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TMI Blog2024 (10) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is to the effect that on expiry of the concession period, the structures, building constructed by or belonging to KSPL or their subcontractors, sub lessees, assignees free from all encumbrances and liability shall automatically become property of Government of Andhra Pradesh without any obligation to reimburse therefrom. In terms of the said condition, the Mechanised Coal Handling Terminal Installation of the assessee are to be taken over by the Government of Andhra Pradesh at the expiry of the concession period. Tribunal was also right in coming to the conclusion that the permission obtained from the customs authority by the assessee vide a letter dated 01.02.2013 is deemed to be the approval granted by the competent authority of the Central Government and in this regard, the learned tribunal rightly took note of the decision in the case of A.L. Logistics Private Limited [ 2015 (1) TMI 401 - MADRAS HIGH COURT ] which was affirmed by the Hon ble Supreme Court in Container Corporation of India Limited [ 2018 (5) TMI 359 - SUPREME COURT ] As under clause 13 power has been granted to appoint its own labour, agents, pilots etc. to carry out all port related activities at deep water ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue is also identical, we refer to the facts for the assessment year 2015-2016 which would cover the other assessment year as well. The revenue is aggrieved by the impugned order passed by the learned tribunal setting aside the disallowance of deduction claimed under Section 80IA (4) of the Income Tax Act, 1961 (the Act). The facts which are necessary for the disposal of the appeal are as hereunder:- 4. The Government of Andhra Pradesh (AP) entered into an agreement with Kakinada Sea Port Limited (KSPL) vide concession agreement dated 19.03.1999 for operation of existing berth, develop and operate one more berth and operation, maintenance and management of common facilities of the entire port through private participation. KSPL was appointed as a nodal agency by AP to take over the existing port and also develop, operate and maintain further infrastructural facilities including new berth. AP entered into a supplementary agreement dated 28.01.2009 giving permission to KSPL to develop new berth, accordingly berth no 5 was developed by KSPL. KSPL entered into an agreement with the assessee on 19.04.2012 for the development of 8 MMTPA Mechanised Port Handling System for unloading and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) (i) on the ground that there was no condition in the agreement for retransfer of the assets back to the Government of Andhra Pradesh or the specified authority, however such condition was deleted by the Finance Act, 2001 and therefore it is no longer available in the statute. Without prejudice it was contended that for the purposes of deduction under Section 80IA (4) (1). KSPL should be considered to be statutory authority as it is performing statutory functions on behalf of the Government of Andhra Pradesh. The Dispute Resolution Panel (DRP) by order dated 05.08.2019 rejected the contention raised by the assessee primarily on the ground that KSPL entered into an agreement with AP on 16.04.2001 and 28.01.2009. As per the agreement between the KSPL and the assessee, they were entrusted the work of development of the infrastructural facilities, but KSPL has not developed the facility and the assessee has not entered into any agreement with the Government or the authority and therefore they do not fulfil the second condition and not eligible for deduction under Section 80IA (4) of the Act. Further the DRP held that in case, it is considered that KSPL has given the job work to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India. Thus, we are required to consider as to what are the terms and conditions in the agreements which have been entered into between the contracting parties. 12. Before proceeding to do so, we take note of the submissions made by the learned senior standing counsel for the revenue contending that the court is to see the words of the statute and not the spirit and no inference and no analogy can be drawn. That court cannot import anything while interpreting the revenue statute. There is no presumption of tax; nothing is to be read in; nothing is to be implied in; and one can only look at the language used. Equitable considerations are wholly out of place while dealing with taxing statute and the words are to be taken as it stands. There is no equity in fiscal statute. The intentions of the legislature are to be primarily gathered from the words used in the statute. Tax and equity is a stranger. There is no scope of the equity in fiscal legislature. Taxing statute should be interpreted in accordance with its ordinary and natural being and so called equitable construction is not permissible. Fiscal legislature should be interpreted in accordance with the strict rules of interpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure specially the transport infrastructure, Finance Act, 1995 which came into effect April 01, 1996 brought an amendment to the provisions of Section 80IA of the Act. In the said decision, the Hon ble Supreme Court upheld the views taken in the case of Commissioner of Income Tax Versus A.L. Logistics Private Limited (2015) 374 ITR 609 (Mad). In the said decision, the Hon ble Division Bench has held that the specific issue as to whether in the absence of a specific agreement with the Central/State Government, local authority or statutory body the assessee is entitled to claim the benefit under Section 80IA (4) (i) was considered and after analysing the terms and conditions of the agreement as well as the orders passed by the Government of India, it was held that the proposal of the said assessee was accepted by the Government on certain conditions which were duly complied with by the said assessee and therefore even if there may not be any specific agreement but the sequence of events clearly show that the assessee therein is providing container freight station facility in accordance with the conditions laid down by the Government and therefore there is no need to insists or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contemplation of the Legislature and it is treated specifically as a infrastructural facility. Therefore, to that extent Mr. Dastur is right in his submission. 16. While considering the judgments relied on by the learned senior standing counsel for the department with regard to how the words in fiscal statute should be interpreted, we are obliged to take note of the decision of the Hon ble Supreme Court in Government of Kerala and Another Versus Mother Superior Adoration Convent (2021) 5 SCC 602 wherein the Hon ble Supreme Court held that there is another line of authority which states that even in tax statutes an exemption provision should be liberally construed in accordance with the object sought to be achieved if such provision is to grant incentive for promoting economic growth or otherwise has some beneficial reason behind it and in such cases, the rationale of the judgments following Union of India Versus Wood Papers Limited (1990) 4 SCC 256 does not apply. It was pointed out that the legislative intent is not to burden the subject to tax so that some specific public purpose is furthered. The Hon ble Supreme Court referred to the decision in Commissioner of Income Tax Vers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions has been done away with by this five-Judge Beach. It is well settled that a decision is only an authority for what it decides and not what may logically follow from it (see Quinn v. Leathem as followed in State of Orissa v. Sudhansu Sekhar Misra, SCR at pp. 162-63: AIR at pp. 651-52. para 13). 27. This being the case, it is obvious that the beneficial purpose of the exemption contained in Section 3(1)(b) must be given full effect to, the line of authority being applicable to the facts of these cases being the line of authority which deals with beneficial exemptions as opposed to exemptions generally in tax statutes. This being the case, a literal formalistic interpretation of the statute at hand is to be eschewed. We must first ask ourselves what is the object sought to be achieved by the provision, and construe the statute in accord with such object. And on the assumption that if any ambiguity arises in such construction, such ambiguity must be in favour of that which is exempted. Consequently, for the reasons given by us, we agree with the conclusions reached by the impugned judgments 2 of the Division Bench and the Full Bench. 18. Undoubtedly the benefit of deduction provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to CPCL by assignment deed dated 02.04.1999. Subsequently the name of CPCL was changed as Kakinada Sea Ports Limited (KSPL) on 18.09.2001 and necessary fresh certificate of incorporation was issued by the Registrar of Companies, Andhra Pradesh. Thus, it is clear that in the primary concession agreement will include their respective successors and assigns intending to be legally bound under the agreement. Thus, KSPL as SPC is responsible for discharge of terms and conditions stated in the primary concession agreement as an assignee of ISPL. 21. Further it is seen that the subrogation which was granted to KSPL as SPC was approved by the Government of Andhra Pradesh. Subsequently an agreement was entered into between KSPL and the assessee for establishment of 8 MMTPA Mechanised Coal Handling System for unloading and rail despatch in the Kakinada Deep Water Port at berth no. 5 and its backup area vide agreement dated 19.04.2012. For better clarity, the arrangement between parties is explained in the flowchart as hereunder:- 22. Thus, it is clear that the assessee has developed the Mechanised Coal Handling System in terms of the agreement entered into by it with KSPL and KSPL is non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty of Government of Andhra Pradesh without any obligation to reimburse therefrom. 24. In terms of the said condition, the Mechanised Coal Handling Terminal Installation of the assessee are to be taken over by the Government of Andhra Pradesh at the expiry of the concession period. The learned tribunal was also right in coming to the conclusion that the permission obtained from the customs authority by the assessee vide a letter dated 01.02.2013 is deemed to be the approval granted by the competent authority of the Central Government and in this regard, the learned tribunal rightly took note of the decision in the case of A.L. Logistics Private Limited (supra) which was affirmed by the Hon ble Supreme Court in Container Corporation of India Limited (supra). 25. One more condition in the concession agreement dated 19.03.1999 would be of relevance namely condition no. 7.3 which deals with Sharing of Income to Concessionaire ; the said condition states that the concessionaire (ISPL) shall share with Government of Andhra Pradesh, income to concessioner on the basis of sharing percentage as given in the table 7.1. This undoubtedly is a very relevant condition which would also buttress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y against act or default of port-officials or pilot. 12. Power to make Rules for the safety of shipping and port operations. 13 Power to appoint its own labour, agents, pilots, etc to carry out all port related activities at the DWP including amongst others, stevedoring, handling, storing, marine operations, security, etc 14. Power to issue port clearances 15. Authority to interact with all Govt / statutory agencies directly as the authorised licencee. 16. Powers to board, inspect and authorise inspection of vessels 17. Other authorities to discharge the obligations of this concession agreement 18. Power to enforce all the above rules / authorities 27. Among all powers conferred as mentioned above, it is relevant to note that under clause 13 power has been granted to appoint its own labour, agents, pilots etc. to carry out all port related activities at deep water port, Kakinada including amongst others handling, storing, marine operations, security etc. Further in terms of the clause 17, the nominee of ISPL among other powers the other authorities to discharge the obligations of the concession agreements. 28. In the light of the above factual discussion, we have no hesitation to h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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