Per D.K. AGARWAL (JM). By these stay appl ications against the respective appeals, the assessee seeks to continue the order granting stay of outstanding demands ti l l the disposal of the appeals of the assessee company.
2. The undisputed brief facts of the case which have been discussed by the Tribunal in the f i rst stay petit ion No. 87/Mum/2010 to 92/Mum/2010 for A.Ys. 2004-05 to 2009-10 dated 27.8.2010 are reproduced as under:-
2. Brief ly stated facts of the case extracted from stay petit ion No.87/Mum/2010 arising out of ITA No.5059/Mum/2010 for Assessment Year 2004-05 are that there was a search and seizure act ion u/s.132(1) of the Income tax Act, 1961(the Act) on 26.4.2007 in the case of M/s. All Cargo Group of Companies, their directors and important employees. The assessee company is one of the group companies and was covered u/s.132(1) of the Act. In response to notice issued u/s.153A, the assessee f i led return declaring total income of Rs. 5,54,63,220/- including the additional income of Rs. 26,85,820/- and Rs..3,50,000/- being part of the general offer u/s.132(4) of the Act. It has been observed by the Assessing Off icer that the assessee along with i ts main business of NVOCC is also owning and operating Container Freight Station (CFS) in Nhava Sheva, Chennai and Mundra each and an Inland Container Depot (ICD) at Indore. A CFS/ICD is a customs bonded in-transit faci l i ty, equipped with container yard space, warehousing space, container handl ing equipment etc. It offers services for handling and temporary storage of import and export containers. The dif ference between a CFS and ICD is that a CFS is located at gateway ports while an ICD is located in the hinterland. CFS and ICD generate revenue from SA No.168 to 173/M/2011 container handling charges, transport charges (from port to and from ICD/CFS), ground rent, (for Import consignments) for the number of days the container remain in the yard, warehousing storage charges on consignment basis, auction and other service charges. Ground rent revenue forms the major part of the total revenue of any CFS/ICD. The assessee has been claiming deduction u/s.80IA on its income from CFS/ICD operations, considering them to be an extension of Port and therefore, fal l ing under the ambit of the term Inland Port. The ITAT, Delhi Bench B in i ts decision dated 27.02.2009 in the case of Container Corporation of India Ltd. vs. ACIT, ITA No.2851 & 3680/Del./2007, held that Container Freight Stations and ICDs are not entit led for deduction u/s.80IA(4). In view of the above mentioned decision, the assessee was asked to show cause as to why the 80IA(4) deduction claimed by the assessee for the Assessment Years 2004-05 to 2009-10 should not be disal lowed.
3. In reply the assessee vide its letter dated 21.12.2009 whi le relying on various CBDT Circulars, Notif ication and Letters issued by Ministry of Finance and the amendment made under the relevant provisions of the Act that the assessee developed CFS at Nhava Sheva for transportation of import and export cargo. The aforesaid CFS was recognised under Customs Area by Jawaharlal Nehru Port Customs House. The assessee was also appointed as a custodian of the said custom area. Therefore, the assessee is entit led to the deduction u/s.80IA(4) of the Act. In support the assessee also rel ied upon a catena of judgments. However, the Assessing Off icer relying on the decision of the Tribunal in Container Corporat ion of India Limited supra, since reported in 30 SOT 284(Del.) disal lowed the claim of deduction u/s.80IA(4) of ` 1,25,77,637/- on income from CFS/ICD activit ies and accordingly completed the assessment at an income of ` 6,80,40,857/- vide order dated 30.12.2009 passed u/s.143(3) r.w.s. 153A of the Act. On appeal before the ld. CIT(A), the assessee interal ia contended that (i) in the original assessment order passed u/s.143(3) deduction u/s.80IA(4) was al lowed, hence, i t is a change of opinion. (i i) CFS is covered within the definit ion of port which is included as one of the infrastructure faci l i ty under the original as well as amended defini t ion supported by various circulars and notif ications issued by the CBDT, and hence, the CFS undoubtedly act as a ful l f ledged custom station which is SA No.168 to 173/M/2011 nothing but a port. (i i i ) CFS/ICD should be treated a inland port and (iv) the decision in Container Corporation of India Limited supra, is distinguishable and not applicable to the facts of assessee's case. However, the ld. CIT(A) vide his common order dated 26.4.2010, in the absence of any other decision to support the assessee's stand, while relying on the decision of the Tribunal in Container Corporat ion of India Limited supra, confirmed the disallowance of deduction u/s.80IA and dismissed the appeals.
3. Against the order of the learned Commissioner of Income Tax (A), the assessee f i led appeals before the Tribunal and also f i led stay applications. In the f irst batch of stay applications, the Tribunal vide common order in SA Nos.87 to 92/Mum/2010 dated 27.08.2010 directed the applicant to deposit Rs.10.00 crores in f ive equal monthly instalments and f ixed the case of hearing of the appeals for 18.1.2011. Since the appeals could not be disposed of within the period of 180 days as provided under the f i rst proviso to section 254(2A) of the Act, the Tribunal vide i ts common order in SA Nos. 36 to 41/Mum/2011 dated 25.2.2011 extended the stay for a further period of 180 days or t i l l the disposal of appeals by the Tribunal whichever is earl ier.
4. Since the appeals are sti l l pending, and are posted for hearing before the Special Bench on 8.9.2011 and the order granted stay is expiring on 12.8.2011 the assessee f i led present stay appl icat ions to continue the order granting stay of demand t i l l the disposal of appeals. SA No.168 to 173/M/2011
5. At the time of hearing, the learned Sr. counsel for the assessee submits that in this case the Tribunal whi le deciding the Stay Appl ication vide order dated 27.8.2010 directed the assessee to pay a sum of Rs.10 crore in f ive monthly equal instalments which was paid by the assessee and accordingly, the hearing of the appeals was f ixed on 18.1.2011. Pursuant to that order, the regular appeals of the assessee company for the assessment years 2004-05 to 2009-10 were heard on 18.1.2011 for the whole day. At the end of the day the Bench had pronounced that the issue involved in the appeals is requi red to be referred to the Special Bench of the Tribunal. In these circumstances, the assessee had requested for continuation of the Stay of demand for a further period of 180 days as provided in the second proviso to section 254(2A) of the Act. Accordingly, the Tribunal was pleased to continue the stay of demand for a further period of 180 days vide its order dated 25.2.2011. The learned Sr.counsel for the assessee further submits that the stay granted pursuant to the aforesaid order is expiring on 12.8.2011, and, therefore, the assessee has preferred the present stay applications to extend further stay of demand ti l l the disposal of the appeals as the appeals of the assessee are posted for hearing before the Special Bench of the Tribunal on 8.9.2011. He further submits that SA No.168 to 173/M/2011 since the delay is not attributable to the assessee, therefore, in view of the decision of the Special Bench of the Tribunal in Tata Communication Ltd. V/s Assistant Commissioner of Income Tax (2011) 130 ITD 19 (Mum)(SB), the demand may be stayed ti l l the disposal of appeals.
6. On the other hand, the learned D.R. did not seriously oppose to the extension of stay of demand.
7. Having careful ly heard the submissions of the rival parties and perusing the material available on record we f ind that the facts are not in dispute. It is also not in dispute that the assessee has deposited Rs.10 crores in f ive equal monthly instal lments of Rs.2 crore each and the delay in disposing of the appeals is not attributable to the assessee. This being so and in the absence of any contrary material placed on record by the Revenue, we respectful ly fol lowing the order of the Special Bench of the Tribunal (supra), wherein i t has been held that the Tribunal has the power to extend the stay beyond the period of 365 days even after the insertion of Third proviso to sect ion 254(2A) with effect from 1.10.2008, grant the extension of stay for further period of six months or t i l l the disposal of the appeals whichever is earl ier. We hold and order accordingly. The SA No.168 to 173/M/2011 stay applications f i led by the assessee are, therefore, al lowed.
8. In the result, stay applications stand al lowed. Order pronounced in the open court on 12.8.2011. Sd sd ( R.S. SYAL ) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 12.8.2011 SRL: copy to:
1. Applicant
2. Respondent
3. CIT Concerned
4. CIT(A) concerned
5. DR concerned Bench
6. Guard f i le. True copy BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI