TMI Blog2017 (6) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... find there is no pre-condition for claiming the deduction that there has to be any completion certificate. Admittedly, the income of assessee has shown the unit located at Gandhidham in its profit and loss account. Thus, in our considered view, the deduction u/s. 80IB(11A) of the Act cannot be denied merely on the ground that completion certificate was furnished at the fag-end of financial year. It is also pertinent to note that the inspector has given the report by stating that the warehouse was rented out to M/s Rishi Shipping Limited since long which proves that the commercial activity started before the completion certificated obtained by the assessee. Other reason that the requirement of provision of Sec. 80IB(11A) of the Act that the assessee must be engaged in the integrated facilities providing for handling, transportation and storage charges. In this regard, we find that the assessee has not produced any supporting documents other than list of clients which are placed in the record. On perusal of that list, we find that it is internal list maintained by assessee which was duly furnished before Authorities Below. However, in our considered view, the list cannot be a conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue is directed against the order of Commissioner of Income Tax (Appeals)-I, Kolkata dated 09.07.2010. Assessment was framed by DCIT, Circle-2, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide her order dated 31.12.2009 for assessment year 2007-08. Md. Ghayas Uddin, Ld. Departmental Representative represented on behalf of Revenue and Smt. Arti Debnath, Ld. Authorized Representative appeared on behalf of assessee. 2. At the outset we find that the issues raised by the Revenue in ground no. 1 to 3 are inter-connected, therefore we decided to adjudicate the same together for the sake of convenience. 2.1 The issues raised by Revenue in its grounds no. 1 to 3 of appeal are that Ld. CIT(A) erred in directing the Assessing Officer for re-verification of addition of ₹1,09,11,962/- on account of rent receipts shown as business income as well denying the benefit u/s 80-IB(11A) of the Act for ₹ 1,25,22,588/- only. 3. Facts in brief are that assessee is a limited company and engaged in business of clearing and forwarding agents. The assessee is also engaged in the business of integrated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) The completion certificate in respect of warehouse No. 13 and 8 by the Deputy Secretary (P) Kandla Port Trust were given at the fagend of the relevant previous year i.e. 12.3.2007 and in the beginning of next financial year i.e. 7.4.2007. The year of dispute is financial year 2006-07. Therefore there is no question of utilization of the warehouse for the purpose of the food-grains. Thus the assessee is not entitled for deduction u/s. 80IB(11A) of the Act. b) The deduction u/s 80IB(11A) is available where the assessee is engaged in the business of providing integrated facilities for handling, transportation and storage of food-grains. No copy of agreement with M/s Rishi Shipping Ltd. was provided before having the report of the Inspector. Therefore, it is transpired that the assessee was not engaged in the integrated facilities as envisaged. Thus, the AO worked out the income from the unit located at Gandhidham as detailed under:- 1) Gross received from Gandhidham of ₹198,09,398/- Less : relevant expense in respect of Gandhidham unit 1. Electricity charges ₹ 23,879.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial statement and has been duly offered to tax in its income tax return. Therefore, further addition of ₹109,11,962/- will lead to double taxation. Submission in respect of disallowance of deduction for ₹125,22,588/- u/s. 80IB(11A) of the Act. In this regard, the submission of assessee can be summarized as under:- (i) There is no requirement u/s. 80IB(11A) of the Act that for claiming the deduction a completion certificate has to be obtained from the concerned authority. In fact major construction was completed in the beginning of financial year and accordingly it was let out to M/s Rishi Shipping Ltd. in the month of May, 2006. (ii) The observation of the AO that the agreement with M/s Rishi Shipping Ltd., was not revealed prior to the inquiry conducted by the Inspector at Gandhidham is not true. It is because in the course of assessment various details/ statements were submitted before the AO wherein the name of M/s Rishi Shipping Ltd was very much mentioned. Therefore, the allegation of the AO is based on its own surmise and conjecture. (iii) It was a clearly mentioned in the report of Inspector that the warehouse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing officer based on the report of inspector, ha stated that the completion certificate for the warehouses at Kandla Port Trust area we obtained by the assessee on 12.03.2007 07.04.2007. Further, the AO contended that the assessee had never came up with the information on its engagement with M/s Rishi Shipping Co. prior to the revealing of the results of the enquiry by the inspector at Gandhidham. Hence, there was no occupation, thus no handling, transportation and storage operation in FY 2006-07. Hence, the total claim of deduction u/s. 80IB(11A) amounting to ₹ 1,25,22,588/- was disallowed. 3. The appellant on the contrary has challenged this hypothesis of the AO that completion certificate is not the determining factor for claiming deduction u/s 80IB(11A) of the Act. In other words, it is not a pre-requisite for claiming a deduction u/s. 80IB. Te appellant submitted that they had submitted a list of Storage, Handling transportation charges for the FY 2006-07 on 03.12.2009, which contains the name of M/s Rishi Shipping on various dates. Further, a per the investigation report only, the plot at Kandla Port was given to Rishi Shipping Limited since long. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the integrated business of handling, transportation and storage otherwise the deduction u/s. 80IB(11A) of the Act is not available. He further submitted that there is no iota of evidence suggesting that assessee is engaged in the integrated facilities. The assessee in the instant case has let out the property to M/s Rishi Shipping Ltd. on rental basis and it never provided any service as envisaged under the provision of Sec. 80IB(11A) of the Act. Ld. DR also submitted that it is nowhere clear from the agreement between the assessee and M/s Rishi Shipping Ltd. suggesting that the integrated services were provided by the assessee. Ld. DR also submitted that there is no evidence provided by the assessee at the time of assessment proceedings suggesting that he is providing integrated services as envisaged u/s. 80IB(11A) of the Act as well as there is no evidence that food-grains was stored by the assessee in its warehouse. Ld. DR vehemently relied on the order of AO. On the other hand, Ld. AR for the assessee filed two sets of paper book which is running pages from 1 to 41 and 1 to 89 respectively. He submitted that the construction activity of the warehouse was duly complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inspector has given the report by stating that the warehouse was rented out to M/s Rishi Shipping Limited since long which proves that the commercial activity started before the completion certificated obtained by the assessee. 7.1 Now coming to the other reason that the requirement of provision of Sec. 80IB(11A) of the Act that the assessee must be engaged in the integrated facilities providing for handling, transportation and storage charges. In this regard, we find that the assessee has not produced any supporting documents other than list of clients which are placed in the record. On perusal of that list, we find that it is internal list maintained by assessee which was duly furnished before Authorities Below. However, in our considered view, the list cannot be a conclusive evidence that the assessee is engaged in providing integrated service. However, we disagree with the contention of Ld. DR that there was a storage of DAP (fertilizer) in the warehouse maintained by assessee. it is because, the AO observed that there was a storage of DAP (fertilizer) on the basis of report submitted by Inspector which was furnished in the year 2009-10 and there is no infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15JB of the Income tax Act, 1961. The AO submitted that in calculation of MAT u/s. 115JB Deferred tax and Profit transferred to Debt Redemption Reserve is not allowance as per the Act. The appellant during the appellate proceeding submitted that transfer to debt redemption reserve account is meant to meet future liability arising out of the redemption of debts. This debt redemption reserve is called reserve only namesake. It is in fact, a provision to meet a future liability. The appellant also placed reliance on the decision of the Hon. Calcutta Tribunal in the case of IOL Ltd. 81 TTJ 525 (Cal)which hold that Debenture Redemption reserve is neither a Reserve nor amount set aside to meet unascertained liabilities. Based on the submission made and following the above decision, the disallowance of debt redemption reserves while calculating the profit u/s.115JB is deleted. The Revenue, being aggrieved, is in appeal before us on the following ground:- 4. That on facts and circumstances of the case the Ld. CIT(A) erred in deleting the disallowance of debt redemption reserve in calculating the profit u/s 115JB. 12. Before ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
