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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 ..... e for such deduction. B. Whether the order of the Ld. ITAT, Kolkata Bench is perverse to the extent in observing that the instant case is covered under Hon'ble High Court of Gujarat's order in the case of CIT Vs. Ranjit Projects Private Limited [2018] 408 ITR 274 despite the fact that the circumstances of both the cases are entirely different as in the instant case the assessee never had an agreement either with the Government or even with the entity having such an agreement with the Government wherein in the case of Ranjit Projects Private Limited, the assessee had an agreement directly with a wholly Government owned company incorporated pursuant to State Government's resolution. 2. We have heard Mr. Tilak Mitra, assisted by Mr. Soumen Bhattacharjee, learned advocates appearing for the appellant and Mr. J.P. Khaitan, learned Senior Advocate assisted by Ms. Arati Agarwal and Ms. Rosy Banerjee, learned advocates appearing for the respondent. 3. Since the facts are identical in both the appeals and the substantial questions of law raised by the revenue is also identical, we refer to the facts for the assessment year 2015-2016 which would cover the other assessment year as well. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The assessee moved the Dispute Resolution Panel (DRP) contending that the assessing officer erred in not considering that the assessee had produced the Port certificate granted by the specified authority which certified that the infrastructural facility developed by the assessee is an integral part of the port and the port certificate in itself would amount to agreement with Government thereby satisfying the condition prescribed in clause (b) of Section 80IA (4)(1). Further it was contended that the assessing officer erred in denying the benefit under Section 80IA (4) by observing that the assessee does not have any agreement which specified authority without appreciating the facts that the agreement entered into by the assessee with KSPL was as per the parent concession agreement between KSPL and AP and with the knowledge of the Government of AP and therefore the assessee cannot be denied deduction under Section 80IA (4). 7. The assessee further contended that the assessing officer erred in denying the benefit in terms of the proviso to Section 80IA (4) (i) on the ground that there was no condition in the agreement for retransfer of the assets back to the Government of Andhra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Coordinate bench of the tribunal. 9. Thus, the short question which will fall for consideration is whether the assessee satisfies the conditions prescribed in clause (b) of Section 80IA (4). 10. Clause (b) of Section 80IA (4) (i) would apply to any enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility which fulfils all the following conditions namely, it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility. 11. In the explanation under the said provision, the "infrastructural facility" would cannote a port, airport, inland water base, inland port or navigational channel in the sea as per clause (d) in the explanation. It is not in dispute that the assessee fulfils the condition in clause (a) of Section 80IA (4) (i) as it is a company registered in India. Thus, we are required to consider as to what are the terms and conditions in the agreements which have been ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Income Tax Versus Ranjit Projects Private Limited (2018) 408 ITR 274, it was held that rigid interpretation of the provision as canvassed by the revenue before the said court (as well as before us) would only result in the assessee's involved in genuine infrastructure development projects for and on behalf of the Government or local authorities would be denied the deduction merely on the ground that the State Government had created a nodal agency for working out of the finer details and nitty-gritty of such infrastructure developments. That the purpose of creating such nodal agencies as well as legislative intent of granting deduction to the assessee engaged in developing maintaining, or operating any infrastructure projects for Central Government or State Government or local statutory authority would frustrate. 14. The Hon'ble Supreme Court in Commissioner of Income Tax Versus Container Corporation of India Limited (2018) 404 ITR 397 (SC) explained the object and scope of Section 80IA of the Act by observing that with the purpose of boosting the country's infrastructure specially the transport infrastructure, Finance Act, 1995 which came into effect April 01, 1996 brought an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... frastructure facility which fulfills all the conditions, namely, it is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act, it has entered into an agreement with the Central Government or a local authority or any other statutory body for developing or operating and maintaining or developing, operating and maintaining a new infrastructure facility and it has started or starts operating and maintaining the infrastructure facility on or after 1st day of April, 1995. The explanation defines the infrastructure facility to mean, inter alia, a port, airport, inland waterway, inland port or navigational channel in the sea. The word "inland port" was always there in clause (d). What was there prior to its substitution by Finance Act of 2007 with effect from 1st April, 2008, were the words "or inland port". Now the word "or" is deleted, but the words are "inland port or navigational channel in the sea". Thus, an "inland port" was always within the contemplation of the Legislature and it is treated specifically as a infrastructural facility. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rictly. However, when an assessee is promised with a tax exemption for setting up an industry in the backward area as a term of the industrial policy, we have to read the implementing notifications in the context of the industrial policy. In such a case, the exemption notifications have to be read liberally keeping in mind the objects envisaged by the industrial policy and not in a strict sense as in the case of exemptions from tax liability under the taxing statute." 17. The Hon'ble Supreme Court took note of the Hon'ble Five Judges Bench of the Hon'ble Supreme Court in Commissioner of Customs Versus Dilip Kumar and Company (2018) 9 SCC 1. The Hon'ble Supreme Court after taking note of the ultimate conclusion arrived at in the case of Dilip Kumar and Company held as follows:- 26. It may be noticed that the five-Judge Bench judgment did not refer to the line of authority which made a distinction between exemption provisions generally and exemption provisions which have a beneficial purpose. We cannot agree with Shri Gupta's contention that sub silentio the line of judgments qua beneficial exemptions has been done away with by this five-Judge Beach. It is well settled that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entitled to subrogate all its right and obligations under the agreement in the form of an instrument and in favour of the said body corporate to which the Government of Andhra Pradesh consented. Further before granting the subrogation, the concessionaire was required to inform the Government of Andhra Pradesh in respect thereof and all necessary steps to be carried out by the parties to give effect to the subrogation within 30 days from the date of such information. 20. The agreement further states that after the subrogation, the new body corporate (SPC) shall be recognised by the Government of Andhra Pradesh for all legal and operational purposes and it was further agreed that ISPL shall cause to provide suitable required letter from the new body corporate (SPC) consenting to the arrangement and for smooth implementation and the SPC shall be successors to the rights, duties and obligations under the agreement. Thus, in terms of the above condition the SPC was created in the name of Cocinada Port Company Limited (CPCL) incorporated by ISPL who assigned all its rights, title benefits in the concession agreement to CPCL by assignment deed dated 02.04.1999. Subsequently the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the said infrastructural facility. The tribunal referred to the CBDT Circular No. 10 of 2005 dated 16.12.2005 whereby the CBDT relaxed the second condition prescribed under Section 80IA (4) thus leading to the only condition that is to obtain the certificate from the concerned authority that the infrastructural facility forms part of the port. In terms of the said condition, the assessee has obtained a certificate dated 11.08.2015 issued by the port authority of the Government of Andhra Pradesh certifying that the infrastructural facility developed for handling of coal through Mechanised Coal Handling System constructed and owned by the assessee are part of the infrastructural facility of the Kakinada deep water port which has been put to use from 13.10.2013. Though the second condition was relaxed by the CBDT Circular, the assessee had placed on record, a letter issued by KSPL which 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 obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hannel and the navigation area etc. The Government of Andhra Pradesh authorised ISPL to appoint its own nominee to discharge all functions of the port conservator but limited to the deep water port at Kakinada port and the nominee shall have among other powers the following:- 1 Power to make port rules/general port administration rules. 2 Power to make rules regarding navigation and shipping. 3. Power to give and enforce directions for certain specified purposes. 4. Power to cut warps & ropes and Power to Removal of obstructions within limits of DWP. 5. Power to Recover of expenses of removals. 6 Power to make rules regarding non-payment of dues, fines and recovery procedures including distraint and sale on refusal, etc 7. Power to take necessary action in respect of Fouling of government moorings. 8. Power to take necessary action in respect of Raising or removal or wreck impeding navigation within limits of DWP. 9. Power to board vessels and enter buildings. 10. Power to require/appoint crews to prevent or extinguish fire, pollution prevention/mitigationcontainment of damages due to pollution threats to damages etc. 11. Indemnity against act or def ..... X X X X Extracts X X X X X X X X Extracts X X X X
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