Dismissed

Commissioner of Income Tax v. M/S Suraj Agro Infrastructure

Madras HC21 Jul 2014TCA/888/2013

Case brief

AI extract

What is this about?

Appeal by Revenue against Income Tax Appellate Tribunal order allowing Section 80IA deduction for infrastructure operations. High Court held no substantial question of law arises as assessee complied with conditions applicable for the specific assessment years.

What did the court decide?

No question of law arises; appeals dismissed with no costs.

Commissioner of Income Tax Vs M/S Suraj Agro… — Company and Corporate | Madras HC (2014)

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In the High Court of Judicature at Madras

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Dated: 21.07.2014

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Coram

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The Honourable Mr.JUSTICE R.SUDHAKAR and

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The Honourable Mr.JUSTICE G.M.AKBAR ALI

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Tax Case (Appeal) Nos.888 and 889 of 2013 & M.P.No.1 of 2013

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Commissioner of Income-tax, Coimbatore.

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M/s.Suraj Agro Infrastructure (India) P. Ltd., (formerly M/s.Dolphin Constructions Pvt. Ltd.) 86-A, West Periaswamy Road, R.S.Puram, Coimbatore - 641 002.

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APPEALs under Section 260A of the Income Tax Act against the order dated 18.2.2013 made in I.T.A.Nos.2027 & 2030/Mds/2012 on the file of the Income Tax Appellate Tribunal, Madras 'D' Bench for the assessment years 2006-07 and 2009-10 as against the order of the Commissioner of Income Tax (Appeals)-I, Coimbatore order dated 03.08.2012 made in Appeal No.178/11-12 and 179/11-12 for the Assessment years 2006-2007 & 2009-2010 against the order of Deputy commissioner of Income- Tax company Circle-I (3) Coimbatore for the assessment year 2006-2007, and 2009-10, dated 12.12.2011 respectively in PA.No.AABCV2793D.

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For Appellant : Mr.N.V.Balaji, Standing Counsel for Income Tax

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The above Tax Case (Appeals) are filed at the instance of the Revenue as against the order of the Income Tax Appellate Tribunal for the assessment years 2006-07 and 2009-10 raising the following substantial question of law:

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"Whether under the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the assessee is entitled for deduction under Section 80IA?"

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https://hcservices.ecourts.gov.in/hcservices/

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The respondent/assessee is a Private Limited Company engaged in the business of inland storage facility operation at various ports. For the assessment years 2006-07 and 2009-10, the assessee filed return of income claiming deduction under Section 80IA of the Income Tax Act. The assessee had opted assessment year 2000-01 as initial assessment year for claiming benefit under Section 80IA of the Income Tax Act. As per Section 80IA, the assessee was required to transfer the infrastructure facility to the Central Government, State Government or such other statutory body within the period stipulated in the agreement. The Assessing Officer, while completing assessment under Section 143(3) of the Income Tax Act disallowed the claim for deduction under Section 80IA on the ground that the assessee did not transfer the asset to the Government as required under Section 80IA (4). The Assessing Officer also held that Circular No.793 dated 23.6.2000, wherein it was held that infrastructure has to be transferred, was applicable for the assessment year 2001-02, even if the project had commenced prior to assessment year 2001-02. Hence, the Assessing Officer disallowed the deduction under Section 80IA of the Income Tax Act.

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Aggrieved by the said order, the assessee preferred appeals before the Commissioner of Income Tax (Appeals), who allowed the appeals holding that the amendment brought by Finance Act, 2001 read with Circular No.10 of 2005 was applicable from assessment year 200203 and there was no specific mention that the amendment was applicable only for projects which commenced operation from assessment year 200203.

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Aggrieved by the said order, the Revenue preferred appeals before the Income Tax Appellate Tribunal. The Tribunal, by a common order, dismissed the appeals holding that the Commissioner of Income Tax (Appeals) was clear that the assessee had complied with the provisions of Section 80IA(4) of the Income Tax Act. The Tribunal also held that as per the lease agreement between the assessee and the Visakhapatnam Port Trust Authorities, any time the Port Trust can repossess the entire infrastructure facility and the assessee has an obligation to transfer the facility to the Port Trust Authorities on such compensation as may be determined by the Authorities.

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As against the order of the Income Tax Appellate Tribunal, the Revenue has preferred the above Tax Case (Appeals) raising the abovementioned substantial question of law.

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Heard learned Standing Counsel appearing for the appellant and perused the materials placed before this Court.

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A perusal of the order of the Tribunal shows that the assessee had complied with the provisions of Section 80IA(4) of the Income Tax Act in the initial assessment year i.e., 2000-01 as well as for the assessment years 2006-07 and 2009-10. We find no error in the order of the Tribunal or that of the Commissioner of Income Tax (Appeals), as the benefit sought for by the respondent/assessee in terms of Section 80IA(4) during the relevant period 2000-01 did not impose a https://hcservices.ecourts.gov.in/hcservices/

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condition with regard to transfer of infrastructure development facility, which is evident from the order of the Commissioner of Income Tax (Appeals), as extracted in the order of the Tribunal, which reads as follows:

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"It is to be noted here that Circular No.793 was issued on 23.06.2000 and is applicable from the assessment year 2001-02. As submitted by the appellant, the appellant has claimed deduction under Section 80IA for the first time for the assessment year 2000-01. Circular No.793 is not applicable for the assessment year 2000-01. As per the provisions of Section 80IA as it existed for the assessment year 2000-01, the following are the conditions required to be fulfilled by an enterprise to be eligible for deduction u/s.80IA(4)

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i) Enterprise is owned by a company registered in India.

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ii) Enterprise has entered into an agreement with Central Government or State Government or a local authority or any other statutory body for developing, maintaining and operating infrastructure facility subject to the condition that such infrastructure facility be transferred to Government, local or statutory authorities within the period stipulated in the agreement.

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iii) it has started or starts operating and maintaining the infrastructure on or after 1.4.1995."

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It is to be noted that the Assessing Officer at the relevant point of time had accepted the plea of the assessee and the benefit was extended from 2000-01 onwards. The assessment years in dispute are 2006-07 and 2009-10. We find that Circular No.793 dated 23.6.2000 and the subsequent amendment made to Section 80IA with effect from 1.4.2002 will have no effect in so far as the present assessee is concerned as there is no specific provision for making the amendment made applicable retrospectively to the respondent/assessee.

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It is not disputed by the Department that the initial claim made by assessee after complying with the provisions of Section 80IA (4)(b) of the Income Tax Act for the assessment year 2000-01, was allowed by the Assessing Officer. The Circular No.793 dated 23.6.2000 was applicable from the assessment year 2001-02 onwards. Thereafter, the CBDT issued another circular No.10 of 2005 dated 16.12.2005 withdrawing the condition of transfer of assets to the Central Government, State Government or the Local Authority. In any event, when there is an agreement between the assessee and the Visakhapatnam Port Trust Authorities that any time the Port Trust can repossess the entire infrastructure facility and the assessee has an obligation to https://hcservices.ecourts.gov.in/hcservices/

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transfer the facility to the Port Trust Authorities on such compensation as may be determined by the Authorities, the assessee is entitled for deduction under Section 80IA of the Income Tax Act.

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Hence, we find no question of law, much less substantial question of law arises for consideration in these appeals. Accordingly, both the Tax Case (Appeals) are dismissed. No costs. Consequently, M.P.No.1 of 2013 is closed.

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Sd/-

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Assistant Registrar(CO) Dated: 05.08.2014

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//True Copy//
Sub Assistant Registrar
sl
To
1. The Deputy Registrar/Assistant Registrar,
Income Tax Appellate Tribunal, Madras 'D' Bench
2. The Commissioner of Income Tax (Appeals)-I, Coimbatore.
2a. The Commissioner of Income Tax, Coimbatore.
3. The Deputy Commissioner of Income-tax, Company Circle-I(3),
Coimbatore.
+ 1 cc to Mr.N.V.Balaji, Advocate SR.32147
T.C.(A) Nos.888 and 889 of 2013
& M.P.No.1 of 2013
NM(CO)
Eu 13.08.14

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https://hcservices.ecourts.gov.in/hcservices/

Commissioner of Income Tax v. M/S Suraj Agro Infrastructure

Case brief

What is this about?

What did the court decide?

Commissioner of Income Tax v. M/S Suraj Agro Infrastructure

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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