TMI Blog2012 (8) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... -09. The grounds of appeal raised by the assessee read as under: 1.1 The learned Commissioner of Income tax (Appeals) - 1, Thane [ ld. CIT (A) ] erred in confirming the action of the Assessing Officer ( the A.O. ) in denying the deduction u/s. 80 IA (4) of the Act, amounting to ₹ 21,07,13,675/-. 1.2 While doing so, the id. CIT (A) erred in (i) Failing to appreciate that the Appellant was denied effective, proper and fair opportunity of being heard by the A.O. (ii) Basing his finding on surmises, conjecture and suspicion; and (iii) Taking into account extraneous and irrelevant considerations while ignoring the material considerations. 1.3 It is submitted that in the facts and the circumstances of the case, and in law, no such disallowance was called for. 2. The only issue raised in the present appeal is regarding denial of benefit of deduction under section 80 IA(4) of the Income Tax Act,1961(the Act). The assessee company had claimed deduction under section 80IA(4) of the Act by filing audit Report in Form 10 CCB as per Rule 18 BBB of IT rules, 1962. It was claimed that assessee is a Port , therefore, entitled to get deduction under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion from the date of issue of withdrawal of letter (i.e. JNP/CM/2007/3024 dated 05-10-2007) to the assessee company. In view of these facts the AO denied the benefit of section 80 IA(4) to the assessee as the assessee did not fulfill the following conditions: (i) The structure built by the assessee company is not the infrastructure facility as defined in the clause (d) of Explanation to section 80IA(4) of the I.T. Act, 1961. AS The said structure of the assessee company does not form part of the Part - JNPT. (iii) The assessee company has not entered into an agreement with the Central Govt for a State Govt or a local authority or any other statutory body for (i) developing (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility. 2.2 In the process the AO rejected all the contentions of the assessee in which it was contended that the certificate issued by JNPT earlier still hold the filed and assessee is not entitled for deduction under section 80IA(4) of the Act and the final observation of the AO to reject the claim of the assessee regarding non fulfillment of conditions are as under: (i) The assessee com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d both the parties and their contentions have carefully been considered. We have also carefully gone through the aforementioned decision of the Special Bench in the case of All Cargo Global Logistics Ltd. Others (supra) and we find that on identical facts, except difference in the dates it was held by the Special Bench that the assessee is an inland port hence, eligible for deduction under section 80 IA(4) of the Act. For the sake of completeness we reproduce relevant portion of the Special Bench order. 60. The second question before us is-whether, on the facts and In the circumstances of the case, the learned CIT(A) was justified in upholding the disallowance of deduction under s. 80-IA(4) of the Act on merits? 61. The facts In the case of All Cargo Global Logistics Ltd. are that the assessee commenced CFS activities on 7th April, 2003. In this connection a letter has been received from the Commr. of Custom (Import), bearing No. 3 of 2003, dt. 28th Feb., 2003, classifying the area of 3,282 sq. mtrs. as customs area for the purpose of storage, stuffing/destuffing and clearance of export/import cargo. Subsequently, the assessee has been certifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power to notify Infrastructure facility for the purpose of this section was taken away from the CBDT w.e.f. 1st April, 2002. The Court noted that wherever the word port is used, it carries with it maritime connection or connotation. It is for this reason that the section separately refers to airport as it does not have a maritime connection. The customs clearance takes place both at the airport and port. The ICDs are landlocked and V Is nobody s case that they are located in such a place where ships or. vessels have V direct access. The goods which are brought in or removed from the ICDs are brought or taken either by railway wagons or by container trucks, as the case may be. Finally, it has been held that although ICD may not be a port. but it is an Inland port. The relevant portion of the decision is reproduced below: 19. The Tribunal erred in holding that because of the change made by the Finance Act, 2001 w.e.f. 1st April, 2002 by dropping the power of the CBDT to notify any other public facility of similar nature for the purpose of s. 80-IA of the Act, the ICD cannot be considered as Inland port. The error committed by the Tribunal is to overlook th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it being In the nature of exemption is to be considered strictly and against the subject but once the ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction. In the light of this decision, he dealt with the claim of the assessee under s. 80- (IA). It is submitted that in Board clarification dt. 6th Jan., 2011, in which circulars dt. 16th .Dec., 2005 and 23rd June, 2000 were considered, It has been clarified that ICDs and CFSs are not ports located on any Inland waterway, river or canal and therefore they cannot be classified as inland ports for the purpose of s. 80-IA(4). It is further submitted that the certificate Issued by Jawahar Lal Nehru Port Trust has been withdrawn by the port trust. It is also submitted that Inland Waterways Authority of India Act. 1985, provides the definition of the term infrastructure facilities , in its cl.. (f), as the structures such as docks, wharves, Jetties, stages. locks; buoys. inland ports, cargo handling equipments, road and rail access and cargo storage spaces and states that the expression infrastructure facilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g CBEC under the relevant Acts do not lay guidelines under the IT Act and that the matter has to be decided under the IT Act Independently. For doing so, initially a strict Interpretation has to be placed on the words inland port to examine that the assessee is entitled to the deduction. CBDT has furnished opinion that ICDs and CFSs are not entitled to such deduction as they do not constitute Inland ports. Other Acts as well as study report lead to the conclusion that a port can be said to be an Inland port only if it has an access to the sea via a waterway. 66. We find that the solitary decision in this case by any High Court Is In the case of Container Corporation Of India Ltd. (supra). In this case it has been held that an ICD is not a port but It Is an inland port. The case of CFS is similarly situated In the sense that both carry out similar functions. i.e.. warehousing, customs clearance and transport of goods from Its location to the seaports and vice versa by railway or by trucks in containers. Thus, the issue is no longer res integra. Respectfully following this decision, it Is held that a CFS is an Inland port whose Income is entitled to deduction unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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