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TMI Blog2012 (9) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... (11A) of the Act to the tune of Rs. 64,00,624/-. 4. During the course of assessment proceedings, the Assessing Officer sought clarification from the assessee to establish his eligibility for the claim of deduction u/s. 80IB(11A) of the Act. In response to which, the assessee vide his letter dt. 28.5.2007 submitted that M/s. Siddhivinayak Enterprises is deriving profit from integrated business of handling, storage and transportation of foodgrains. It was further submitted that the assessee has been appointed as a contractor for handling of foodgrains at Turbhe/Kalyan/Bhivandi Goods Shed and storage of foodgrains at Bhivandi Depot and transportation of i.e. foodgrains from all the above goods shed to Bhivandi Depot and vice versa. To substantiate his claim, the assessee submitted a letter from the Food Corporation of India in which M/s. FCI has mentioned that the assessee is appointed as H&T Contractor for handling of foodgrains at Turbhe/Kalyan/Bhivandi Goods Shed and storage at Bhivandi Depot and transportation of stock from all the above goods shed from Bhivandi Depot and vice versa. The AO gave a thoughtful consideration to the nature of business of the assessee and also to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akes etc. All these activities are carried out by the labourers of the contractor as per the advice of the QC staff. An opportunity to cross examine Shri Sugriv Sable was also given to the assessee. On cross examination, the cross examiner asked whether the space have been given as per tender contract for storage of 10,000 M.T. of food grains by FCI to the assessee to which Shri Sugriv Sable replied the storage area of 10,000 M.T. is the area available in the godown of FCI for the purpose of storage of food grains. The H&T contractor is allowed to use these spaces for storage purposes. On re-examination, the AO sought clarification relating to the ownership of the space for storing 10,000 M.T. of food grains. The deponent replied that the space belongs to FCI. The AO further questioned the deponent to verify when the storage space belong to FCI and the custody of food grains are also with the depot Manager of FCI then how comes storage could be done by the H&T contractor, to which the deponent replied since the entire stock of food grains is to be handled by the contractor from the time the food grains emphasizes in the depot and the time till they are liquidated therefore it was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the assessee is eligible for deduction u/s. 80IB(11A) of the Act and accordingly directed the AO to allow the claim of the assessee made u/s. 80IB (11A) of the Act. 11. The Revenue is aggrieved by this finding of the Ld. CIT(A) and is in appeal before us. 12. The Ld. Departmental Representative strongly supported the findings of the AO. Per contra, the Ld. Counsel for the assessee reiterated that the assessee has fulfilled all the conditions making him eligible for claim of deduction. 13. We have carefully heard the rival submissions and perused the orders of lower authorities. The whole dispute revolves around the claim of the assessee u/s. 80IB(11A) of the Act. Let us first examine the provisions of Sec. 80IB(11A) of the Act. Sec. 80IB (11A)...... The amount of deduction in a case of an undertaking deriving profit from the business of processing, preservation and packaging of fruits or vegetables or meat and meat products or poultry or marine or dairy products or] from] the integrated business of handling, storage and transportation of foodgrains, shall be hundred per cent of the profits and gains derived from such undertaking for five assessment years beginning with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain losses. The Bill proposes to encourage building of storage capacities, by providing that any undertaking engaged in integrated bulk handling, storage and transportation would be allowed hundred per cent deduction for the first five years and thirty per cent deduction for the next five years." Policy and its implementation :- The entire scheme covered by Sec. 80-IB(11A) relates to services in connection with preservation of food grains promoted by the Government of India under TFC-14/99-Volume III, dt. 4th July, 2000 following the national policy in respect of handling, storage and transportation of food grains. It relates to both construction contract and the preservation contracts arising out of a scheme sponsored by the Government of India administered by an agency of the State Government. It is part of the central scheme under the implementation of Food Corporation of India in pursuance of the national policy for handling, storage and transportation of food grains. Section 80-IB(11A) targets for relief for the business of processing preservation and packaging of fruits and vegetables as newly added from A.Y. 2005-06, while the relief has been available w.e.f. 1.4.2002 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of clause III(1). We do not find any substance in the submission of the Ld. Counsel to rely upon the meaning given to "storage" of this decision of the Hon'ble High Court of Orissa because in that case, the accused was found to carry goods which were prohibited by the law and on that note, the Court has held that even if a person is found carrying goods will be taken as involved in the storage for sale. However, the point which is to be noted here is that the Court has emphasized on "storage" in relation to "sale". Assuming yet denying that by carrying goods, the assessee was in the process of storage then such process should culminate into sale which is missing on the facts of the instant case. The assessee further relied upon the decision of the Hon'ble Gujarat High Court in the case of CIT v. Ahmedabad Maskati Cloth Dealers Co-Operative Warehouses Society Ltd. 162 ITR 142 wherein the Hon'ble Gujarat High Court had an occasion to consider "words "godowns or warehouses" and their dictionary meaning. In that case, the assessee claimed exemption u/s. 80P(2)(e) on the pretext that rental income received by it on letting out of shop amounted to rental income received fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the FCI which means that the assessee is using the existing infrastructure of the State whereas the main purpose of bringing this provision is construction of godowns specifically for stocking food grains for greater efficiency in the grain management system and minimize post harvest foodgrain losses. The assessee has not done anything towards these facilities. If we look at tender by which the assessee has been awarded this contract, the tender is issued with the following head note: "Invitation to tender and instructions to the tenderers for appointment of handling and transport contractor at FSD. Bhuiwandi with handling of foodgrains at Turbhe goods shed/Bhiwandi/Kalyan goods shed and transportation from Turbhe Bhiwandi goods shed and Kalyan goods shed to Bhiwandi Depot and Vice versa." Even the tender participated by the assessee show that the assessee has been awarded the contract for handling and transportation of food grains to the places mentioned therein. The contention of the assessee that Sec. 80IB being a Benevolent provision liberal construction should be applied cannot be accepted because beneficial interpretation applies only where two views are reasonably po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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