is change in facts which existed in earlier assessment year, the Assessing Officer can take an independent view. However, when the facts are identical, the Assessing Officer on the basis of information obtained as a result of enquiry conducted by him, cannot take an independe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Thus, as can be seen from the aforesaid reading of the provisions, "inland port" was a infrastructure facility from the assessment year 2002-03 onwards. The Hon'ble Jurisdictional High Court in CIT v/s Continental Warehousing Corporation Ltd., ITA no.523/2013 and ITA no.1969/2013, has held that CFS for the purpose of section 80IA(4) is to be considered as an inland port. In fact, the Tribunal, Vizag Bench, in Gateway East India Pvt. Ltd. (supra), following the decision of the Hon'ble Delhi High Court in Container Corporation of India Ltd. v/s CIT, held that CFS being an inland port is an infrastructure facility for the purpose of section 80IA(4). In view of the aforesaid, we have no hesitation in holding that assessee having developed, operated and maintained a CFS is eligible for deduction under section 80IA(4). 10. The second argument of the Department is the agreement with CIDCO is not BOT / BOLT by virtue of which infrastructure facility developed by the assessee would revert back to the Government after a specified period, it is not eligible for deduction. However, on a reading of the provisions of section 80IA(4)(i)(b), as it existed from 1st April 2002, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst assessment years, it cannot be withdrawn in any subsequent years when there is no material change in the relevant facts. In the present case, it is patent and obvious that there is no material difference in the facts involved in the assessment year 2002-03 and the impugned assessment year, as the agreement with CIDCO and all other related facts remain same. That being the case, in our view, when deduction is allowed to the assessee in the first year of claim it cannot be withdrawn in any subsequent year. The argument by the Department that the assessment in the case of some of the preceding assessment years has been re- opened under section 147 cannot improve the situation of the Department as the position on the date of assessment for the assessment year 2008-09 has to be taken into account. If that is the case, it is very much clear that on the date, the Assessing Officer completed the assessment for assessment year 2008-09 the uncontroverted position was assessee's claim of deduction under section 80IA(4) in respect of CFS was allowed from the assessment year 2002-03 to 2007-08, that too, in assessments completed under section 143(3) of the Act. Therefore, the Department ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60 years. Since, the issue has been discussed in detail after analyzing the facts and after placing reliance upon certain decisions like fro Hon'ble Apex Court in Bharat Sanchar Nigam Ltd. vs UOI (2006) 282 ITR 273 (SC) and Hon'ble jurisdictional High Court in CIT vs Paul Brothers (1995) 216 ITR 548 (Bom.), notification S.O. 744E, dated 01/09/1998, as amended by SO 391E dated 28/05/1999, decision in CIT vs Western Outdoor interactive Pvt. Ltd. 249 ITR 309 and then affirmed the decision of the CIT(A), in favour of the assessee. Following the aforesaid decision and the reasoning contained therein, the ground raised by the Revenue is having no merit, therefore, dismissed. 3. The next ground pertains to deleting the disallowance made u/s 14A of the Act ignoring the ratio of the Tribunal in Cheminvest Ltd. (121 ITD 318)(Del.). The crux of argument on behalf of the assessee is that no income was earned by the assessee and merely hypothetical disallowance has been made. Reliance was placed 378 ITR 33 (Del.) order dated 02/09/2015. Considering the totality of facts and the arguments from both sides, we find that the Hon'ble Delhi High Court in the aforesaid order dated 02/09/2015 held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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