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TMI Blog2011 (8) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... ng single unit for potatoes only, cannot be construed as the undertaking of "cold chain facility". The Cross Objections of the assessee are in support of the order of the Ld. CIT(A) and it is mentioned that she rightly allowed the deduction after considering facts of the case and the law, and that the issue stands covered by the decision of ITAT, Agra Bench, Agra. As the facts for both the years are identical, we may base this order on the facts mentioned in the orders of the lower authorities for assessment year 2003-04. 2. The Ld. Departmental Representative drew our attention towards the findings of the Assessing Officer dated 3-3-2006. The facts are that the assessee-firm is running a Cold Storage. It has received a total sum of Rs. 1,77,19,763 in terms of agreements made on 1-1-2002 and 1-1-2003. The net profit has been declared at Rs. 25,67,770. After claiming unabsorbed depreciation of assessment year 2002-03, the total income has been computed at Rs. 21,33,808. This amount has been claimed as deductible under section 80-IB(11) of the Act. The submissions of the assessee had been that it is engaged in operating a cold chain facility for agricultural produce. Since all other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oard under Circular No. 779 on 14-9-1999. In paragraph no 39.4-3, it is mentioned that the term "cold chain facility" has been defined to mean a chain of facilities for storage and transportation of agricultural produce under scientifically controlled conditions including refrigeration and other facilities necessary for preservation of such produce. He emphasized that the words used are "chain facilities for storage and transportation of agricultural produce" and it has been mentioned that such a facility includes refrigeration and other facilities necessary for preservation of such produce. In the light of this circular, which is in the nature of contemporaneous exposition of the new law, it is argued that the cold chain facility is a wider concept than a cold storage plant, the former requiring storage and transportation including refrigeration and other necessary facilities. The assessee is merely running a Cold Storage Plant. However, it does not satisfy the conditions mentioned in sub-section (3) for claiming any deduction. If its case fails under sub-section (3), it cannot go to sub-section (11) because a cold storage plant as a stand-alone facility does not constitute a chai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and verandas with staircases which can be used for efficient unloading of the agricultural produce. It also has sufficiently covered and properly ventilated space for cooling and drying potatoes before storing them in the chamber of cold storage. Facility also exists for sample testing/checking the condition of potatoes from time to time and stacking the potatoes in a manner so as to ensure efficient circulation of air for preservation. It has facility of two ammonia refrigeration compressors and evaporative condenser stands which are adequate for efficient preservation of the potatoes. The temperature in the cold storage can be controlled as desired and the temperature can be brought down between 1 degree to 3 degree centigrade for efficient preservation of potatoes. The plant has also facility of bunker cooling coils fitted with low speed, high volume natural draft cooling arrangement with a view to preserve humidity at a required level. It is submitted that all these facilities taken together constitute a chain of facilities for storage of potatoes. 3.2 Further, the ld. Counsel for the assessee referred to the certificate issued by Shri Y.P. Gupta, Government Approved Valuer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commended release of final installment of the subsidy, therefore, the assessee is operating cold chain facility for storage of agricultural produce. 3.5 Coming to the findings of the ld. CIT(A), our attention has been drawn towards paragraph no. 2.5 of the impugned order, which reads as under :- "2.5 I have considered the facts of the case, assessment order of the Assessing Officer, submission of AR & position of law. In my opinion, the contention of the appellant has considerable merit. During the course of appellate proceedings, the AR of the appellant has argued that the appellant firm is having/providing all necessary chain of facilities for storage of Potatoes under scientifically controlled conditions including refrigeration necessary for the preservation of potatoes. In other words no other facility (including any machinery etc. for any unloading, chatai, testing the condition of potato) is further required which the undertaking does not possess, and is necessary for preservation of potatoes. The AR of the appellant also produced a certificate of District Horticulture Officer stating as under :- "This is to certify that M/s. Prabhat Sheetgraph Bagal Ghunsa, Agra is having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilarly situated assessees. We think it appropriate to summarize the findings of this order at this stage. It has inter alia been held that: (i) the deduction is admissible even in a case where the cold chain facility is meant only for storage because of the use of word "or" in the definition section; (ii) the assessee is carrying on a number of activities in aid of the activity of storage of agricultural produce which constitutes the cold chain facility, which works in scientifically controlled conditions for the preservation of agricultural produce; (iii) even if there are two plausible interpretation, one which confers benefit to the assessee should be adopted; and (iv) sub-section (11) hold the field vis-a-vis sub-section (3) because of non obstante clause. 4. We have considered the facts of the case and submissions made before us. Briefly, the facts are that in the cold storage plant, the assessee has provided facilities for a number of activities such as loading, unloading, cooling before placing the agricultural produce in the cold storage, storage at desired temperature to minimize loss, heating before dispatch after removal of the agricultural produce etc. Various other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the word "or" used in clause (aa) of sub-section (14) should be read as "or" or "and" looking to the overall contents of the definition in sub-section (14) and the provision contained in sub-section (11). One could come to the conclusion that cold chain facility becomes complete only when it caters to transportation and storage and it remains incomplete when only storage is involved, therefore, the word "or" should be read as "and". On the other hand, it can also be held that various attendant facilities provided alongwith storage complete the cold chain facility insofar as storage is concerned. We find that on consideration of all these issues, a co-ordinate Bench has already taken a decision in the case of Ambica Sheet Grah (P.) Ltd. (supra) that storage and attendant facilities in themselves complete the cold chain facility of storage. The judicial discipline demands that this decision should be followed. Therefore, we prefer to follow the decision in the interest of judicial discipline and hold that under the provision there can be a chain of facilities in respect of storage only. Accordingly, the appeals of the Revenue are dismissed. 4.1 Since the Cross Objections are onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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