Dcit Cir 35 Kolkata Kolkata v. M S Kolkata Port Trust Kolkata

1 Ita Nos 997 998 Kol 2016 Kolkata Port Trust Ays 2005 06 2011 12 C In The Income Tax Appellate Tribunal C Bench Kol Kata Before And Before Shri J Sudhakar Reddy Am Shri A T Va Rkey Jm I T A Nos 997 998 Kol 2016 Assessment Years 2005 06 2011 12 Deputy Commissioner Of Income Tax Circle 35 Kolkata Vs M S Kolkata Port Trust Pan Aaajk 0361 L Appellant Respondent Date Of Hearing 14 12 2017 Date Of Pronouncement 21 12 2017 For The Assessee Shri G Mallikarjuna Cit Dr For The Revenue Mrs Saheli Dutt Osd Taxation Order Per Shri A T Varkey Jm Both These Appeals Filed By The Revenue Against The Separate Orders Of Ld Cit A 10 Kolkata Dated 02 02 2016 For Ays 2005 06 And 2011 12 2 The Only Issue To Be Decided In Both The Appeal S Of The Revenue Is That Whether The Assessee Port Trust Can Be Assessed In The Status O F Local Authority Or In The Status Of Company In The Facts And Circumstances Of The Cas E 3 At The Outset Itself The Ld Ar Brought To Our Notice That For Ays 2003 04 To 2005 06 In Ita No 2628 To 2630 Kol 2013 Preferred By Th E Assessee Port Trust And In Ita Nos 2868 To 2870 Kol 2013 For Ays 2003 04 To 2005 06 Pr Eferred By The Department The Same Issue Arose And The Tribunal Was Pleased To Hold Th At The Assessee Port Trust Has To Be Assessed As A Local Authority And Not In The Stat Us Of The Company On The Other Hand Ld Dr Submitted The Following I The Ministry Of Shipping Guidance Note Provides That The Format Of Financial Statement Prescribed By The Indian Companies Act 1 956 Has Been Used As The Basis For Developing The Accounting Format Of Port Trusts Tog Ether With The Requirement Of Accounting 2 Ita Nos 997 998 Kol 2016 Kolkata Port Trust Ays 2005 06 2011 12 Standards Vide Ministry Of Shipping Ports Wing L Etter No Pr 20021 2 98 Pg Dated 6 11 2002 Ii The Port Trust Thus Follows Accrual System Of A Ccounting And The Identification Of Revenue And Expenditure Is Based On The Principles Of The Companies Act Iii Ld Cit A Has Erred In Admitting The Submiss Ion Of Assessee That Under 2 17 Ii Of The Said Act Only Those Body Corporate Are Conside Red As A Company Which Are Incorporated By Or Under The Laws Of A Country Outs Ide India Which Condition Is Obviously Not Satisfied By The Appellant Therein Iv We Would Like To The Highlight The Fact That Ap Pellant Has Only Produced Half Baked Fact As Per The Original Argument Forwarded By The A O It Was Explained That Section 2 26 I Of The Income Tax Act 1961 States That Company Also Means Any Indian Company And When Read With The Section 2 26 Ia Which States That Indian Company Means A Company Forms And Registered Under The Companies Act 1956 A Nd Includes A Corporation Established By Or Under A Central State Or Provincial Act Whi Ch Obviously Is The Case With Kolkata Port Trust V Kolkata Port Trust Is Reshaped And Continued Und Er Major Port Trusts Act 1963 Which Had Come Into Force On Such Date 1 As The Central Government May By Notification In The Official Gazette Appoint Vi We Would Also Like To Highlight That Kolkata Po Rt Trust Works As A Company And Major Criteria As Given In Companies Act 1956 Is Satisfi Ed In Its Form Structure And Functioning Vii In This Regard Govt Of India Has Already Made Efforts Steps Has Already Been Taken For Corporatization Of Jnpt New Mangalore And Tuticori N Port Trusts Viz Registering With Jurisdictional Registrar Of Companies Viii Accordingly In October 1996 Policy Guideline S Were Issued Which Provided For Private Sector Participation Investment In The Many Areas As A Further Step Towards Securing Private Participation Policy Guidelines Were Issued In 199 7 To Enable The Major Ports To Set Up Joint Ventures With Foreign Ports Minor Ports Or Private Companies The Major Port Trust Act Was Amended To Give Effect To The Guidelines Issued In 1996 And 1997 Ix On The Above Line Kolkata Port Trust Has Also S Et Up Different Joint Ventures E G Haldia Bulk Terminals A Joint Venture Of Abg Infra Logist Ics And Loa This Is In Tune With Kopt Working As A Company Berth No 12 At Hdc Of Kolka Ta Port Was Allotted On 30 1 2002 To A Private Operator Viz Mls Tata Martrade Internati Onal Logistic Ltd Tmill A Joint 3 Ita Nos 997 998 Kol 2016 Kolkata Port Trust Ays 2005 06 2011 12 Venture Of M S Tata Steel And A Holding Co Of Com Pany For A Period Of 30 Years For Its Operation Management And Maintenance X Recognizing That Port Operations Cannot Be Made Efficient Or Cost Effective Unless Ports Were Encouraged To Operate On Commercial Lines The Government Port Restructuring In India As Part Of The 1996 Policy Guidelines Subst Antially Increased The Financial And Other Powers Of The Port Trusts Xi The Government Of India Also Took A Decision Th At All New Ports Will Be Set Up As Companies Under The Indian Companies Act And The Ex Isting Port Trusts Will Also Be Gradually Corporatized And Set Up As Companies Act Ion Has Also Been Initiated To Corporatize The Jawaharlal Nehru Port Trust Jnpt And The Hald Ia Port Which Are Among The Newer Of The Major Ports Xii Appellant In His Submission Has Also Mentioned This Fact That The Assessee Port Trust Has Not Been Corporatized Till Date Xiii In Continuation With The Above Arguments We Would Like To Bring To The Notice To The Appellate Authority That Endlessly Non Acceptance O F An Agreed And Realistic Position As Proved By The Govt Of India Does Not Make The Asses See Free From The Burden Of Realizing The Consequential Remedies And Action Taken In This Reg Ard It May Continue To Withheld Its Current Position And Deny The Tax Consequences And Prolong With Tax Avoidance Which Certainly Negates The Basic Spirit Of Law And Relat Ed Rules Xiv Appellant Has Simply Ignored The Main Argument Highlighted By Honble Supreme Court In The R C Jain Case Supra That We Finally Come To The Important Question Whether The Legislature Has Vested Any Power Of Taxation In The Authority One Of The Submissions Of The Le Arned Counsel For The Respondent Was That The Fund Of The Authority Required To Be Maintained By Sec 23 Of The Delhi Development Act Was Not A Local Fund As No Part Of It Flowed Directly From Any Taxi Ng Power Vested In The Delhi Development Authority The Submission Of The Learned Counsel Wa S That The Fees Collected Under Sec 12 Of The Act And The Charges Levied Under Sec 37 Of The Act Did Not Part Take The Character Of Tax But Were Mere Fees Which Were The Quid Pro Quo For The Services W Hich Were Required To Be Performed By The Delhi Development Authority Under The Act We Were Referr Ed To Hingir Rampur Coal Co Ltd Ors V The State Of Orissa Ors We Are Unable To Agree Wi Th The Submission Made On Behalf Of The Respondents In The First Place When It Is Said Tha T One Of The Attributes Of A Local Authority Is The Power To Raise Funds By The Method Of Taxation Tax Ation Is To Be Understood Not In Any Fine And Narrow Sense As To Include Only Those Compulsory Ex Actions Of Money Imposed For Public Purpose And Requiring No Consideration To Sustain It But I N A Broad Generic Sense As To Also Include Fees Levied Essentially For Services Rendered It Is Now Well Recognised That There Is No Generic Differenc E Between A Tax And A Fee Both Are Compulsory Exacti Ons Of Money By Public Authority In Deciding The Question Whether An Authority Is A Local Author Ity Our Concern Is Only To Find Out Whether The Public Authority Is Authorised By Statute To Make A Compulsory Exaction Of Money 4 Ita Nos 997 998 Kol 2016 Kolkata Port Trust Ays 2005 06 2011 12 On The Above Proposition Kolkata Port Trust For Obv Ious Reason Cannot Be Regarded As A Local Authority As It Has Not Right To Impose Tax Of Any Kind And Use That For Public Purpose But Only To Exact Fees And Charges That Too For Commercial Benefit 4 However We Are Not Persuaded To Accept The Afor Esaid Contention Of The Ld Dr Because By Reasoned Order Of The Co Ordinate Bench Cited Supra We Are Not Inclined To Take A Different View We Also Note That The Ao Has Acc Epted The Status Of The Assessee Port Trust As A Local Authority In The Recently Concluded Sc Rutiny Assessment For Ay 2012 13 U S 143 3 Of The Act Dated 28 03 2015 We Find That A Ll The Port Trusts Such As Chennai Port Trust Marmagao Port Trust New Mangalore Port Trus T Cochin Port Trust And Vishakapatnam Port Trust Are Being Assessed To Inco Me Tax As Local Authority Taking Note Of The Aforesaid Facts And The Coordinate Benc H Decision In Assessees Own Case On The Issue In Hand Respectfully Following The Same Cite D Supra We Uphold The Impugned Order Of Ld Cit A Therefore We Do Not Find Any Merit In The Appeal Preferred By The Revenue So It Stands Dismissed 5 In The Result Appeal Revenue Is Dismissed Order Is Pronounced In The Open Court On 21st Dece Mber 2017 Sd Sd J Sudhakar Reddy Aby T Varkey Accountant Member Judicial Member Dated 21st December 2017 Jd Sr P S Copy Of The Order Forwarded To 1 Appellant Dcit Circle 35 Kolkata 2 Respondent M S Kolkata Port Trust 15 Strand Road Kolkata 1 3 The Cit A Kolkata 4 5 Cit Kolkata Dr Guwahati Bench Guwahati True Copy By Order Sr Pvt Secretary