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TMI Blog2017 (4) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... int Venture company that is owned by a consortium of companies; (iii) The Appellant has entered into an Operation & Maintenance Agreement for operating and maintaining the air cargo terminal at the Airport and the said arrangement has not only been admittedly approved by the Ministry of Civil Aviation ('MoCA') but also necessary security clearance has been given by the Bureau of Civil Aviation Security which is part of Civil Aviation Ministry, and the approval of Ministry of Civil Aviation (MoCA) is to be read in reference to the Agreement entered into between the Concessionaire and the Appellant; (iv) The O&M Agreement entered into between the Appellant and the Concessionaire (airport operator) is deemed to have been entered by the Appellant company with the Government of India; (v) The O&M Agreement entered into with Concessionaire is coterminus with the terms of the Concession Agreement entered into. by the Concessionaire (the Airport operator) with the Government of India and, therefore the O&M Agreement is incidental to the main Concession Agreement; (vi) In view of proviso to sub-section (4 )(i) of Section 80-IA where infrastructure facility, being the buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs admitting income after claiming deduction under section 80IA(4) of the Act. The returns were initially processed under section 143(1) of the Act. Subsequently, the assessments were taken-up for scrutiny through CASS and accordingly, notices were issued and served on the assessee. The assessee appeared through its Authorised Representative and furnished the information called for. 3. During the course of hearing, the Assessing Officer issued a letter dated 28.11.2011 requiring the assessee to explain as to why the deduction claimed under section 80IA(4) should not be disallowed. In response thereto, the assessee filed a reply on 21.12.2011 stating that the assessee is a company registered in India and has entered into an agreement with GHIAL ("GMR Hyderabad International Airport Limited") for operating and maintaining the cargo facilities at Hyderabad International Airport. It was submitted that though GHIAL is not a Government body, the Government of India has granted a right to GHIAL to assign certain business activities to other service providers and therefore, GHIAL, has granted further concession to the assessee along by sub-leasing part of the infrastructure facility to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer and the assessee is in second appeal before us. 5. The Learned Counsel for the assessee, while reiterating the submissions made by the assessee before the authorities below, has advanced the following arguments in support of the assessee's claim of deduction under section 80IA(4) of the Act. (1) According to the proviso to section 80IA(4)(b), the agreement of GHIAL with the Government of India is sufficient compliance of the provision and a separate and independent agreement by the assessee with the Governments is not necessary; (2) Without prejudice to the above, GMR International Airport is a statutory body; and (3) Without prejudice to the above, approvals received from various other departments of the Government itself constitutes the agreement with the Government of India. 5.1. In support of the above propositions, the Learned Counsel for the assessee, drew our attention to the concession agreement between the Ministry of Civil Aviation, Government of India and Hyderabad International Airport, Hyderabad Ltd., ("HIAL"), wherein the HIAL has been granted the exclusive right and privilege to carry-out the development, design, financing, construction, commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te along with a right to sub-lease, license etc. 5.3. He submitted that GHIAL has not claimed any deduction under section 80IA(4) as it has not earned any profits during the years. It was further submitted that the assessee earned income from Cargo operations and the operating expenditure includes the concessionaire fee and concessionaire rent paid to GHIAL and has drawn our attention to the relevant entries in its books i.e., P & L A/c and Schedule-L thereto. 5.4. In addition to the above submissions on facts, the Learned Counsel for the assessee, has also placed reliance on the decision of the Coordinate Bench of this Tribunal in the case of Ocean Sparkle Ltd., reported in (2006) 155 taxmann 133 (Hyd) (NAG) for the proposition that since GHIAL has been authorised to assign certain functions and has accordingly entered into the agreement with the assessee for operation and maintenance of the cargo facility at Hyderabad International Airport, under the proviso to section 80IA(4)(i), the assessee is entitled to claim the deduction. Further, as regards the meaning of the term 'transfer' used in the said proviso also, the Learned Counsel for the assessee relied upon the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not eligible to the claim of deduction under section 80IA(4) as the conditions set-out therein are not fulfilled by the assessee. As regards the applicability of the decision of the Coordinate Bench in the case of Ocean Sparkle Ltd., (cited (supra) he submitted that the said case is factually distinguishable from the facts of the case before us. Further, he submitted that subleased contractors cannot be regarded as eligible for deduction under section 80IA(4) of the Act. 6.1. As regards the contention of the assessee that since the assessee has received approval from various Government departments to operate and maintain the Cargo facility, it should be considered as having entered into an agreement with the Government of India itself, the Ld. D.R. submitted that the approvals given by various departments of the Government i.e., Customs Authorities etc., is only for carrying on the functions effectively, but cannot be deemed to have given the approval for the purposes of deduction under section 80IA(4) of the Act. Thus, according to him, the orders of the authorities below have to be confirmed. 7. Having regard to the rival contentions and the material on record, we find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or navigational channel in the sea; 7.1. From a literal reading of the above provision, it is clear that the deduction is allowable not only for development of a infrastructure facility, but is also allowable in case of operating and maintaining or developing, operating and maintaining an infrastructure facility. In the case before us, the Assessing Officer and the CIT(A) have held that the assessee has not created any new infrastructure facility but is only doing the operation on the existing leased infrastructure facility developed by GHIAL. Therefore, it is now necessary to see whether the Cargo facility being operated and maintained by the assessee is an 'infrastructure facility' within the meaning of section 80IA(4) of the Act. 7.2. GHIAL has developed the Rajiv Gandhi International Airport at Hyderabad. Cargo handling facility is an integral part of the Airport. GHIAL has assigned the operation and maintenance of the Cargo facility to the assessee. Vide Facility Lease Agreement, Menzies has agreed to own, procure, install and commission the facilities and the Additional Facilities (if any) at the Cargo Building and to lease the Facilities and Additional Facilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng as per the specification of the Menzies and Menzies has provided the facilities at the cargo building and while GHIAL has leased out the cargo terminal to the assessee, Menzies has leased the facilities to the assessee and it is the responsibility of the assessee to operate and maintain the cargo facility in accordance with the obligation of GHIAL to operate and maintain the facility by virtue of the concession granted by the Govt. of India. Each assessee is eligible to claim deduction u/s 80IA(4)(i) of the Act only in relation to the activity carried on by it and there cannot be any duplication of the claim. Therefore, we are of the opinion that the 'Cargo facility' operated and maintained by the assessee is infrastructure facility eligible for deduction u/s 80IA(4) of the Act. 7.5. The second objection of the Revenue is that the assessee has not entered into any agreement with the Central Govt., or State Govt. or local authority or a statutory body as provided u/s 80IA(4) of the Act. It is the contention of the assessee that Govt. of India has authorized GHIAL to grant further rights in respect of any of its activities, pursuant to which GHIAL has entered into an agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns which were duly complied with by the assessee, there is no need to insist for the specific execution of the agreements. Similarly, in the case before us, the assessee has applied to the Government of India, Ministry of Civil Aviation for registration as a Regulated Agent for handling the Cargo facilities at Hyderabad International Airport and vide letter dated 24.11.2008, the assessee was granted the registration while GHIAL has granted the assessee the right to handle the Cargo facilities by virtue of the agreement. The assessee's contention is that the assessee has been recognized also as a 'Service Provider Right Holder' as stipulated under the Concession Agreement itself and that further that the Government has recognized the assessee as 'a Regulated Agent' and therefore, the decision of the Hon'ble Madras High Court is applicable to the assessee and the assessee's contention that since the assessee has been given approval by the Ministry of Civil Aviation, it is not necessary to enter into a specific and independent agreement with the Government for claiming deduction under section 80IA of the Act, has to be accepted. 7.7. The assessee has also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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