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TMI Blog2017 (1) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... peared on behalf of Revenue nor any adjournment application filed. Hence, we have taken up the appeal for hearing in the absence of Revenue. Shri Subash Agarwal, Ld. advocate appeared on behalf of assessee. 3. Solitary issue raised in this appeal of assessee is that Ld. CIT(A) erred in confirming the order of Assessing Officer by disallowing the deduction claimed u/s 10AA of the Act in respect of trading, warehousing and consultancy income. 4. Briefly, the facts are that assessee in the present case is a Private Limited Company and engaged in the business of import and export of tobacco products, CNF agent, trading of all types of FMCG products alcoholic and non-alcoholic beverages. The assessee, for the year under consideration has filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods should be stored by assessee in its godown on behalf of some party and the same should be released at the instruction of the party. In the instant case, the assessee company has shown purchase of goods and thereafter purchased return in the books of accounts. The assessee on such transactions of purchase and purchase return has shown warehousing charges income in its books. So it was clear that assessee did not provide warehousing services. 4.2 Besides the above, assessee did not furnish any documentary evidence that assessee was engaged in clearing and forwarding agency business or storing the goods as agent of the party. Similarly, the bank releasing certificate was also not furnished in order to ascertain the nature of the pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purpose of marketing activities on behalf of overseas customers. The consultancy charges are intrinsically linked with normal import-export activity carried out by assessee from its SEZ units. However, Ld. CIT(A) disregarded the claim of assessee after observing that definition provided under the SEZ Rules, 2006 which is included trading activities within the meaning of 'service' cannot applied in the income tax proceedings. Similarly, assessee has shown warehousing income from storing its own goods which cannot be regarded as service eligible for deduction u/s. 10AA of the Act. Similarly, the consultancy charges claimed by assessee were not treated as service and accordingly the deduction u/s. 10AA of the Act was denied. Being agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AA of the Act with regard to trading and warehousing & consultancy income. 7.1 First we take up the issue of trading income of the assessee. Admittedly the assessee is engaged in the import and export of the goods which is in the nature of trading activities. As per the Income Tax Act the trading activity is not entitled for the exemption under section 10AA of the Act. However the SEZ Rules 2006 elaborate the service in its rule 76 which says that the service includes trading activities if it relates to the import of the goods for the purposes of export in terms of its explanation to rule 76 of 2006. At this juncture it is so important to reproduce the relevant provisions of SEZ rules 2006 which read as under:- "76. The "services" for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct 1961 will prevail over the provisions of The Special Economic Zones Act, 2005. At this point it is relevant to refer the relevant provisions of section 51 of SEZ Act 2005 which is given below:- "51.(1) The provisions of this Act shall have Act to have effect notwithstanding anything inconsistent overriding effect, therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act." 7.2 From the reading of the provisions it is clear that the provisions as specified under The Special Economic Zones Act, 2005 would have overriding effect on the Income Tax Act. The same view has also been held in the own case of the assessee by the Hon'ble ITAT in ITA No.30/Kol/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ITA No. 6947 & 6948/Mum/2011 dated 08-05-2013 has also been placed on record in which the view expressed by the Jaipur Bench has been reiterated. No contrary precedent has been brought to our notice by the Ld. DR. In view of the two Tribunals orders available on the point allowing exemption u/s. 10AA of the Act in respect to 'trading' activities, we are of the considered opinion that no exception can be taken to the view expressed by the Ld. CIT(A) in granting the exemption." Now coming to the issue of denial of exemption in respect of warehousing and consultancy services we find that the assessee has produced FIRC, ledgers, invoices for consultancy and warehousing charges which are placed on pages 28-43 of the paper book. On perusal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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