IN INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI BEFORE SHRI PAWAN SINGH , JM & SHRI M.BALAGANESH, AM ITA No.4228/Mum/2016 (Assessment Year 2010-11) ITA No.4229/Mum/2016 (Assessment Year 2008-09) ITA No.4243/Mum/2016 (Assessment Year 2011-12) ITA No.4239/Mum/2016 (Assessment Year 2007-08) & ITA No.4244/Mum/2016 (Assessment Year 2012-13) DCIT, Cent. Cir-6(4) Vs. M/s. International Cargo R.No.1925, 19th Floor Terminals and Air India Building Infrastructure P. Ltd Nariman Point (Formerly known as United Mumbai- 400 021 Liner Agencies of India P. Ltd.) Unit No.801, Godrej Coliseum, C-Wing, Off. Somaiya Hospital Road Sion, Mumbai 400 022 PAN/GIR No.AAACU5182C (Appellant) (Respondent) ITA No.4109/Mum/2016 (Assessment Year 2009-10) ITA No.4083/Mum/2016 (Assessment Year 2010-11) ITA No.4084/Mum/2016 2 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. (Assessment Year 2011-12) ITA No.4085/Mum/2016 (Assessment Year 2012-13) & ITA No.4142/Mum/2016 (Assessment Year: 2008-09) M/s. International Cargo Vs. DCIT, Cent. Cir-6(4) Terminals and R.No.1925, 19th Floor Infrastructure P. Ltd Air India Building (Formerly known as Nariman Point United Liner Agencies of Mumbai- 400 021 India P. Ltd.) Unit No.801, Godrej Coliseum, C- Wing, Off. Somaiya Hospital Road Sion, Mumbai 400 022 PAN/GIR No.AAACU5182C (Appellant) .. (Respondent) Revenue by Shri Santanu Kumar Saikia Assessee by Shri Y.P. Trivedi & Ms. Usha Dalal Date of Hearing 11/06/2019 Date of Pronouncement 21/08/2019 / O R D E R PER BENCH: 3 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. ITA No.4228/Mum/2016 (A.Y. 2010-11) Revenue appeal This appeal in ITA No.4228/Mum/2016 for A.Y.2010-11 arises out of order by ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-137/14-15 (New No.CIT(A)- 54/ACCC-39/IT-75/14-15) dated 21/03/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3) r.w.s. 153A of Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by ld. Asst. Commissioner of Income Tax, Central Circle 39, Mumbai (hereinafter referred to as ld. AO). ITA No.4229/Mum/2016 (A.Y.2008 -09) Revenue Appeal This appeal in ITA No.4229/Mum/2016 for A.Y.2008-09 arises out of order by ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-135/14-15 (New No.CIT(A)-54/ACCC- 39/IT-79/14-15) dated 21/03/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3) r.w.s. 153A of Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by ld. Asst. Commissioner of Income Tax, Central Circle 39, Mumbai (hereinafter referred to as ld. AO). ITA No.4243/Mum/2016 (A.Y.2011-12) Revenue Appeal This appeal in ITA No.4243/Mum/2016 for A.Y.2011-12 arises out of order by ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-138/14-15 (New No.CIT(A)-54/ACCC- 39/IT-76/14-15) dated 21/03/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3) r.w.s. 153A of Income Tax Act, 1961 4 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. (hereinafter referred to as Act) dated 07/03/2014 by ld. Asst. Commissioner of Income Tax, Central Circle 39, Mumbai (hereinafter referred to as ld. AO). ITA No.4239/Mum/2016 (A.Y.2007-08) Revenue Appeal This appeal in ITA No.4239/Mum/2016 for A.Y.2007-08 arises out of order by ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-134/14-15 (New No.CIT(A)-54/ACCC- 39/IT-80/14-15) dated 21/03/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3) r.w.s. 153A of Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by ld. Asst. Commissioner of Income Tax, Central Circle 39, Mumbai (hereinafter referred to as ld. AO). ITA No.4244/Mum/2016 (A.Y.2012-13) Revenue Appeal This appeal in ITA No.4244/Mum/2016 for A.Y.2012-13 arises out of order by ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-139/14-15 (New No.CIT(A)-54/ACCC- 39/IT-77/14-15) dated 21/03/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3) of Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by ld. Asst. Commissioner of Income Tax, Central Circle 39, Mumbai (hereinafter referred to as ld. AO). ITA No.4109/Mum/2016 (A.Y.2009-10) Assessee Appeal This appeal in ITA No.4109/Mum/2016 for A.Y.2009-10 arises out of order by ld. Commissioner of Income Tax (Appeals)-54, Mumbai in 5 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. appeal No.CIT(A)-41/ACCC-39/IT-136/14-15 (New No.CIT(A)-54/ACCC- 39/IT-78/14-15) dated 21/03/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3) r.w.s. 153A of Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by ld. Asst. Commissioner of Income Tax, Central Circle 39, Mumbai (hereinafter referred to as ld. AO). ITA No.4083/Mum/2016 (A.Y.2010-11) Assessee Appeal This appeal in ITA No.4083/Mum/2016 for A.Y.2010-11 arises out of order by ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-137/14-15 (New No.CIT(A)-54/ACCC- 39/IT-75/14-15) dated 21/03/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3) r.w.s. 153A of Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by ld. Asst. Commissioner of Income Tax, Central Circle 39, Mumbai (hereinafter referred to as ld. AO). ITA No.4084/Mum/2016 (A.Y.2011-12) Assessee Appeal This appeal in ITA No.4084/Mum/2016 for A.Y.2011-12 arises out of order by ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-138/14-15 (New No.CIT(A)-54/ACCC- 39/IT-76/14-15) dated 21/03/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3) r.w.s. 153A of Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by ld. Asst. Commissioner of Income Tax, Central Circle 39, Mumbai (hereinafter referred to as ld. AO). ITA No.4085/Mum/2016 (A.Y.2012-13) Assessee Appeal 6 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. This appeal in ITA No.4085/Mum/2016 for A.Y.2012-13 arises out of order by ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-139/14-15 (New No.CIT(A)-54/ACCC- 39/IT-77/14-15) dated 21/03/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3) of Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by ld. Asst. Commissioner of Income Tax, Central Circle 39, Mumbai (hereinafter referred to as ld. AO). ITA No.4142/Mum/2016 (A.Y.2008-09) Assessee Appeal This appeal in ITA No.4142/Mum/2016 for A.Y.2008-09 arises out of order by ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-41/ACCC-39/IT-135/14-15 (New No.CIT(A)-54/ACCC- 39/IT-79/14-15) dated 21/03/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3) r.w.s.153A of Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/03/2014 by ld. Asst. Commissioner of Income Tax, Central Circle 39, Mumbai (hereinafter referred to as ld. AO). Since identical issues are involved in these appeals, they were heard together and are being disposed off by this consolidate order, for sake of convenience. Revenue Appeals ( A.Yrs. 2007-08, 2008-09, 2010-11, 2011-12 & 2012-13) 7 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. As identical issues are involved in all these appeals they are taken up together and disposed off by this common order for sake of convenience. 2. only issue to be decided in this appeal is with regard to deletion of disallowance of deduction u/s.80IA (4) of Act by ld. CIT(A). We find issue involved is whether income of container freight station is eligible for deduction u/s.80IA (4) of Act. Both parties mutually agreed at time of hearing that this issue is covered by decision of Hon ble Supreme Court in case of CIT vs. Container Corporation of India Ltd., reported in 404 ITR 397 (SC) wherein it was held that container freight station is eligible for deduction u/s. 80IA (4) of Act. Since facts recorded by ld. CIT(A) in his order are not in dispute before us, respectfully following aforesaid Supreme Court decision which is also not disputed by parties before us, grounds raised by revenue for A.Y.2007-08 are dismissed. 2.1. In view of aforesaid decision, revenue appeals for A.Yrs.2007-08, 2008-09, 2010-11, 2011-12 and 2012-13 are dismissed. ITA No.4142/Mum/2016 (A.Y.2008-09) Assessee Appeal 3. ground No. I & II raised by assessee was stated to be not pressed by ld. AR at time of hearing. same is reckoned as statement made from Bar and accordingly grounds I & II are dismissed as not pressed. 4. Ground No.1 raised by assessee is with regard to disallowance made u/s.14A of Act. 8 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. 4.1. We have heard rival submissions. We find that ld. AO had made disallowance u/s.14A of Act read with third limb of rule 8D(2) of rules in sum of Rs.28,36,146. It is not in dispute that assessee has not claimed any exempt income during year under consideration. Despite this fact assessee had voluntarily disallowed sum of Rs.40,000/- on adhoc basis in return of income. We find now issue is well settled that when there is no exempt income claimed by assessee, disallowance u/s.14A of Act would not come into operation. Accordingly, we direct ld. AO to delete disallowance made u/s.14A in sum of Rs.28,36,146/-. Accordingly, ground No.1 raised by assessee is allowed. 5. ground Nos.2,3 and 4 raised by assessee was with regard to disallowance of staff welfare expenses in sum of Rs.3 lakhs, entertainment expenses in sum of Rs.2 lakhs, miscellaneous expenses in sum of Rs.2 lakhs made by ld. AO passed in original assessment completed u/s.143(3) of Act dated 24/05/2010. 5.1. We have heard rival submissions. We find that these disallowances of expenditure in total sum of Rs.7 lakhs were originally made by ld. AO in original assessment completed u/s.143(3) of Act dated 24/05/2010. assessment which is in challenge before us is assessment framed u/s.143(3) r.w.s. 153A of Act dated 07/03/2014 pursuant to search carried out in case of J M Baxi Group on 20/03/2012. At time of hearing, no arguments were advanced by ld. AR with regard to these disallowances and accordingly, same are dismissed. 9 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. 6. In result, appeal of assessee for A.Y.2008-09 in ITA No.4142/Mum/2016 is partly allowed. ITA No.4109/Mum/2016 (A.Y.2009-10) Assessee Appeal 7. ground No. I & II raised by assessee was stated to be not pressed by ld. AR at time of hearing. same is reckoned as statement made from Bar and accordingly grounds I & II are dismissed as not pressed. 8. ground No.III raised by assessee is with regard to action of ld. CIT(A) confirming disallowance of deduction u/s.80IA of Act by holding that rental income of Rs.22,11,070/- and interest on FDR of Rs.23,56,455/- as not derived from industrial undertaking. 8.1. We have heard rival submissions. We find that interest income of FDR s were not made with inextricable link with business of assessee and ld. AR fairly stated that same is not eligible for deduction u/s.80IA of Act. Accordingly, we uphold action of ld. CIT(A) in this regard. 8.2. With regard to rental income of Rs.22,11,070, ld. AR argued that same only represents demurrage charges and we find that ld. AR filed note in this regard as under:- Note on Rent Income. Assessment Years : 2008-09 to 2013-14. appellant carries business of providing containers freight services. This is given recognition as inland port. This facilitates exporters and importers to use services of these inland ports and save them troubles of rushing to either Mumbai or to any other port near sea. 10 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. When exporter or importer brings goods to be exported or imported to our inland port, their responsibility ends and our facilities thereafter send goods to ports. Sometimes goods remain in our ports when importer or exporter finds it unprofitable to remove goods. If goods would have remained at regular ports then either importer or exporter might have to pay demurrage. Our inland port charges such demurrage to importer or exporter and if goods are not removed within reasonable time then they are auctioned by us. We therefore submit that rent so named are only demurrage charges or auction charges arising from our activities of carrying on container freight services and therefore same are deductible under section 80IA of Income Tax Act, 1961. 8.3. ld. AR fairly admitted that let this fact be examined by ld. AO and issue be decided accordingly. Per contra, ld. DR vehemently objected to setting aside of this issue to file of ld. AO as assessee itself had classified receipt as rental income. We find that assessee had given detailed note supra explaining nature of transaction which requires to be examined. It is well settled that substance of transaction would always prevail over its form. Accordingly, we deem it fit and appropriate, in interest of justice and fair play, to remand this issue to file of ld. AO for denovo adjudication. Accordingly, ground No. III raised by assessee is partly allowed for statistical purposes. 9. In result, appeal of assessee for A.Y.2009-10 in ITA No.4109/Mum/2016 is partly allowed for statistical purposes. 11 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. ITA No.4083/Mum/2016 (A.Y.2010-11) Assessee Appeal 10. ground No. I & II raised by assessee was stated to be not pressed by ld. AR at time of hearing. same is reckoned as statement made from Bar and accordingly grounds I & II are dismissed as not pressed. 11. ground No.1 raised by assessee is similar to ground No.1 raised by assessee for A.Y.2009-10 and decision rendered thereon would apply with equal force for this year also. Accordingly, ground No.1 is partly allowed for statistical purposes. 12. ground No.2 is with regard to disallowance made u/s.14A of Act. This ground is also similar to ground No.1 raised by assessee for A.Y.2008-09 supra and decision rendered thereon would apply with equal force herein. Accordingly, ground No.2 raised for A.Y.2010-11 is allowed. 13. ground Nos.3,4,5 & 6 were with regard to adhoc disallowance of expenses made by ld. AO towards staff welfare expenses, entertainment expenses and miscellaneous expenses. We find that no arguments were advanced by ld. AR at time of hearing and accordingly, same are treated as dismissed. 14. In result, appeal of assessee for A.Y.2010-11 is partly allowed for statistical purposes. 12 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. ITA No.4084/Mum/2016 (A.Y.2011-12) Assessee Appeal 15 ground No. I & II raised by assessee was stated to be not pressed by ld. AR at time of hearing. same is reckoned as statement made from Bar and accordingly grounds I & II are dismissed as not pressed. 16. ground No.1 raised by assessee is similar to ground No.1 raised by assessee for A.Y.2009-10 and decision rendered thereon would apply with equal force for this year also. Accordingly, ground No.1 is partly allowed for statistical purposes. 17. ground No.2 is with regard to disallowance made u/s.14A of Act. This ground is also similar to ground No.1 raised by assessee for A.Y.2008-09 supra and decision rendered thereon would apply with equal force herein. Accordingly, ground No.2 raised for A.Y.2010-11 is allowed. 18. ground Nos.3,4,5 & 6 were with regard to adhoc disallowance of expenses made by ld. AO towards staff welfare expenses, entertainment expenses and miscellaneous expenses. We find that no arguments were advanced by ld. AR at time of hearing and accordingly, same are treated as dismissed. 19. In result, appeal of assessee for A.Y.2011-12 is partly allowed for statistical purposes. 13 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. ITA No.4085/Mum/2016 (A.Y.2012-13) Assessee Appeal 20. ground No.1 raised by assessee is similar to ground No.1 raised by assessee for A.Y.2009-10 and decision rendered thereon would apply with equal force for this year also. Accordingly, ground No.1 is partly allowed for statistical purposes. 21. ground No.2 is with regard to disallowance made u/s.14A of Act. This ground is also similar to ground No.1 raised by assessee for A.Y.2008-09 supra and decision rendered thereon would apply with equal force herein. Accordingly, ground No.2 raised for A.Y.2010-11 is allowed. 22. ground Nos.3,4,5 & 6 were with regard to adhoc disallowance of expenses made by ld. AO towards staff welfare expenses, entertainment expenses and miscellaneous expenses. We find that no arguments were advanced by ld. AR at time of hearing and accordingly, same are treated as dismissed. 23. In result, appeal of assessee for A.Y.2012-13 is partly allowed for statistical purposes. TO SUM UP Sr. ITA No. AY Appeal by Result No. 1. 4228/Mum/2016 A.Y. 2010-11 Revenue Dismissed appeal 2. 4229/Mum/2016 A.Y.2008-09 Revenue Dismissed Appeal 3. 4243/Mum/2016 A.Y.2011-12 Revenue Dismissed Appeal 14 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. 4. 4239/Mum/2016 A.Y.2007-08 Revenue Dismissed Appeal 5. A.Y.2012-13 Revenue Dismissed 4244/Mum/2016 Appeal 6. 4109/Mum/2016 A.Y.2009-10 Assessee Partly Allowed for Appeal Statistical Purposes 7. 4083/Mum/2016 A.Y.2010-11 Assessee Partly Allowed for Appeal Statistical purposes 8. 4084/Mum/2016 A.Y.2011-12 Assessee Partly Allowed for Appeal Statistical purposes 9. 4085/Mum/2016 A.Y.2012-13 Assessee Partly Allowed for Appeal Statistical purposes 10. 4142/Mum/2016 A.Y.2008-09 Assessee Partly Allowed for Appeal Statistical purposes Order pronounced in open court on this 21/08/2019 Sd/- Sd/- (PAWAN SINGH) (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 21/08/2019 KARUNA, sr.ps 15 ITA No.4228/Mum/2016 and other appeals M/s. International Cargo Terminals and Infrastructure P. Ltd. Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, (Asstt. Registrar) ITAT, Mumbai DCIT, Cent. Cir-6(4), Mumbai v. International Cargo Terminals and Infrastructure P. Ltd (Formerly known as United Liner Agencies of India P. Ltd.)