Commissioner Of Income Tax v. M/S.chettinad Lignite Transport Servicesprivate Limited

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 3.4.2019 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE C.V.KARTHIKEYAN Tax Case Appeal No.446 of 2017 Commissioner of Income Tax,63, Race Course Road,Coimbatore. Vs. M/s.Chettinad Lignite Transport ServicesPrivate Limited, 43, Race Course Road,Coimbatore - 641 018. PAN: Respondent/Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the orders of the Income Tax Appellate Tribunal,Madras 'B' Bench, Chennai, dated 30.12.2016 made in ITANo.2446/Mds/2016 against the order of the Commissioner of IncomeTax (appeals I) Coimbatore dated 27.05.2016 and made in AppealNo. 65/15-16 and against the assessment order dated 20.03.2015passed by the Additional commissioner of Income tax, CorporateRange, Coimbatore for the assessment year 2012-2013. For Appellant: M/s.T.R.Senthilkumar Sr. Standing Counsel assisted by Ms.K.G.Usharani The Revenue has filed this Appeal under Section 260-A of theIncome Tax Act, 1961, raising the following substantialquestions of law arising from the order of the learned Tribunaldated 30.12.2016, whereby the learned Tribunal allowed theAppeal for the Assessment Year 2012-2013 and held that the https://hcservices.ecourts.gov.in/hcservices/ Assessee is entitled to the benefit of deduction under Section80IA of the Act:- "i) Whether the Income Tax Appellate Tribunalwas right in holding that the Assessee iseligible for deduction under Section 80IAthough the Assessee did not fulfil thecondition laid down in Section 80IA(4) ofhaving a contract with any Government/Authorityreferred to in that section, when the assesseeis only a Works Contractor?ii)Whether the Income Tax Appellate Tribunalwas right in holding that the Assessee iseligible for deduction under Section 80IA,without examining the effect of explanationinserted at the end of the section by FinanceAct 2007 with retrospective effect from1.4.2000 which was also substituted by Finance(No.2) Act 2009 with retrospective effect from 1.4.2000. iii) Whether the Income Tax Appellate Tribunalwas right in holding that the Assessee iseligible for deduction under Section 80IA, theAssessee did not satisfy proviso to Section80IA(4) inasmuch as there is no transfer ofinfrastructure facility?" 2. Learned counsels appearing for the parties brought to ournotice that the controversy involved in the present Appeal iscovered by the Judgment of this court dated 6.3.2019 in the caseof the same Assessee in T.C.A.Nos.741, 1266 of 2009 and 162 of2015 wherein this court has has held as under:- " 8. From a reading of the aforesaid Provisos toSection 80IA(4), it is clear that the Legislatureintended to extend the said benefit under Section80IA of the Act to an enterprise involved in (i)developing or; (ii) operating and maintaining or;(iii) developing, operating and maintaining anyinfrastructure facility. The term "infrastructurefacility" has been defined in the Explanation andthe same includes a toll road, a bridge or a railsystem, a highway project, etc. These are,obviously, big infrastructure facilities for whichthe enterprise in question should enter into acontract with the Central Government or StateGovernment or Local Authority. However, the Provisointends to extend the benefit of the said deductionunder Section 80IA of the Act even to a transfereeor a contractor who is approved and recognised bythe concerned authority and undertakes the work ofthe said development of infrastructure facility or only operating or maintaining the same. The Provisoto sub-section (4) stipulates that subject to thefulfillment of conditions, the transferee will beentitled to the said benefit, as if the transfer inquestion had not taken place. It has been found bythe Assessing Authority himself, in the presentcase, that the present Assessee Mis. ChettinadLignite Transport Services Private Limited under anAgreement dated 16.04.2002, captioned as LigniteTransport System with Mls.ST-CMS Electric CompanyPrivate Limited, had undertaken the work ofdeveloping the said railway sidings and wasoperating and maintaining the same. The only groundon which, the Assessing Authority denied the saidbenefit was that the Assessee himself did notenter into any such contract with the Railways orwith the Central Government. 9. The learned Tribunal, however, in ouropinion, rightly applied the Proviso to Section 80IA(4) of the Act and held that since the Assessee wasrecognised as contractor for these railway sidings,which undoubtedly fell under. the definition of"infrastructure facility", it was entitled to thesaid benefit under Section 80IA of the Act. Thegrounds on which the Assessing Authority denied thesaid benefit to the Asessee ignoring the effectof Provisos to Section 80IA(4), therefore, couldnot be sustained. The learned Tribunal, in ouropinion, has rightly held that the Proviso does notrequire that there should be a direct agreementbetween the transferee enterprise and the specifiedauthority for availing the benefit under Section80IA of the Act. There is no dispute before usthat the Assessee was duly recognised astransferee or assignee of the principalcontractor M/s.ST-CMS Company Private Limited andwas duly so recognised by the Railways to operateand maintain the said railway sidings at Vadalurand Uthangalmangalam Railway Stations. The findingsof fact with regard to the said positionrecorded by the learned Tribunal are, therefore,unassailable and that clearly attracted the firstProviso to Section 80IA(4) of the Act. 10. The learned counsel for the Revenue reliedupon a decision of this Court in the case ofM/s.Covanta Samalpatti Operating Private Limited,Chennai-20 v. The Assistant Commissioner of IncomeTax, Company Circle I (3), Chennai-34, reported in(2018) 93 Taxmann 38. In the said case, the claim ofthe Assessee company, which was engaged_in power 10. The learned counsel for the Revenue reliedupon a decision of this Court in the case ofM/s.Covanta Samalpatti Operating Private Limited,Chennai-20 v. The Assistant Commissioner of IncomeTax, Company Circle I (3), Chennai-34, reported in(2018) 93 Taxmann 38. In the said case, the claim ofthe Assessee company, which was engaged_in power generation, for deduction under Section 80IA of theAct was denied by the Revenue on the ground that theAssessee Undertaking had not been set up forgeneration and distribution of power and that theAssessee was only a contractor for the maintenancework of power plant, which was owned by SamalpattiPower Corporation Private Limited (SPCL). On thesefacts, the Court held that the Assessee was notentitled to deduction under Section 80IA of the Act.We do not find any parity of facts of the said casewith the facts available before us. The powergenerating companies are entitled to deduction underSection 80IA of the Act in different sub clausesviz., under Section 80IA(4)(iv) of the Act. Wherethere is no such Proviso, as is available in clause(i) of Section 80IA(4) of the Act, which deals withdeduction to enterprise involved in developing,operating and maintaining the infrastructurefacilities. Obviously, if the Assessee is gettingonly fees for the maintenance of certain powergenerating plant, as was the case before the Co-ordinate Bench of this Court in Covanta case(supra), he may not be entitled to such deduction,but the fact situation before us is entirelydifferent and, therefore, we do not find any supportfrom the said case cited by the learned counsel forthe Revenue.11. We are, therefore, of the consideredopinion that there is no merit in these appealsfiled by the Revenue and the questions of law framedabove deserve to be answered in favour of theAsessee and against the Revenue. We hereby do so.The appeals preferred by the Revenue deserve to bedismissed and accordingly, the same are dismissed.No costs." 3.The present Appeal deserves to be disposed of in the same terms. Accordingly, it is dismissed. No order as to costs. s/d- Assistant Registrar Sub-Assistant Registrar True Copy ssk. https://hcservices.ecourts.gov.in/hcservices/ To 1. The Registrar, Income Tax Appellate Tribunal, Madras "B" Bench , Chennai. Income Tax Appellate Tribunal, Madras "B" Bench , Chennai. 2. Commissioner of Income Tax,(Appeals I) Coimbatore. Coimbatore. 3. The Assistant Commissioner of Income-tax, Company Circle-1(I), Coimbatore. Company Circle-1(I), Coimbatore. 4.The Additional Commissioner of Income TaxCorporate Range, Coimbatore +1 CC to M/s. Subbaraya Aiyar, Advocate sr 32367. +1 CC to Mr.T.R.Senthil Kumar, Advocate sr 32371. T.C.(A) No.446 of 2017 RK(CO)SP(12/06/2019)