ULTRATECH CEMENT LIMITED, MUMBAI v. PRINCIPAL COMMISSIONER OF INCOME TAX - CENTRAL - 1, MUMBAI

Per Rajesh Kumar, JM All the four appeals by the assessee are directed against the order passed under section 263 of the Income Tax Act, 1962( hereinafter called The Act) by the Principal Commissioner of Income Tax(hereinafter called the Pr. CIT) dated 22.03.2018.

2. The common issue in all the four appeals are against the wrong assumption of jurisdiction by Pr. CIT from A.Y 2009-10 to A.Y 2012-13 u/s P a g e | 2 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1

263 of the Act in setting aside the assessment framed u/s 153C r.w.s. 143(3) of the Act on technical issue as well as on merits. Whereas the assessee has also objected the initiation of proceedings u/s 263 of the Act as barred by limitation as per the provisions of section 263(2) of the Act in two years namely AY 2009-10 and 2010-11.

3. The facts in brief are that the assessments were u/s 153C r.w.s 143(3) of the Act for A.Y 2009-10 and 2010-11 while assessments were framed u.s 153C r.w.s. 144C((3) r.w.s. 143(3) of the Act for 2011-12 and 2012-13 vide orders even dated 29.03.2016.

4. The assessee claimed deductions under Sec. 80IA(4)(i) of the I.T Act in respect of profit from Jetty/Port situated at Kovaya, Gujarat and also Rail System for A.Y 2009-10 and 2010-11 in its revised returns of income filed on 30.03.2011 and 15.12.2012. The assessee has also obtained certificate from the auditor in Form 10CCB as required under Sec. 80IA of the Act and furnished the same before the A.O. During the course of the assessment proceedings for AY 2009-10 and AY 2010-11, the AO made detailed inquiries in respect of on the claims under Sec. 80IA for Rail System as well as Jetty by issuing notice under Sec.142(1) of the Act. In response to the queries by the A.O, the assessee filed detailed submission vide letters dated 15.12.2011 and 25.06.2012 for A.Y 2009-10 and 25.02.2013 for 2010-11. The A.O completed the assessments for A.Y 2009-

10 and 2010-11 u/s 143(3) of the Act vide orders dated 31.12.2012 and 18.12.2013 respectively by allowing the deduction under Sec. 80IA of the Act in respect of profit earned from operation and maintenance Jetty/Port however, the A.O rejected and disallowed the claim for rail system after having considered the contentions and submissions of the assessee. In October, 2014 a search was conducted at the office of the appellant group companies and as a result the case of the assessee was selected for block assessment under Sec. 153C r.w.s. 153A of the Act comprising six years from A.Y 2008-09 to 2013-14. Even during the course of the assessment proceedings under Sec.153C for A.Y 2011-12 to 2013-14 the A.O issued notice under Sec. 142 dated 24.02.2015 requiring the assessee to furnish P a g e | 3 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 the various details including the details of deduction claimed under chapter VIA. At serial No.42 of the said notice and justification thereof. Thus, the A.O re-examined the issue of deductions qua the Jetty/Port during the course of block assessment also after calling for the necessary details from the assessee. The AO agreed to the claim made by the appellant of deduction of profit from Jetty/port in the block assessments for A.Y 2008-09 to 2010-11 framed and completed under Sec.153C r.w.s 143(3) of the Act and for A.Y 2011-12 to 2013-14 under Sec.153C r.w.s. 144C(3) r.w.s. 143(3) of the Act vide orders even dated 29.03.2016.

5. The Pr. CIT was of the view that the deduction qua profit from jetty/port was wrongly allowed without any enquiry by the AO and thus the assessment framed were erroneous and prejudicial to the interest of the revenue. Therefore, the Pr. CIT issued a show cause notice dated 28.02.2018, under Sec.263 of the Act in exercise of the revisionary jurisdiction for all the four years calling upon the assessee to show cause as to why the assessment orders passed by the assessing officer should not be held to be erroneous and prejudicial to the interest of the revenue under Sec.263 of the Act. The contents of the notice is reproduced as under: " In the case o f M/s U l t ratech Cement L imited , assessment j r A.Y2009- 10, 2010-11, 2011-12 and 2012-13 was completed u/s 153C r.w.s 143 (3) of the Income Tax Act, 1961, on 29.03.2016. On perusal of the assessment records it is seen that in the return of income, f iled for the aforesaid A. Ys. the assessee has claimed deduction u/s 80IA of the I.T Act, 1961, in respect of jetty located kovaya, in the state of Gujarat. The A . Y wise breakup o f the deduct ion al lowed to the assessee u/s 801A (4) on jetty is given as under:- A.Y 2009-10 2010-11 2011-12 2012-13 Returned Income 233,10,07,068 1014,47,96,154 1217,43,95,570 2283,23,74,150 Assessed Income 442,84,51,971 1264,91,72,972 1525,40,74,592 2850,88,91,728 Deducition claimed u/s 80IA(4) on Jetty 65,82,52,566 85,63,62,319 72,86,34,979 61,10,19,872

3. Sect ion 80IA ( '4) of the I.T Act provides that 100% of the income earned by an enterprise carrying on the business of any infrastructure like port, airport etc., shall be allowed as deduction in the computat ion of income subject to the following condition:- P a g e | 4 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1

i) I t is owned by a company reg is tered in Ind ia or by a consort ium of company. i i ) 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 facil ity, i i i ) It has started or starts operat ing and maintaining the infrastructure facility on or after the 1st day of April, 1995. Further, the definition of the term Infrastructure facility is elaborated in the explanation appended to section 801A (4)(1) of the IT Act. As per the explanation the term Infrastructure facility means:-

i) A road including toil road, a bridge or a rail system. ii,) A highway project including housing or other activities being a integral part of highway project. ii) A water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system. iii) A port , airport, inland waterway (inland port or navigational channel in the sea)

4. Thus, as per the provisions of the Act, deduction u/s 801A is allowable only in respect of profits and gains of industrial undertakings or enterprises engaged in developing or operating and maintaining of any infrastructure facility. However, in the instant case assessee is engaged in the bus iness of manufactur ing and sale of Cement. Moreover, as per subsection 5 of the section 801A of the I.T Act, for the purposes of determining the quantum of deduction under that subsection for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made". However, in the case under consideration, as mention above, the source of income of the assessee is sale of cement. The assessee has earned no income from the operation of the Jetty as the same was developed by the assessee for captive use.

5. Further, as per the conditions appended to section 80IA (4) of the I.T Act, 1961, the inf rastructure facil ity should be owned by the assessee for claiming deduction under this section of the Act, However, in the agreement that the assessee has entered into with the Gujarat Maritime Board, it is clearly mentioned that "the ownership of the structure so constructed vests in the Board and the Licensee shall have no right, title, interest or other proprietary right in respect of such structure or in respect of the land on which the structure is constructed, it being specifically understood that water-front is the sovereign right of the Government". Thus, the assessee is not the actual owner of the jetty in respect of which the assessee has c laimed deduction u/s 801A(4) of the Act.

6. It is further pertinent to mention here that infrastructure facility, within the meaning of section 80IA of the IT Act, means the facil ity developed, operated and maintained for the purpose of public utility. However, in the assessee case, the facil ity of jetty is developed or maintained for the purpose of captive use only i.e for to facilitate its inward and outward movement of goods from the assessee's integrated cement plant at Kovaya. It can be seen from the agreement that the jetty was allowed to be operated for the captive use of the assessee company. Since the permission is for captive use and not as part of a concession Agreement as in the case of an infrastructure project like a Road, Port or Airport, the condition prescribed under sub section 4(1)(b) is also not fulfilled. P a g e | 5 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1

7. The so called Jetty is not a self reliant, independent unit which qualifies the definition of the term 'undertaking'. It is providing services only to the cement plant of the assessee. It is apparent from these facts that the assessee has not created any infrastructure facility within the meaning of section 80IA(4) and hence not eligible for claiming deduction u/s 80IA of the Act in respect of jetty.

8. As per section 263(1) of the I.T Act, 1961 The [Principal Commissioner or] Commissioner may call for and examine the record of any proceedings under this Act, and if he considers that any order passed therein by the /Assessing/officer is erroneous in so far it is prejudicial to the interest of the revenue, he may, after g iving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cance l l ing the assessment and directing afresh assessment Further, as per the explanation 2 to section 263 "for the purpose of this section, it is hereby declared that an order passed by the A.O shall be deemed to be erroneous in so far as it is prejudicial to the interest of the revenue, if in the opinion of Principal Commissioner or Commissioner:- (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order direction or instruction issued by the Board under section 119; (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.

9. In view of the above stated facts, the order dated 29/03/2016 passed u/s 153C r.w.s 143(3) of the Act, for A.Y. 2009-10,2010-11,2011-,12 and 2012-

13 is prejudicial to the interest of revenue in as much as the deduction u/s 80IA(4) which was inadmissible in the case of the assessee as enumerated in para no. 2 (supra). Therefore, prima facie action under section 263 of the IT Act, 1961, is considered necessary in the instant case.

10. However, before initiating proceedings u/s 263 of the IT Act, an opportunity of being heard is given to you to explain along with the documentary evidences, as to why the action as proposed should not be taken in your case u/s 263 of the IT Act, 1961. Your case i s h e r eb y f ix ed f o r h e a r i n g o n 0 7 . 0 3 . 2 018 a t 1 1 . 3 0 am . Y o u may ap p e a r o n t h e stipulated date and time either in person or through your authorized representative. If you do riot wish to avail this opportunity of being heard, you may send written, submission in this regard on or before the given date and the same will be considered at the time of passing order u/s. 263 of the IT Act, 1961. The said show cause notice was replied by the assessee vide its written submissions dated 12.03.2018 objecting to the exercise of revisionary jurisdiction by the Pr. CIT under Sec.263 of the Act on the ground that the same is invalidly assumed and therefore not permissible as the AO has examined the claim of the assessee u/s 80IA in respect of profit from jetty/port in detail after raising a specific query during the assessment proceedings and considering the replies of the assessee allowed the claim. P a g e | 6 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 The assessee challenged the issue of show cause notice on legal issues as well as on merits. However, reply of the assessee did not find favour with the Pr. CIT and ultimately, the Pr. CIT set aside the orders of the A.O for all the four years by passing order u/s 263 of the Act dated 22.03.2018 by observing and holding as under:

i. appellant Company is not engaged in the business of developing or operating & maintaining infrastructure facility.

ii. the source of income of the appellant is sale of cement and no income was generated from jetty,

iii. the infrastructure facility is not for public utility.

iv. this facility is not owned by the Company.

v. the Mumbai Tribunal and the Bombay High Court in the appellant's own case for AY 2008-09 has taken negative view on this issue.

vi. since the orders proposed to be revised were passed under section 153C r.w.s. 143(3) of the Act, they are not time barred.

vii. the case of Ocean Sparkle Ltd. v. DCIT (99 TTJ 582) is distinguishable on facts and hence not applicable. Thus, the Pr. CIT has observed that A.O has not made proper enquiries required for taking a decision on the issue of allowability of deduction u/s 80(IA)(4) of the Act in respect of profit from Jetty and thus, the case falls within the explanation 2 to Sec. 263 of the Act by holding that orders passed by the A.O for A.Y 2009-10 & 2010-11 under Sec. 153C r.w.s 143(3) of the Act and 2011-12 to 2012-13 under Sec. 153C r.w.s 144C(3) r.w.s. 143(3) of the Act are erroneous and prejudicial to the interest of the revenue within the meaning of Sec. 263 of the Act. The Pr CIT observed that the orders for all the four years were passed in mechanical manner and without proper application of mind on the issue. Having observed all this, the Pr. CIT set aside orders passed under Sec.153C of the Act for A.Y 2009-10 to 2012-13 directing the A.O decide the issue afresh after hearing the assessee. Aggrieved by the order of the Pr. CIT passed under Sec.263, the assessee is in appeal before the Tribunal.

6. The ld. A.R vehemently submitted that the proceedings under Sec.263 of the Act by the Pr. CIT for A.Y 2009-10 and 2010-11 are barred by limitation under the provision of Sec.263(2) which provides that no order shall be made in sub-section 1 of Sec.263 after expiring of two years from the end of the financial year in which the order sought to be revised is passed. The ld. A.R submitted that the regular assessment orders under P a g e | 7 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 Sec.143(3) of the Act was framed on 31.12.2012 for A.Y 2009-10 and on 18.12.2013 for A.Y 2010-11 and hence the time limit within which those orders could have been revised under Sec.263 of the Act expired on 31.03.2015 and 31.03.2016 respectively. The ld. A.R further submitted that during the course of the regular assessment proceedings in AY 2009-10 and 2010-11 the A.O made comprehensive and specific detailed enquiries with regard to the claim under Sec.80IA(4) of the Act in respect of deduction claimed qua the profit from operation and maintenance of Jetty and the assessee filed submissions replying all the queries from the A.O for both the assessment years which are placed in the paper book at Page No. 119-205 and 206-212 respectively. In the regular assessments framed by the A.O under Sec.143(3) of the Act dated 31.12.2012 and 18.12.2013 for A.Y 2009-

10 and 2010-11 respectively, the A.O. accepted claim of the appellant under Sec.80IA(4) of the Act in respect of the profit earned from operation and maintenance of Jetty/Port while the claim in respect of rail system was rejected and disallowed. The ld. A.R further submitted that in the block assessment proceedings in A.Y 2009-10 and 2010-11, the claim in respect of Jetty was re-examined and allowed by the A.O vide orders dated 29.03.2016. The ld. A.R submitted that the assessee was aggrieved by the assessments framed under Sec.153C r.w.s. 143(3) of the Act challenging the additions as all the assessment were completed prior to the initiation of block assessment proceedings and thus attained finality. The ld AR argued that there was no incriminating material found and seized by search party pertaining to the said assessment years during the course of search. In the appellant proceedings before the CIT(A) against the orders of the A.O under Sec. 153C r.w.s. 143(3) of the Act for A.Y 2008-09 to 2010-11, the ld. CIT(A) annulled the assessments vide order dated 21.12.2017 on the ground that assessments were already completed before the requisition u/s 132A of the Act was made in respect of records ceased during the search proceedings falling within the period of 6 years as referred to Sec. 153A/153C of the Act has attained finality and cannot be altered or disturbed without reference to the ceased material. The ld. Pr. CIT(A) has given direction in the order passed under Sec.263 of the Act that the assessment framed by the A.O P a g e | 8 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 under Sec.153C r.w.s 143(3) are being revised by overlooking the fact that said assessment orders stand annulled by the CIT(A) on 21.12.2017 even prior to the issue of show cause notice by Pr. CIT on 28.02.2018 and therefore, the Pr. CIT(A) has issued direction to review the order which is non existent. The ld. counsel vehemently prayed before the bench that the order of Pr. CIT )for 2009-10 and 2010-11 is bad in law and should be quashed only on this ground. The ld. A.R stated that when the CIT(A) quashed the order under Sec. 153C r.w.s. 143(3), as a corollary the regular assessment orders under Sec.143(3) has to be considered as only existing orders in the appellant case in the assessment year 2009-10 and 2010-11. However, the assessment orders could not have been revised by the Pr. CIT under Sec.263 of the Act as being barred by limitation under the provisions of section 263(2) of the Act. Since, the order under Sec.143(3) was passed on 31.12.2012 for 2009-10 on 18.12.2012 for A.Y 2010-11, the time limitation within which the said orders could not have been revised under Sec.263 of the Act expired on 31.03.2015 and 31.03.2016 respectively for both the assessment years. The ld. A.R in defence as arguments and propositions relied on a series decision namely...........(D) Ashoka Buildcon Ltd. vs. ACIT [2010] (325 ITR 574) (Born) CIT vs. Lark Chemicals Ltd.[201 3] (368 ITR 655) (Born)

L.G. Electronics India (P.) Ltd. vs. PCIT [2014] (388 ITR 135) (All) Indira Industries vs. PCIT [2018] (95 taxrnann.com 103) (Mad) Century Textiles & Industries Ltd.vs. DCIT [2011](138 TTJ 83) (Mum) Tanuj Holdings (P.) Ltd. vs. DOlT [2017] (88 taxrnann.com 385) (Kol) Arvind Laxmidas Kabrawala (HUF) Vs. ACIT [2011] (12 taxman.com 73) (Ahd) The ld. A.R finally submitted that the direction to revise non-existent order for A.Y 2009-10 and 2010-11 is bad in law and should be quashed on the sole ground that when there is no order subsisting on the date of exercise of revisionary powers and the only orders existing were original assessments orders passed u/s 143(3) but the same were barred by limitation u/s 263(2) of the Act.

7. The ld. A.Rs second limb of the arguments was with respect to revisionary powers exercised wrongly as the twin conditions as envisaged P a g e | 9 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 under Sec.263 of the Act were not fulfilled. The ld. A.R submitted that the revisionary power under Sec. 263 of the Act can only be exercised in a case where the order passed by the A.O is erroneous in so far as it is prejudicial to the interest of the revenue and thus it cannot be exercised if it involves/ requires a review of earlier order or change of view taken earlier by the AO. The ld. A.R submitted that the primary contentions of Pr. CIT were that the orders passed in block assessment were without making required enquiries or verification and without application of mind which is against the facts on record as during the course of regular assessment in A.Y 2009-10 A.O had made enquires in respect of the claim of deduction in respect of profit from Jetty/Port for which the assessee made detailed submissions vide letters dated 15.12.2011 and 25.06.2012 which are placed at Page 119 to 205. The A.O only passed regular assessment order under Sec.143(3) dated 31.12.2012 a copy of which is placed at Page No. 487 to 509 of the paper book after carrying out a detailed examination and verification of the detailed submissions by the assessee qua the deduction under Sec. 80IA(4) of the Act in respect of profit earned from operation and maintenance of Jetty/Port while the claim of the assessee for rail system was rejected and disallowed. Similarly, in respect of A.Y 2010-11 the AO issued notice under Sec.142(1) of the Act calling upon the assessee to furnish the various details as to its claim under chapter VIA copy of which are placed at Page No. 110 to 114 which was complied with by the assessee by filing detailed written submissions vide letter dated 25.02.2013 justifying therein its claim under Sec.80IA(4) of the Act in respect of Jetty/Port copy of which is placed at Page No. 206 to 212. The ld AR argued that the A.O framed the regular assessment vide order dated 18.12.2013 allowing the claim of the assessee under Sec.80IA(4) in respect of the profit earned from operation and maintenance of Jetty/Port while the claim in respect of rail system was rejected and disallowed. The ld. counsel further submitted that likewise during the block assessment proceedings, the A.O issued notice dated 24.02.2015 under Sec.142(1) for A.Y 2011-12 and 2012-13 asking the appellant various details including details with regards to the deduction claimed under chapter VIA at serial No. 42 of the said notice a copy of which P a g e | 10 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 is placed at Page No. 115 to 118. The assessee replied to the said notice under Sec.142(1) vide written submission dated 10.08.2015 for A.Y 2011-12 and 17.12.2015 for A.Y 2012-13. The copies of the submissions are also placed in the paper book at Page No. 213-219 and 220-225, respectively for both the assessment years. The ld. Counsel contended that the tax holiday claim for Jetty/Port was re-examined by the revenue during the course of block assessments and only thereafter the claim was duly allowed after taking into consideration the submissions by the assessee justifying its claim on the deduction in respect of profit earned from operation maintenance of Jetty/Port. Thus, all these facts together which are part of the assessment records proved that at every stage A.O has made detailed enquiry and appellant has furnished all the requisite details. The ld. counsel further submitted that the Pr. CIT used in clause I of explanation 2 to Sec.

263 (which should have been made) cannot be read in a subjective manner as it will provide unfettered revisionary power to the authorities. The ld. A.O submitted that since the detailed enquiries were actually made by the A.O during the course of assessment proceedings and duly responded by the appellant therefore it cannot be said that the order were passed without making enquiry or verification which could otherwise have been made. Countering the observations of the Pr. CIT(A) on the issue of non application of mind on the information/details furnished by the assessee during the course of assessment and allowing the deduction mechanically, the ld AR argued that the A.O has allowed the claim of the assessee after considering the submissions while the claim in respect of rail system was rejected and disallowed. The ld. A.R further argued that A.Os view is also based on the decision of Tribunal in respect of claim of Jetty in the case of Oceans Sparkle Ltd. Vs. DCIT 99 TTJ 582 and therefore, order of the A.O is not erroneous even if it is considered to be prejudicial to the interest of the revenue. In the present case the block assessment orders were passed by the DCIT Central Circle-1(4) with the prior approval of the Additional CIT Central Circle-1, Mumbai and thus the A.O passed order after obtaining approval of the higher authority and therefore the order cannot be said to be erroneous since he has merely followed the decision of a superior authority. P a g e | 11 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 The ld. A.R relied on the decision of Goel Iron Steel Works India Vs. CIT 120 Taxman.com 208 (Agra) and also K.N. Aggarwal Vs. CIT 189 ITR 769 in defence of his arguments.

8. The ld. A.R also contended that the order passed by the A.O allowing the claim of the assessee under Sec.80IA(4) in respect of profit from operation and maintenance of Jetty/Port cannot be said to be erroneous for invoking the revisionary powers under Sec.263 of the Act on the ground that no discussion was made in the assessment order. The ld. A.R stated that the claim of the assessee was in respect of profit from Jetty/Port was allowed by the A.O after verification of various information/details furnished by the assessee during the course of assessment in response to various queries raised and therefore it is fair and reasonable to assume that A.O has allowed the claim based upon the technical analysis of the provisions of law and judicial ruling on the issue. Thus, there was due application of mind by the A.O as well as the superior authority who has approved the order and therefore, invoking the revisionary jurisdiction under Sec.263 is uncalled for and unwarranted. In defence of his arguments the ld. Counsel relied on the various decisions namely (i) CIT Vs. Fine Jewellery India Ltd. (2018) 372 ITR

303 (ii) IBM India Vs. CIT (ITA No. 598/Delhi/2011) (iii) CIT Vs. Moil Ltd. (2017) 81 Taxman.com 420, (iv) CIT Vs. Ashish Rajpal (2009) 320 ITR 674,

(v) CIT Vs. Vikas Polymer (2010) 194 Taxman 57, (vi) Hari Iron Trading Co. Vs. CIT (2003) 131 Taxman 531, (vii)Idea Cellular Ltd. Vs. DCIT (2008) 301 ITR 407 and various other decisions as under: CIT vs. Mehrotra Brothers (270 ITR 157) (MP) CIT vs. Parameshwar Bohra (267 ITR 698) (Raj) CIT vs. Arvind Jewellers (259 ITR 502) (Guj) CIT vs. J.P Goal (HUE) (247 ITR 555) (Cal) CIT vs. Macneill Magore Limited (232 ITR 945) (Cal) CIT vs. Amalgamations Limited (238 ITR 963) (Mad) Lark Chemicals Ltd. vs. CIT[2011] (16 taxmann.com 13) (Mum) Ashok Kumar Parasramka vs. ACIT (65 lTD 1) (Kol) Finally, the ld. A.R contended that by no stretch of imagination the order passed by the A.O be treated as erroneous even if it is considered to be prejudicial to the interest of revenue and thus a conclusion cannot be drawn P a g e | 12 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 by the Pr. CIT that no proper inquiry with respect to the allowance of deduction was made by the A.O and thus the Pr. CIT mechanically assumed jurisdiction under Sec.263 of the Act.

9. The ld. A.R further argued that the provision of Sec.263 do not permit the tax authority i.e. the Pr. CIT the setting aside the assessment and start fishing and roving inquiries. The revenue cannot be allowed to begin the fresh litigation because they differ from the view expressed or inference drawn by the lower authorities. The ld. A.R submitted that the Pr. CIT cannot initiate fishing or roving enquiries in the matter or orders which are already concluded and such action shall be against the well accepted policy of law that there must be a point of finality in all legal proceedings. The ld. A.R submitted that the claim under Sec. 80IA was examined by the A.O in detail on the basis of detail submissions made by the appellant and as is evident from the fact that the A.O accepted the claim of the assessee as regards the profit from operation and maintenance of Jetty/Port while simultaneously rejecting the claim qua the rail system and therefore the assessment orders could not be held to be erroneous simply because AOs order did not elaborate or discuss allowability of deduction in respect of profit from jetty in the assessment orders itself. The ld. A.R further stated the Pr. CIT has set aside the assessment orders for fresh verification without concluding as to how the order passed by the A.O was erroneous. In defence his argument the ld. counsel relied on the decision of CIT Vs. Gabrial India Ltd. 203 ITR 108 wherein it has been held that the order of the A.O cannot to be erroneous simply because there was no elaborate discussion with regards to the issue when the A.O raised specific query and assessee replied thereto and therefore, the A.O cannot be asked to review the matter which is wrong and against the provision of the Act. In the present case issue has been examines in depth by the A.O both in the original assessment proceedings as well as in the block assessments and mere non discussion on the issue in the assessment order cannot be a case of non application of mind since in almost all cases, where revenue authorities agree with the contentions of the claim made by the assessee, P a g e | 13 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 normally there is no discussion of the same in the assessment order. The ld. A.R stated in present case the AO raised specific query in original as well as proceedings u/s 153C of the Act and therefore in view of the said facts the orders passed by the A.O cannot be considered as erroneous in so far as it is prejudicial to the interest of the revenue and therefore, the proposed revisionary proceedings would merely amount to review of earlier orders or change of opinion. Hence, the order passed under Sec.263 of the Act is bad in law.

10. On merits, the ld. A.R submitted that the objections raised by the Pr. CIT are based upon conjectures and surmises and are factually incorrect. The ld. A.R submitted that the assessee has a cement plant at Kovaya in the State of Gujarat and Jetty/Port at Kovaya was used to transport material to the cement plant from jetty through ship from outside India by imports and for outward dispatch of a cement/clinkers from the cement plant to various destinations. According to the Pr. CIT in the business of Cement manufacturing and selling, no tax holiday deduction is available since as per provision Sec. 5 of 80IA of the Act deduction is available only to those entities which are into the business of developing operating and maintenance of infrastructure facility of Jetty/Port. The ld. A.R submitted that it is quite clear from the plain reading of Sec.80IA subsection 5 that for the purpose of determining quantum of deduction under Sec.80IA the law requires the assessee to consider as if the eligible business is the only source of income meaning thereby the law creates fiction to consider the eligible business as only source of income merely for the purpose of computing deduction under Sec.80IA and it nowhere denies the benefit of 80IA if the assessee has more than one businesses. The ld. A.R stated that though the main business of the assessee is manufacturing and selling of cement and cement related products but in order to facilitate the main business the assessee is at liberty to do any business activity or activites which supportive to the main business. The ld. A.O stated that the appellant created an undertaking which is in the business of developing, operating and maintaining Jetty/Port and the said undertakings is engaged in the P a g e | 14 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 business of developing, operating and maintaining Jetty/Port and hence even otherwise the requirements and conditions are fulfilled which are prerequisite to allowance of deduction u/s 80(IA) of the Act. The Jetty/Port developed by the assessee is a full fledged business carrying on the commercial activity in an organized and systematic manner by the Jetty/Port i.e. it is engaged transportation of raw materials imported from outside to the factory site and outward carriage of finished and other related products to foreign markets etc thus carrying out business in a systematic and organized manner of transportation of goods from one place to other. The ld. A.R stated that the business of Jetty/port of providing services of transportation to non eligible business segment of cement manufacturing and selling is part of the assessees business. Therefore, the deduction cannot be denied on the basis that the assesse has both eligible and non-eligible business. Undoubtedly, the Jetty/Port is always developed and constructed for captive operation and therefore, provisions of of Sec.80IA cannot be read in a manner to make them otiose when the legislature in his wisdom intended to give benefit of tax holidays for construction operation and maintenance of infrastructure facility in the form of Jetty/port which is meant for captive consumption. Further, Sec.80IA of the Act also contemplates situation where goods and services are transferred by one eligible undertaking to other non eligible undertaking of the assessee or vise versa. The said Section provides that where the sale of goods and services are effected at value at which such transfer are recorded in the books of account of the eligible business, the deduction under Sec.80IA will be allowed based on the market value of such goods and services. Undoubtedly, therefore, the section itself envisages and contemplates a situation of captive consumption. In support of this proposition, the ld. A.R relied on the decision of the Honble Supreme Court in the case of Tata Iron and Steel Co. Ltd. 48 ITR 123 wherein it has been held where the final project of the assesses business generate profits involving various activities that are to be considered separately for the purpose of taxability. The Honble Supreme Court has held that despite captive consumption of iron ore for the manufacturing of steel and profit P a g e | 15 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 has to be apportioned between the extraction activity of iron ore and manufacturing of steel and thus ruled in favour of bifurcating the total profits into two activities viz-a-viz the extraction activity and manufacture activity. The Supreme Court further held that there has necessarily to be an apportionment of profit realised by sale of end product between what is attributable to the mining activity and what is attributable to process which results in manufacture of finished product and such apportionment does not involve any disintegration of the business. Therefore the conclusion of the Pr. CIT that a person cannot be trade with himself/itself does not to apply to such an apportionment. The ld. A.R also relied on the decision of the Hyderabad ITAT in the case of Ocean Sparkle Ltd. Vs. DCIT 99 TTJ 582 which was rejected by the Pr. CIT. The ld. AR submitted that the Hyderabad Tribunal allowed deduction under Sec.801A in respect of operation and maintenance of Jetty. The ld. A.R contended that the Pr. CIT only objection not to follow the said decision of the coordinate bench was that in the case assessees business was operation and maintenance of Jetty only and therefore cannot be applied to the facts of the case as the assessee in the present case as the assessee is carrying on the business of manufacturing and selling of cement and therefore distinguished. The ld AR argued that the reasons cited by the Pr. CIT for not following the decision of the Hyderabad bench are trivial as the Pr. CIT has not followed the said decision as in that case the before Hyderabad bench was allowability under Sec.80IA for operation and maintenance of Jetty and was only business whereas in the case of assessee , it was doing manufacturing and selling of cement besides maintenance and operation of Jetty which was only axilliary and supportive to the main business. The ld. A.R contended that the A.O has given due regards and deliberation to the fact that higher authority i.e. Tribunal has already recognized the allowability of tax holiday claim in respect of business of operation and maintenance of Jetty and thus might have allowed the claim in the assessment and now the Pr. CIT cannot review and revise his view on the issue by citing non application of mind by the A.O. The ld. A.R submitted that the facts of the case in Ocean Sparkle Ltd Vs DCIT (Supra) and that of P a g e | 16 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 the assessee qua claim under Sec.80IA are similar and therefore the orders passed by the AO are not erroneous.

11. The ld. A.R submitted that ownership of infrastructure facility by the appellant company is not prerequisite for claiming deduction under Sec.80IA as the provisions of subsection 4 of Sec. 80IA clearly provide that any undertaking carrying on the business of developing or operating and maintaining or developing operating and maintaining any infrastructure facility fulfil certain conditions namely (a) it is owned by the company register in India or by a consortium of such companies , (b) which has entered into agreement with central government or state government or 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 (C) it has started or starts operating and maintains the infrastructure facility owned or after 1st day of April 1995. The ld. A. R submitted that the assessee company has fulfilled all the conditions as prescribed in the subsection 4 of Sec.80IA. The ld. A. R submitted that in the case of the assessee, the enterprises of Jetty/Port is owned by the assessee. The assessee company has entered into an agreement with the Gujarat Merri time Board for developing, operating and maintaining the infrastructure facility i.e. Jetty/Port and thirdly, the assessee company started operating and maintaining such infrastructure facility in May, 1997. In view of the satisfaction of all these three conditions, the view of Pr. CIT that assessee is not owner of infrastructure facility and thus it has failed to fulfil the conditions of Sec. 80IA(4)(a) of the Act. The ld. A.R submitted that the law requires only that an enterprise is engaged in the development or operation and maintenance of the infrastructure facility on behalf of the developer and not the owner of the facility as the owner of infrastructure facility viz. Jetty/Port does not even vest with the developer since the water front is the sovereign right of the Government. The ld. A.R submitted that Sec. 80IA (4a) does not require the infrastructure facility to be owned either by the enterprise developing the infrastructure facility or by the enterprise operating and maintaining the said facility. The law requires P a g e | 17 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 that enterprise which claimed the tax holiday should be owned by the company registered in India . Since, the ownership of Infrastructure facility viz. Jetty/Port can under no circumstances vest with the private developers since water front is the sovereign right of the government. The ld. A.R further clarified that the word It in sub clauses (a) , (b) and (c) of Clause I of Subsection 4 of Sec.80IA has been used to denote enterprise. The ld. A.R further clarified that the plain reading of the said clause I makes it clear abundantly without any ambiguity that it is that any enterprise that fulfil the conditions of carrying on particular type of business satisfies in the main part of Clause I and also it is any enterprise that has to fulfil other conditions satisfied further in sub clause a,b and c of Clause I subsection 4 of Sec. 80IA of the Act. The ld. A.R submitted that the world it in the said sub clauses a, b, and c qualifies the word enterprise used in the main part of the clause I of subsection 4. In defence of his argument the ld. A.R relied on the decision of coordinate bench in the case Patel Engineering company Ltd. Vs. DCIT 94 ITD 411 wherein it has been clarified that the word it in sub clauses a, b and c of clause I of subsection 4 of Sec. 80IA has been used to denote enterprises and not the infrastructure facility. Therefore, the ld. A.O contended that it is clear that infrastructure facility need not be owned by the company and hence the objection raised in this regard is irrelevant and out of place.

12. The ld. A.R argued that it is not prerequisite that Jetty/Port which is an infrastructure facility is meant for the public utility only. According to the Pr. CIT the said Jetty/Port the infrastructure facility is a private Jetty not meant for public utility and thus it does not fulfil the requirement of law and reached a conclusion that claim of the appellant cannot be accepted. The ld. A.R also tried to explain the position of the Act prior to amendment by Finance Act 2001 and Post to that amendment. The ld. A.R submitted that prior to Finance Act 2001 the prior infrastructure facility was defined to mean a road, bridge air port, port, rail system or any other public facility of similar nature as may be informed by the board in this behalf in the official gazette whereas the amended definition of the infrastructure facility by P a g e | 18 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 Finance Act 2001 with effect from 01.04.2002 does not require the infrastructure facility of public utility for allowing deduction under Sec.80IA as of now the term infrastructure facility is defined to means road including, bridge or rail system or port without anything further and therefore, the plea of Pr. CIT That Jetty/Port has to be public utility has no relevance whatsoever in deciding the allowability of claim of exemption under Sec.80IA(4) of the Act. The ld. counsel stated that Sec. 80IA(4) nowhere required the facility to be facility to be a public facility. The assessee started claiming deduction under Sec.80IA(4) from A.Y 2009-10 when the definition was amended simply with no indication or requirement of it being a public utility. The ld. counsel stated that it is a settled principle that it is the law enforce in the previous year which has to be applied for ascertaining the income. The ld. A.R contended that a Jetty constructed by private player is always constructed for captive consumption and therefore, provisions of Sec. 80IA(4) cannot be read in a manner to make it otiose. When the legislature in all its wisdom intended to give benefit of tax holiday for construction of infrastructure facility in the form of Jetty which is meant for captive consumption. The ld. A.R referred to the clause no. 18 of the agreement entered into by the assessee and the Gujarat Merritime Board and submitted that it is explicitly mentioned that the use of Jetty is a property right of the licensee for using of Jetty/Port and it is further provided that in that agreement that Jetty/Port when not in use by the licensee shall be entitled to be used by the board for itself or for traffic being regulated by the board for the purpose of embarking or disembarking their ship/tugs etc and loading and discharging the cargo and the licensee to the assessee shall not by any act of commission or a mission restrict the use of Jetty/Port and back up area by the board except when it is actually used by the assessee for the purpose of providing the agreement. Thus, the board has right to regulate the use of Jetty/Port for itself or for the traffic being regulated by the board meaning thereby that even anyone wants to make use of Jetty/Port which is permissible for the board to entertain such requests. The ld. Counsel submitted that the Jetty/Port of the assessee has an immense potential with enabling powers to Gujarat Meritime Board to be P a g e | 19 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 developed into an infrastructure facility that will be enured to the public and hence such a facility is in fact a public utility. The ld. A.R submitted that a similar claim in respect of tax holiday deduction of rail system the view of the assessee has been concurred by the Tribunal in its order dated 05.04.2017 in ITA No. 5065/Mum/2014 for A.Y 2009-10 in ITA No. 5107/Mum/2014 for A.Y 2010-11. The ld. A.R further referred to the clause no. 14 of the agreement with the Gujarat maritime board which states that the board has no objection if the licensee claims the benefit of depreciation under Sec.32 of claims deduction under Sec.80IA of the Income Tax Act.

13. As regards the observation of the Pr. CIT(A) on the rejection of assessees claim on the issue in A.Y 2008-09 by the Tribunal and Bombay High Court, the ld. A.R submitted that the CIT(A) has failed to comprehend that A.Y 2008-09 the issue before the Tribunal and Bombay High Court was admissibility of additional ground regarding the Jetty made for the first time before the Tribunal and it is only that the ITAT as well as High Court has rejected the issue of admissibility of additional ground raised for the first time before the Tribunal and the issue was not decided on merit of the claim. Therefore, the Pr. CIT(A) is totally wrong coming to the conclusion that the issue has been rejected by the Tribunal and High Court in A.Y 2008-09 and cannot be applied to the subsequent years. Finally, the ld.A.R prayed for the bench that all objections raised by the CIT(A) on merits of the issue by alleging that the issue has not been considered by the A.O on merit has passed as not acceptable in view of the fact has stated hereinabove in fact the A.O has correctly applied is mind or the submission made by the appellant and allowed the claim and therefore, such an order cannot be taken up using the revisionary jurisdiction under Sec.263 of the Act and accordingly the order passed under Sec.263 of the Income Tax Act, by the Pr. CIT should be quashed.

14. Per contra, the ld. D.R vehemently opposed the submissions and contentions of the senior counsel of the assessee on the issue of order under Sec.263 dated 25.09.2018 for A.Y 2009-10 and 2010-11 which were passed under Sec. 153C r.w.s 143(3) dated 31.12.2012 and 29.03.2016 respectively P a g e | 20 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 being barred by limitation as this order were quashed by ld. CIT(A) on the ground that the assessments in these have not abated as they had attained finality and the additions have to be based upon the incriminating materials found during the course of search. Countering the arguments of the ld. Counsel of the assessee, the ld D.R. submitted that that the ld CIT(A) deleted the additions on the technical issue of not having found any incriminating materials during the search and therefore there is no question of non survival /existent order as passed by the AO u/s 153C r.w.s. 143(3) of the Act,. The ld DR argued that the revisionary jurisdiction u/s 263 of the Act was rightly invoked on the orders which were erroneous and prejudicial to the interest of the revenue as the AO has not examined the issue correctly. The ld. D.R submitted that as is clear from Para 2.2. and 2.3 page 7 of the order of Pr. CIT under Sec. 263 of the Act it is clear that issue covered under revision proceedings under Sec. 263 was subject not matter of an appeal before the CIT(A) and therefore revisionary proceedings were validly initiated under Sec.263 of the Act. The ld. D.R submitted that in the revisionary proceedings Pr. CITs main thrust was on the claim under Sec. 80IA(4) by the assessee qua deduction of profit from operation and maintenance of Jetty/Port which was not before the CIT(A) in appeal. The ld. D.R contended that the ld. CIT(A) while deleting the addition made by the A.O in the assessment framed under Sec.153C r.w.s. 143(3) dated 31.12.2012 for A.Y 2009-10 and dated 29.03.2016 for A.Y 2010-11 observed that the additions were not based on the incriminating material ceased during the course of the assessment proceedings and thus relying on the decision of Bombay High Court in the case of CIT Vs Continental Warehousing Corporation Ltd & Another 374 ITR 645. Thus, it is obvious that the additions were deleted on technical grounds and not on merits and in these circumstances the issue remains alive qua the additions made in the absence of or not arising from the incriminating material depending on the outcome of appeal by the revenue on this issue arising out of decision of Honble High Court of Bombay. Accordingly, the ld. D.R submitted that the revisionary proceedings as initiated by the Pr. CIT under Sec. 263 of the Act are not barred by limitation and very much valid and legal under the Act. P a g e | 21 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 The ld. D.R submitted that this argument of limitation is only taken up by the ld. A.R in respect of A.Y 2009-10 and 2010-11 and not for A.Y 2011-12 and 2012-13.

15. The ld. D.R further countering the arguments of ld. A.R that order passed under Sec.153C r.w.s. 143(3) of the Act were not erroneous or prejudicial to the interest of the revenue, the ld. D.R submitted that the order passed for under Sec. 153C r.w.s. 143(3) for all the four years commencing from 2009-10 to 2012-13, the A.O has not examined the issue of claim of deduction under Sec.80IA of the Act with respect deduction of qua profit from Jetty/Port. The ld. D.R submitted that though the A.O has made a disallowance of claim under Sec.80IA with respect to rail system after examination of details/replies/submissions filed by the assessee but there is no application of mind by the A.O on the issue of claim of deduction under Sec.80IA with respect to Jetty/Port. The ld. D.R while taking us through the page No. 119 of Paper book submitted that the said reply dated 15.12.2011 with captioned subject our income tax assessment for 2009-10 deduction under Sec.80IA Infrastructure facility Jetty/port is before the date of search on 16.08.2013 meaning thereby that the said submissions of the assessee were made even before the proceeding under Sec.153C of the Act were initiated by the A.O. in the block assessments period. The ld. D.R further submitted that the notice under Sec. 142(1) dated 24.02.2015 issued for A.Y 2011-12 to 2014-15, a copy of which is placed at page No. 116, 117 and 118 of the assessees paper book, was issued during the assessment proceedings under Sec.153C of the Act and said notice was having two annexures A&B. The ld. D.R pointed out that vide item no. 42, a query was raised by the A.O calling upon the assessee to furnish the details of exempt income and deduction under Chapter VIA of the Act, if any, along with justification as to how the such deductions are allowable and part B pertained to question relating to others issues and thus there was no specific question with respect to claim under Sec.80IA qua Jetty was raised or asked from the assessee. Further the ld. D.R contended that even if this was considered to be indication of satisfaction on the part of the A.O qua the P a g e | 22 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 exempt income i.e. the claim under Sec.80IA with respect of Jetty but there is neither anything on record nor in the assessment orders as the ld. counsel failed to demonstrate anything that indicate that such an enquiry qua the claim under Sec. 80IA with respect to Jetty was made or was taken logical conclusion. It is true that the A.O has disallowed the claim with respect to rail system under Sec.80IA meaning thereby if the A.O examined the issue of claim with respect to Jetty claimed under Sec.80IA the A.O would had recorded his satisfaction while the claim under Sec.80IA with respect to rail system was rejected and disallowed. The lack of enquiry or enquiry not being taken to logical conclusion is itself proof of such assessment orders under Sec.143(3) r.w.s. 153C of the Act being erroneous and prejudicial to the interest of the revenue and therefore such assessment orders are fit for exercising revisionary powers by the Pr. CIT under Sec.263 of the Act. The ld. D.R also referred to the explanation 2 to Sec.263 inserted by Finance Act 2015 with effect from 01.06.2015 during the hearing and also contented that Pr. CIT has reasoned the action under Sec.263 in Para 2.3 Page No. 8 of the notice. In Para 3.1 of Page 8 of Pr. CIT has discussed that A.O has not expressed any opinion with respect to claim under Sec.80IA of the Act with the respect deduction of profit from Jetty, though the claim in respect of rail system was rejected. Therefore, when there is no opinion on the claim under Sec.80IA with the respect to Jetty, there is no question of there being two opinions. It is stated that the board has considered the matter and it has been decided that such structure will be included in the foundation of port for the purpose of Sec.10 subsection 23G and 80IA of the Income Tax Act, if the certain conditions therein are fulfilled. The first condition is that the concerned port authority has issued a certificate that such structure form part of the port. The ld. D.R also refer to the agreement between the Larsen & Tourbo Ltd. with Gujarat Meritime Board dated 28.02.2000 and submitted that clause E of the said agreement at Page No. 128 defines the captive Jetty to mean that a Jetty constructed for landing and shipping by a port based industry , located in Gujarat for loading and shipping of their captive Industrial raw materials for manufacturing or their final products that are manufactured. The Pr. CIT P a g e | 23 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 also referred to clause no. 14 of the said agreement wherein it has been mentioned that Gujarat maritime board has issued no objection to the effect that the licensee can claim depreciation under Sec.32 of the Act and also deduction under Sec.80IA of the Income Tax Act, 1961. The ld. D.R contended that the clause does not have any relevance as any claim under Sec. 80IA of the Act has to be allowed upon fulfilment of certain conditions and not on the basis of certificate given by the third party i.e. Gujarat Meritime Board. Moreover, Gujarat Maritime Board has given the no objection certificate and not by any port authority in terms of CBDT Circular 793 dated 23.06.2000 that the said structure Jetty formed part of the port. The ld. D.R thus contended that the A.O is duty bound to examine whether the assessee has obtained the certificate from the port authority to effect that such structure i.e. Jetty forms part of the Port. The ld. D.R contended this being a serious lapse, consequently the assessment orders passed by the A.O are rendered erroneous and prejudicial to the interest of the revenue and thus a fit case for exercising revisionary power under Sec.

263 of the Act by the Pr CIT. The ld. D.R while referring the Para 3.2.4 of Page 10 of order under Sec.263 contended that the Jetty is not the infrastructure facility for public utility. The ld DR also referred to the memorandum of finance Act, 1997 to clarify this issue. The ld. D.R submitted that public utility is not defined in the IT Act and therefore, its meaning has to be gleaned. The public means of or concerning people as a whole and facility means of a place , amenity or piece of equipment provided for a particular purpose. The ld. D.R submitted that the infrastructure eligible under Sec.80IA of the Act to be a public facility i.e. public facility for the public and its meaning cannot be confined to Jetty which is for transportation and shipping for their captive industrial raw material for manufacturing and for outward transportation of finished products. The jetty is constructed by the assessee for its own specific use and not for public utility and therefore the action of the A.O in allowing deduction under Sec.80IA with regard to Jetty is rightly held as erroneous and prejudicial to the interest of the revenue. The ld Dr while referring and replying to the contentions of the ld. counsel also referred to the P a g e | 24 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 amendment in Sec. 80IA with effect from 01.04.2002 by Finance Act 2001 explanation to Sec. 80IA whereby the term public facility has been omitted. The ld. D.R referred to pre-amendment and post amendment provisions of Sec.80IA(4) and submitted that the mere omission of public facility in the explanation does not mean that infrastructure facility can be a private facility. As regards the change of opinion and review of orders , the ld. D.R submitted that the Pr. CIT at page No. 12 of revisionary order under Sec.

263 of the Act para 3.3.8 has stated that the A.O has not expressed any opinion on the claim under Sec.80IA with respect of Jetty and therefore, the action under Sec. 263 does not result in any change of opinion. The ld. D.R distinguished their decisions relied upon by the ld. A.R as under:

1. CIT Vs GABRIEL INDIA LTD.(Bombay High Court) - pp 1 of PB Please see head note. Also see placitum B on page 3 of paper book. The facts of this case are that the ITO had made enquiries in regard to the nature of expenditure incurred by the assessee. The claim was allowed by the ITO on being satisfied with the explanation of the assessee. In such a background, the High Court held that action u/s 263 directing ITO to reexamine the matter was not permissible. The facts in the case under appeal are that the AO never made an enquiry on claim u/s. 80 IA wrt Jetty and further disallowed a similar claim wrt rail system. Therefore, reliance on this decision is misplaced.

2. CIT Vs. FINE JEWELLERY (INDIA) LTD( 2015) 372 ITR 303(Bom) pp 11 of PB This decision pertains to disallowance by AO treating part of expenditure incurred for building brand as Capital nature. The CIT u/s. 263 held that the entire miscellaneous expenditure for creation of brand was capital expenditure. The High Court held (please see page 12 of PB) that the AO having made specific queries during assessment proceedings wrt this expenditure and having held that only a part of this expenditure incurred on account of repairs and maintenance was capital expenditure indicates application of mind by the AO. The being a possible view, the CIT could not have interfered with the same u/s. 263. The facts in the case under appeal are that the AO never made an enquiry on claim u/s. 80 IA wrt Jetty and did not demonstrate application of mind; more so when the AO has disallowed claim u/s. 80 IA wrt Rail system. Therefore, reliance on this decision is misplaced.

3. IDEA CELLULAR LTD Vs. Dy. CIT AND OTHERSI20081 301 ITR 407 (Bom) - pp 16 of PB The facts of this case pertains to reassessment after 4 years and there being no failure to disclose material facts, explanation to section 147 was not applicable. Please see para 9 on page 23 of PB. It was held that since the AO had not expressed any opinion regarding this matter in his original assessment order, it could not be said that there was any change of opinion in this case. " in our view, once all the material was before the AO and he chose not to deal with the several contentions raised by the petitioner in his final assessment order, it cannot be said that he had not applied his mind when all material was placed by the petitioner before him". P a g e | 25 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 This was clearly in the context of reassessment u/s. 147 and therefore, reliance on this case is misplaced.

4. GOYAL IRON & STEEL WORKS (INDIA)Vs. CIT (ITAT Agra Bench)IT(SS) NOS.5 TO 7(AGRA) OF 2000 dt. 28.09.2001- pp 28 of PB. This decision pertains to whether order passed by AU u/s. 158BC and 158BD on basis of direction issued by Addl. CIT u/s. 144A could be said to be erroneous and prejudicial to interest of revenue. P1. see page 29 of PB wherein, this decision refers to various case laws and accordingly holds that when an AU adopts one of the courses permissible in law and it has resulted in loss of revenue or where two views are possible and the AO has taken one view with whom the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of revenue, unless the view taken by the AU is unsustainable in law. The facts of this cited case are that the AU passed an order under Chapter XIV-B and directions were issued by the Addl. CIT u/s. 144A. On the basis of such direction u/s. 144A, the AU had no option but to follow the same. It is in this background that the Hon'ble ITAT held that the order passed by AU was not erroneous and jurisdiction was wrongly assumed by CIT u/s. 263. The assessment order in the case under appeal was not a direction u/s 144A. Thus, the AU was not under any compulsion to allow or disallow any expense or claim. The impugned order u/s. 263 is against an assessment order where it is clearly demonstrated that the AU has not applied his mind. Therefore, this decision cited supra cannot further the case of the assessee.

5. K.N. AGARWAL Vs. CIT [1991] 189 TR 769 (Allahabad) pp 30 A of PB Please see head note. In this case ITO followed decision of High Court for earlier years on identical issue of assessee and allowed assessee's claim and completed the assessment. The High Court held that merely because this decision of High Court is matter of further appeal before Supreme Court it could be incorrect to say that order of ITO was erroneous and therefore Commissioner had no jurisdiction. In the present case under appeal, the A.O has not followed any decision of High Court for earlier years and therefore, the afore cited decision cannot be relied on. Even if it is construed that the Ld. Counsel is referring to the decision of the CIT(A) deleting the addition u/s. 153C as no incriminating material was found based on the decision of the Hon'ble Bombay High Court in the Continental Warehousing, it is pertinent to note that this decision is on legal ground and not on merits and the said legal ground is under further appeal.

6. HARI IRON TRADING CO. Vs. CIT [2003] 263 ITR 437 (Punjab & Haryana) dt. 23.05.2003 - pp 211 of PB The facts of this case are that survey was conducted on assessee f irm and assessee surrendered certain amount on account of excess stock found. However, while filing return assessee d id not disclose such surrendered amount . Assessee on query stated that surrender was due to bonafide mistake in stock calculation and in fact there was no discrepancy in stock. AO accepted assessee's contention and did not make addition of said amount in assessee's income. Commissioner u/s. 263 held that AO had not made proper enquiries and set aside order to AO. It was held that not only assessment order but entire record had to be examined before arriving at a conclusion as to whether AO had examined any issue or not and since CIT had failed to refer assessment record, order u/s. 263 was to he set aside. Please see para 7 on page 215. P a g e | 26 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 The record as demonstrated by the Learned Counsel only shows that a notice u/s 142(1) dt 24.2.2015 for AY 2011-12 to 2014-15 was issued and only a routine question was asked (please see discussion supra). Please see pp

119 of assessee's PB. This is a submission dt 15.11.2011 and the captioned subject is "Our income tax assessment for AY 09-10-deduction u/s 80IA Infrastructure Facility - Jetty / Port." Obviously this is before the date of search on 16.8.2013 and therefore before the proceedings u/s 153C were even initiated. Even if it is construed that this submission was examined, there was no logical conclusion for allowing the same when the same claim for rail system was disallowed. This is clear non- application of mind by the AO. For all the detailed reasons cited above and the discussion by the PCIT in his order u/s - 263, the order u/s 263 must be upheld and the plea of the assessee- appellant dismissed. Finally, the ld. D.R submitted that the notices under Sec.142(1) of the Act dated 24.02.2015 for A.Y 2011-12 to 2014-15 were issued and only routine queries were raised in therein. The ld. DR also refer to Page No. 119 of the assessees paper book which is a submission dated 15.11.2011 with captioned subject Our income tax issue A.Y 2009-10 and deduction under Sec.80IA infrastructure facility Jetty/Port. The ld. D.R submitted that obviously this submission dated 15.11.2011 was before the date of search on 16.08.2013 when the proceedings under Sec. 153C of the Act were not even initiated. Finally, the ld. D.R prayed before the bench that considering facts and circumstances as narrated above and the distinguishable decision relied upon by the A.R, it is quite clear that Pr. CIT has rightly exercise of revisionary powers under Sec.263 of the Act by setting aside assessment orders framed by the A.O without application of mind and without making any enquiry or recording any satisfaction with respect to allowance of deduction under Sec.80IA(4) qua Jetty and the revisionary proceedings deserved to be upheld.

16. We have heard the rival submissions and perused carefully the relating materials/records as placed before us including the impugned orders and the various case laws relied by the ld. A.R and the written submissions filed by both the parties. There are four appeals before us from 2009-10 to 2012-13. The assessee has challenged the jurisdiction of the Pr. CIT under Sec. 263 of the Act for A.Y 2009-10 & 2010-11 on the ground that the proceedings under Sec. 263 of the Act are barred by limitation as per provisions of section 263(2) of the Act and hence bad in law. We find P a g e | 27 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 that the assessments in the A.Y 2009-10 to 2010-11 were completed and attained finality before the initiation of search proceedings and assessments have not abated. The A.O while framing assessment under Sec. 153C r.w.s. 143(3) of the Act have some additions which were challenged before the CIT(A) and CIT(A) annulled the assessment for A.Y 2008-09 to 2010-11 vide order dated 21.12.2017. We presently are concerned with the assessment year 2009-10 & 2010-11. The decision of ld. CIT(A) was based on the reasoning that assessment/reassessment have already attained finality before the requisition was made in respect of records seized during the search proceedings falling within 6 years period as referred to in Sec.153A/153C of the Act and any addition to be made in these years falling in the block 6 years has to be based upon an incriminating material seized during the search. The ld. CIT(A) has clearly held while passing order under Sec.153C r.w.s. 143(3) of the Act for A.Y 2009-10 that seized material in the case of the assessee is not at all connected with the assessment year under consideration and hence the assessment which is already completed under Sec. 143(3) of the Act and which has attained finality cannot be interfered with. The ld. CIT(A) finally concluded that there are no incriminating material/evidences seized during the course of search and therefore the assessment under Sec.153C of the Act has to be made on original assessed income and no addition can be made dehorse the incriminating evidences recovered during the course of search. Similarly for A.Y 2010-11, the ld. CIT(A) annulled the order passed under Sec. 153C r.w.s. 143(3) with the same observations. In the present case the Pr. CIT has proposed to revise the assessment orders passed under Sec. 153C r.w.s. 143(3) of the Act which have been annulled by the ld. CIT(A) on 21.12.2017 even prior to the issue of show cause notice by Pr. CIT under Sec. 263 of the Act on 28.02.2018. In our opinion the orders which are annulled by CIT(A) are no more existent on the date of issue of notice under Sec.263 of the Act and therefore cannot be revised. So far as the regular assessment orders under Sec.143(3) for A.Y 2009-10 dated 31.12.2012 and A.Y 2010-2011, dated 18.12.2013 are concerned, the time limit within which the said order could have been revised under Sec.263 of the Act has expired on 31.03.2015 P a g e | 28 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 and 31.03.2016. Thus there is merit in the contentions of the ld. A.R that the proceedings u/s 263 of the Act qua the assessment orders under Sec.143(3) for both the years dated 31.12.2012 and 18.12.2013 respectively are barred by limitation whereas the assessments under Sec.153C r.w.s. 143(3) of the Act stand annulled by CIT(A) and cannot be revised under Sec.263 of the Act . We have perused the decisions relied upon by the ld. A.R to sport his arguments on the issue of limitation in case of CIT Vs. Lark Chemical Ltd. (S) and LG. Electronic Pvt. Ltd. VS. Pr. CIT (S). We observe that the Honble High Court of laid down the issue that where the Pr. CIT since the revised the reassessment order passed by the A.O on the issue which were not subject matter of the re-assessment then the period of limitation has to began from the original assessment and not from the date of reassessment in which the item was not deal with by the A.O. In the present case also in the original assessment the issue of allowability of claim under Sec.80IA(4) proviso from Jetty/Port was duly considered this was not the issue in the assessment framed under Sec. 153C r.w.s. 143(3) therefore in our considered opinion the period of limitation has to be recalculated from the date of original assessment and not from the date assessment which is framed under Sec.153C r.w.s. 143(3). Therefore, we are inclined to hold that the order passed on the regular assessment cannot be revised as being time barred by limitation. So far as the wrong exercise of revisionary powers under Sec.263 of the Act are concerned on the ground that necessary conditions for invoking the provisions of Sec. 263 are not fulfilled i.e. the orders which sought to be revised by the Pr. CIT has to be erroneous in so far as which is prejudicial to the interest of the revenue not otherwise. Therefore, in order to exercise of powers u/s 263 of the Act the order has to be erroneous and also prejudicial to the interest of the revenue. Thus, for invoking the Sec.263 both the conditions have been to be satisfied concurrently. The perusal of the records before us reveals that the A.O during the course of original assessment proceedings examined the issue of deduction qua profit from Jetty under Sec. 80IA(4) by raising specific query and the assessee replied the same by furnishing the necessary details which were before the A.O. The ld. A.O after examining the records/replies P a g e | 29 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 /submissions furnished by the assessee rejected the claim qua the rail system under Sec.80IA(4) while the claim under Sec.80IA(4) qua the Jetty/Port was allowed. In the block assessment proceedings also the submissions of the assessee dated 15.12.2011 and 25.06.2012 are placed at page No. 119 to 205 which contained the details qua the claim of deduction by the assessee in respect of profit from jetty. Finally, the A.O framed the assessment under Sec. 143(3) of the Act dated 31.12.2012 allowing the claim of the assessee qua Jetty under Sec.80IA(4) while the claiming for rail system was denied. Similarly in respect of A.Y 2010-11 notice under Sec.142(1) which issued to the assessee calling upon to furnish various details relating to claim under chapter VIA a copy of which is place at Page No. 114 to 119. We have perused the reply of the assessee filed before AO dated 25.02.2013 to the said notice justifying the claim under Sec.80IA in respect of the Jetty a copy of which is placed at paper book pages no. 206 to 212 and the final assessment was framed under Sec.143(3) of the Act dated 18.12.2013 after examining the details submissions made by the assessee allowing the claim under Sec.80IA(4) in respect of the profit from operation and maintenance or Jetty/Port while disallowing the claim of rail system. In the A.Y 2011-12 and 2012-13 the A.O issued notice under Sec. 142(1) dated 24.02.2015 asking the assessee to furnish various details included the one at serial No. 42 qua deduction under Chapter VIA justifying the said claim which the appellant responded vide letter dated 10.08.2015 for A.Y 2011-12 and on 17.12.2015 for A.Y 2012-13 which are placed at paper book at pages no. 213 to 219 and 220 to

225 respectively. It is clear from the above that the claim of the assessee was examined during the original assessment proceedings as well as during the block assessment proceedings and only after considering the replies/ submissions filed by the assessee, the A.O reached to a conclusion of allowing the claim of profit under Sec.80IA(4) qua Jetty. We do not find any merit in the argument of the ld. D.R that there is no application of mind by the A.O and the assessment was framed and the deduction was allowed mechanically especially in view of the fact that A.O has denied the claim of rail system while the deduction in respect of Jetty was allowed under Sec. P a g e | 30 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 80IA(4). In the case of Ocean Sparkle Ltd. Vs. DCIT (Supra) that the Tribunal as held as under: ............Sec. 80-IA (4), inter alia, qualif ies an enterprise engaged in the business of operating and maintaining an infrastructure facility for deduction under the said section and this is exactly the nature of the assessee's business and hence, in our considered opinion, the assessee is eligible for deduction in terms of proviso to section 80-IA(4)(i) of the Act. Hence, we direct the Assessing Officer to compute the deduction allowable under section 80-IA(4) in respect of the profits pertaining to Kakinada Port and Jamnagar Jetty/Port. Considering the ratio laid down by the Tribunal, we are of the considered view that the order passed by the A.O is not erroneous even if it is prejudicial to the interest of the revenue.

17. In our opinion the exercise of power by the Pr. CIT under Sec.263 of the Act on the ground that there was no discussion in the assessment orders in respect of the deduction allowed under Sec. 80IA(4) in respect of profit from operation and maintenance of Jetty/Port. The A.O has raised a query during the assessment proceeding/reassessment proceedings on this specific issue and assessee replied the same by filing necessary details then it is fair to assume that A.O has allowed the claim based upon the technical analysis of the provision of the Act, judicial ruling on the issue and facts of the case including replies of the assessee. Thus, in our view there is due application of mind by the A.O. In the case of CIT vs. Fine Jewellery India Ltd. (Supra) wherein the Honble Bombay High Court has followed Idea Cellular Ltd. Vs. DCIT (2008) 301 ITR 407 by holding that even a query is raise during the assessment proceedings and responded by the assessee, the mere fact that it is not dealt with in the assessment order would not lead to the conclusion that there is no application of mind by the AO. The observations of the court as under: the impugned order of the Tribunal does record the fact that specific queries were made during the assessment proceedings with regard to details of expenditure claimed under the head "miscellaneous expenses" aggregating to Rs. 2.94 crores. The respondent-assessee had responded to the same and on consideration of response of the respondent-assessee, the Assessing Officer held that of an amount of Rs. 17.98 lakhs incurred on account of repairs and maintenance out of Rs. 2.94 cores is capital expenditure. This itself would be indication of application of mind by the Assessing Officer while passing the impugned order. The fact that the assessment order itself does not contain any discussion with regard to the balance amount of expenditure of Rs. 1. 76 crores P a g e | 31 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1

i.e. Rs. 2.94 crores less Rs. 17.98 lakhs claimed as revenue expenditure would not by itself indicate non application of mind to this issue by the Assessing Off icer in v iew of specif ic quer ies made during the assessment proceedings and the Respondent-assessee's response to it. In fact this Court in the case of "Idea Cellular Ltd. v. Dy. C1T[2008] 301 ITR 407" has held that if a query is raised during assessment proceedings and responded to by the Assessee. the mere fact that it is not dealt with in the Assessment Order would not lead to a conclusion that no mind had been applied to it. In the present case also the A.O has raised query which was responded by the assessee during the course of the assessment proceedings by filing necessary information/details and therefore, it could not be said that order is passed by the A.O mechanically without application of mind. Similarly in the case of CIT Vs. Moil Ltd. (supra) the Honble Bombay High Court has held that merely because claim in respect of corporate social responsibility is not discussed in the assessment order , it could not be said that he had passed assessment order without making any enquiry in respect of allowability of such claim and therefore Pr. CIT is not justified in invoking revisionary jurisdiction under Sec.263 of the Act. In the case of Hari Iron Trade Co. Vs. CIT (Supra) the Honble Punjab & Haryana High Court while quashing the order passed under Sec.263 of the Act upheld the view of the A.O on the ground that A.O.s generally do not make mention in the order on the issues which are accepted. The relevant observations of the High Court are as under: a perusal of section 263 shows that the Commissioner can exercise powers under sub-section (1) of section 263 only after examining the record of any proceedings under the Act'. The expression record' has also been defined in clause (b) of the Explanation so as to include all records relating to any proceedings available at the time of examination by the Commissioner. Thus, it was not only the assessment order but the entire record which had to be examined before arriving at a conclusion as to whether the Assessing Officer had examined any issue or not. The assessee had no control over the way an assessment order was drafted. The assessee on its part had produced enough material on record to show that the matter had been discussed in detail by the Assessing Officer. The least that the Tribunal could have done was to refer to the assessment record to verify the contentions of the assessee. Instead of doing that, the Tribunal had merely been swayed by the fact that the Assessing Officer had not mentioned anything in the assessment order. During the course of assessment proceedings, the Assessing Off icer examined numerous issues. Generally, the issues which are accepted do not f ind mention in the assessment order and only such points are taken note of on which the assessee's explanations are rejected and additions/disallowances are made. On examination of the records of the instant case, it was found that the Assessing Officer had made full inquiries before accepting the claim of the assessee and amount on account of discrepancy in stock. Not only that, he had even gone a P a g e | 32 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 step fur ther and appended an of f ice note with the assessment order to explain why the addition for allegation discrepancy in stock was not be ing made. In the absence of any suggestion by the Commissioner as to how the inquiry was not proper, the action taken by him under section 263 could not be upheld. In the case of Idea Cellular Ltd. Vs. DCIT (2008) 301 ITR 407. Honble High Court of Bombay has held that if the A.O has not expressed any opinion regarding the issue in his original assessment order it could not be said that there was any change of opinion in this case. In our view once all the material was placed before the A.O and he chooses not to deal with the several contentions raised by the petitioner in his final assessment order. It cannot be said that he had not applied his mind when all material was placed by the petitioner before him. The ld. DR has tried to distinguish the decisions as relied upon by the ld. A.R which in our opinion is not going to help the revenue in any way as the Honble Courts have very clear held that if the A.O has made an enquiry on the issue and assessee has replied the same presumption is that the A.O after applying his mind allowed the issue even though no discussion has been made in the assessment order. The revisionary proceedings under Sec.263 by the Pr. CIT on this ground also bad in law. We further find that Pr. CIT has set aside the order for fresh verification without concluding as to how the orders passed by the A.O were erroneous while the A.O has examined the issue of claim of deduction under Sec.80IA on the basis of detailed submissions by the assessee. The Delhi High Court in the case of CIT Vs. Gabrial India Ltd. 203 ITR 108, the Honble High Court has held as under: the ITO in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the ITO on being satisfied with the explanation of the assessee. Such decision of the ITO cannot be held to be 'erroneous' simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply asked the ITO to re-examine the matter that, in our opinion, is not permissible. P a g e | 33 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 Even on merits the assessee has fulfilled all the conditions qua the deduction under Sec.80IA in respect of profit from operation and maintenance of Jetty/Port. In the present case before us the assessee has constructed/developed the infrastructure facility of Jetty/Port at Kovaya in the state of Gujarat which is used for inward transportation of raw materials to the cement plant through ships from outside India and also for outward dispatch of cement/clinker from cement plant to various destinations. According to the Pr. CIT the claim of the assessee cannot be accepted on the grounds that main business of the assessee was that cement manufacturing and not developing operating and maintaining the infrastructure facility and thus main source of sale of the assessee is from the sale of cement and the development, operation and maintenance of Jetty is only auxiliary activity to the main business. We do not find any merit in conclusion drawn by the Pr. CIT that tax holiday deduction is not available since as per subsection 5 of 80IA of the Act, deduction is available only to those entities which are in the business of developing operation and maintenance of infrastructure facility of Jetty/Port. The Jetty/Port was developed by the assessee in order to facilitate the transportation of raw materials to the project sight and outward transportation of finished products to various destinations outside India and therefore activity of jetty is auxiliary/supplementary to the main business of the assessee. In our opinion assessee has created the said undertaking for developing operating and maintaining the Jetty for the main segment of the business. The operation and maintenance of Jetty/Port involves the carrying of commercial activity in organized and in a systematic manner as it is comprised of transportation the raw materials to the assessees plant sight and outward transportation of finished product. We find merit in the contentions of the ld. A.R argued that Jetty/Port is constructed for captive operation. Further, the provisions of Sec.80IA(8) of the Act itself contemplates situation where the goods or services are transferred by one undertaking to another undertaking of the assessee or vise versa. The provisions provide that irrespective of value at which these goods and services are recorded in the P a g e | 34 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 books of account of the assessee, for the purpose of allowance of deduction u/s 80IA of the Act to the eligible business, deduction under Sec.80IA would be allowed based on the market value of such goods and services. Thus, section itself has envisaged situation of captive consumption. This view is fortified by the decision in the case of Tata Iron Steel Co. Ltd. 48 ITR

123 whereina similar issue has been considered by the Honble High Court and has held that different segments of the assessee business generate profits and are to be considered for the purpose of taxability. The Honble Court has held that assessee is engaged in the business of extraction of Iron ores and manufacturing steel therefrom as final product which is sold by the assessee as finished product. Under the some statute a cess was leviable on the annual net profit derived from the mining activity. It was contended that since no iron ores extracted was sold to an outsider no profit could be said to have been derived from extraction activities. This argument was advanced based on the principle that no person can make profit out of himself which was negated by the Honble Supreme Court by holding that that despite captive consumption of Iron ores certain profits can be regarded as having been derived from the extraction activities. The Honble Supreme Court ruled in favour of bifurcation of total profit into two activities viz. extraction activity and manufacturing activity. We ,further, find that the facts of the assessee are quite similar to the case of the Ocean Sparkle Vs. DCIT 99 TTJ 582 in which the Hyderabad ITAT bench had held that assessees is eligible of deduction in terms of proviso to Sec. 80IA(4)(i) of the Act. The facts of the case of the assessee are similar to the facts of the case as under : Ocean Sparkle Ltd. (OCL) UltraTech Cement Ltd. (the appellant) Jetty at Jamnagar, Gujarat Jetty at Kovaya, Gujarat Agreement entered with Gujarat Maritime Board Agreement entered with Gujarat Maritime Board OCL is operating & maintaining infrastructure facility The appellant is operating & maintaining infrastructure facility P a g e | 35 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 Not the owner of facility since water fronts are sovereign rights of government Not the owner of facility since water fronts are sovereign rights of Government The contentions of the ld. D.R that that the said case is not applicable to the facts of the assessee case and is distinguishable on the ground that in that case the main business of the assessee was operation and maintenance of Jetty whereas in the case of the assessee the main business was manufacturing cement and sale thereof whereas the operation and maintenance of Jetty was only supportive to the main activity. The provisions of Sec. 80IA(4) prescribed three conditions for the allowing deduction to the assessee namely (i) the enterprise is owned by a company registered in India (ii) it has entered into any agreement with the government of India or state Government or local authority or any other statutory body for developing or operating and maintaining or developing operating maintain a new infrastructure facility and (iii) enterprise has started operation and maintenance the infrastructure facility on and after 01.04.1995. We observe from the records before us that the assessee has fulfilled all the conditions viz. it is owned by the company registered in India. The assessee has entered into an agreement with the Gujarat Maritime Board for developing operating and maintenance infrastructure facility i.e. Jetty/port and lastly it started operating maintaining the said infrastructure facility from May, 1997. Further a perusal of the Sec. 80IA(4) reveal that it does not require the infrastructure facility to be owned by other enterprise developing the such facility or by enterprise operating and maintaining the said facility. The only thing law requires is that enterprise which claims the tax holiday should be owned by the company registered in India and not the infrastructure facility. Thus, we agree with the contention of the ld. A.R that ownership of the infrastructure facility viz. Jetty/Port can under no circumstances vests with the private developers since the water front is sovereign right of government. Further, we find merit in the argument of the ld. A.R that the word it used in subclause a.b and c of clause I sub-section 4 of Sec. 80IA is used to denote the enterprise. In the P a g e | 36 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 case of Patel Engineering Co. Ltd. Vs. DCIT 94 ITD 411, the coordinate bench had held that plain reading of clause (i) makes it clear without any ambiguity that it is any enterprise that could fulfil the condition carrying on the particular type of business specified in the main part of the clause(i) and was also its any enterprise that can o fulfil the other conditions satisfied in sub-clauses a,b and c of the Clause (i) subsection 4 of Sec.80IA. The coordinate bench held that it is only enterprise which could enter into an agreement with the Central Government, state government or any other person and such world It denotes the enterprise and not the infrastructure facility. Therefore, we are of the considered view that it is not necessary for the assessee to own the infrastructure facility in order to claim deduction under Sec.80IA(4) and therefore, we do not agree with the contention of the ld. DR. on this issue.

18. Pr. CIT has also observed that infrastructure facility in the present case should be for the public utility whereas the ld. A.R has argued that the Port/Jetty to be for the public utility is not a prerequisite for claiming deduction under Sec.80IA(4). Further the term infrastructure facility has been amended by the Finance Act 2001. Prior to amendment the infrastructure facility was defined to be:

(i) a road, bridge, airport, port [inland waterways and inland ports,] rail system or any other public facility of a similar nature as may be notified by the Board in this behalf in the Official Gazette. The post amendment infrastructure facility is defined by Finance Act 2001 with effect from 01.04.2002 which does not require the infrastructure facility to be public facility for allowing deduction under Sec.80IA(4). The explanation to Sec.80IA(4) defines the infrastructure facility to mean a road including toll road ,bridge, rail system or port without anything further. After perusing the agreement with the Gujarat maritime board ,we observe that the board has right to use the Jetty/ Port for itself or for traffic being regulated by the board for the purpose of embarking or disembarking their ships/boats etc and it is within rights and ambit of the board to entertain any such request and by making use of existing Jetty/Port can be extended P a g e | 37 ITA No. 2999/Mum/2018 & ors A.Y 2009-10 & ors Ultratech Cement Ltd. Vs Pr. CIT, C-1 accordingly to the third party. Thus, it could be said that the facility is in fact a public utility.

19. Finally, in view of our observations hereinabove and respectfully following the ratio laid down in various decisions, we hold that the exercise of revisionary jurisdiction u/s 263 of the Act by the Pr. CIT is not valid and is hereby quashed. In result all the four appeals of the assessee are allowed. Order pronounced in the open court on 31.10.2018 Sd/- Sd/- (Amarjit Singh) (Rajesh Kumar) Judicial Member Accountant Member Mumbai;
31.10.2018 Ps. Rohit   /Copy of the Order forwarded to :

1. / The Appellant

2.  / The Respondent.

3. () / The CIT(A)-

4.  / CIT

5. , , / DR, ITAT, Mumbai

6.  / Guard file.  //True Copy// / BY ORDER, / (Dy./Asstt. Registrar) , / ITAT, Mumbai