9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (2) TMI 36 - HC - Income TaxDeduction u/s 80IA - cargo handling contract entered into with BIAL by assessee - agreement with a statutory body - Whether contract is with statutory body satisfying condition set forth in section 80IA(4) when BIAL is only a Company whose motive only making profit and is only a instrument of State? - HELD THAT - Every contractor may not be a developer but every developer developing infrastructure facility on behalf of the Government is a contractor. In CHETTINAD LIGNITE TRANSPORT SERVICES P. LTD 2019 (4) TMI 684 - MADRAS HIGH COURT it has been held that proviso intends to extend the benefit of deduction under Section 80IA of the Act even to a transferee or a contractor who is approved and recognized by the concerned authority and undertakes the work of development of infrastructure facility or only operates or maintains the same. In view of aforesaid enunciation of law it has rightly been concluded by the Appellate Authority that the assessee is engaged in development operation and maintenance of an infrastructure facility in the light of provisions of SPRH agreement. The aforesaid finding has been affirmed in appeal by the Tribunal. The aforesaid findings are concurrent findings of fact which do not suffer from any perversity. Revenue was unable to point out any perversity in the findings of fact recorded by the Commissioner of Income Tax (Appeals) as well as by the Tribunal. It is well settled in law that the concurrent findings of fact do not suffer from any perversity warranting interference of this court in exercise of powers under Section 260A of the Act. SEE SYEDA RAHIMUNNISA VS. MALAN BI BY L.RS. AND ORS. 2016 (10) TMI 1233 - SUPREME COURT and PRINCIPAL COMMISSIONER OF INCOME TAX BANGALORE ORS. VS. SOFTBRANDS INDIA P. LTD. 2018 (6) TMI 1327 - KARNATAKA HIGH COURT - Decided in favour of the assessee.
Issues Involved:
1. Whether the Tribunal was justified in holding that the cargo handling contract entered into with BIAL by the assessee is with a statutory body satisfying the condition set forth in Section 80IA(4) of the Income Tax Act. 2. Whether the Tribunal was justified in holding that the assessee is eligible for deduction under Section 80IA(4) despite not entering into an agreement with a "statutory body" as required by the provisions of Section 80IA(4). 3. Whether the Tribunal was justified in holding that the cargo handling on contract by the assessee is equivalent to the development, operation, and maintenance of an infrastructure facility as defined in Section 80IA(4). Detailed Analysis: Issue 1: Agreement with a Statutory Body The Tribunal initially held that BIAL is not a statutory body, which was a condition for the deduction under Section 80IA(4). However, the assessee filed a miscellaneous petition under Section 254(2) of the Act, citing a previous High Court decision in M/s. Flamingo Dutyfree Shops Pvt. Ltd., which declared BIAL a statutory body under Article 12 of the Constitution of India. The Tribunal reconsidered and aligned with this decision, recognizing BIAL as a statutory body. The High Court affirmed this view, noting that the Special Leave Petition against the Flamingo Dutyfree Shops decision was disposed of, leaving the High Court's decision intact. Therefore, the assessee met the condition of entering into an agreement with a statutory body. Issue 2: Eligibility for Deduction under Section 80IA(4) The assessee claimed a deduction under Section 80IA(4), which was initially denied by the Assessing Officer on the grounds that the agreement was not with a statutory body and that the cargo handling facility did not qualify as an infrastructure facility. The Commissioner of Income Tax (Appeals) reversed this decision, stating that BIAL is a statutory body and the cargo handling facility is part of the airport infrastructure. The Tribunal, after reconsideration, upheld this view, and the High Court confirmed that the assessee complied with the necessary conditions for the deduction, as BIAL is recognized as a statutory body. Issue 3: Cargo Handling as Infrastructure Development The Commissioner of Income Tax (Appeals) and the Tribunal both concluded that the cargo handling services provided by the assessee are integral to the airport's operations and thus qualify as infrastructure development under Section 80IA(4). The SPRH agreement granted the assessee the right to design, construct, finance, test, commission, manage, and operate the facility for 20 years on a build-operate-transfer basis. The High Court noted that these findings were based on a meticulous appreciation of evidence and did not suffer from any perversity. The court referenced the decision in Chettinad Lignite Transport Services P. Ltd., which supported the view that contractors developing infrastructure on behalf of the government could qualify for deductions under Section 80IA. Conclusion: The High Court dismissed the appeals filed by the revenue, affirming that the assessee met the conditions for deduction under Section 80IA(4) by entering into an agreement with a statutory body (BIAL) and engaging in the development, operation, and maintenance of an infrastructure facility (cargo handling services at the airport). The substantial questions of law were answered against the revenue and in favor of the assessee.
|
