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TMI Blog2018 (6) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... not own the facility and only leased the facility from GHIAL 4) Any other ground that may be urged at the time of hearing." 2. The facts as taken from AY 2013-14 are that the assessee had filed its return of income on 29/11/2013 declaring total income of Rs. 3,12,09,190/- under normal provisions of Income-tax Act, 1961 (in short 'the Act') and book profit of Rs. 32,23,26,260/- u/s 115JB of the Act. 2.1 The AO completed the assessment u/s 143(3) of the Act on 29/02/2016 determining the assessed income at Rs. 32,77,45,976/- as against the returned income of Rs. 3,12,09,190/- under normal provisions, disallowing the assessee's claim of deduction of Rs. 29,65,36,784/- u/s 80IA of the Act, by holding that the assessee has not created any new infrastructure facility except doing operations on the existing infrastructure facility developed by GHIAL, taken on lease by the assessee company. 3. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A). 4. The CIT(A) allowed the assessee's claim of deduction u/s 80IA by following the decision of ITAT in assessee's own case for AY 2012-13 in ITA No. 1094/Hyd/2016, dated 31/03/2017. 5. Aggrieved by the order of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not fulfill the conditions laid down under section 80IA(4)of the Act. He observed that one of the condition is that the assessee should have entered into an agreement with the Central Government or a State Government or a Local Authority or any other Statutory Body. He observed that the agreement with GHIAL cannot be considered as an agreement with the Government of India as assessee company has not furnished any clinching evidence that the Government of India has accorded permission to GHIAL to assign the work of cargo handling to the assessee company. Further, he observed that under clauses (a) to (c) of sub-section (4) of section 80IA, the reference is only to such an entity which can justifiably claim the deduction and further that the proviso thereto also specifically refers to the transfer that takes place between the transferor enterprise and the transferee enterprise which goes to imply that only that enterprise which transfers the entire enterprise to a transferee enterprise and that in such circumstances only a transferee enterprise can claim the deduction for the unexpired period as if the transfer had not taken place. He observed that the assessee had not created a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b)which provides that Government of India recognizes that HIAL may carry-out any activity or business in connection with or related to the arrival/departure and for handling of aircraft, passenger's baggage, cargo and/or mail at the airport. Thus, according to him, Cargo handling is also an activity assigned to HIAL, by the Government of India. Further, by virtue of Article 3.2.2. HIAL has further been granted right to grant 'Service Provider Rights' (including the right of the Service Provider Right holders to grant sub-rights) to any person for the purpose of carrying-out the activities and businesses described in Article 3.2.1 on such terms and conditions as HIAL may determine are reasonably appropriate. 5.2. He has also drawn our attention to the Tripartite Agreement between GHIAL, Menzies Aviation PLC and the assessee placed at page-232 of the paper book and more particularly page No.243 and Article 2.1 of the agreement whereby the assessee has been granted the exclusive right to render and provide or arrange to provide the O & M services for operation and maintenance of the Cargo terminal and the assessee shall also have exclusive right to levy and collect Car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity at the end of the concession/license period. 5.5. In support of his contention that Cargo facility is part of airport and therefore, 'Infrastructure Facility' under section 80IA(4), the Learned Counsel for the assessee, placed reliance upon the decision of the Coordinate Bench of the Tribunal at Bangalore in the case of M/s. Menzies Aviation Bobba (Bangalore) Pvt. Ltd., in ITA.No.1160/Bang/2012 dated 30.01.2014 and also the decision of the Hon'ble Madras High Court in the case of CIT, Chennai vs. AL Logistics (P) Ltd., reported in (2015) 55 taxmann.com 283 (Mad.). 5.5.1. In support of his contention that the assessee is eligible for deduction under section 80IA(4) on profits and gains derived from an undertaking established in a building taken on lease also, the Learned Counsel for the assessee, placed reliance upon the decision of the Hon'ble Supreme Court in the case of Bajaj Tempo Ltd., reported in (1992) 62 taxmann 480 (SC) and also in the case of Narang Diary Products reported in (1996) 85 taxman 375 (SC). 5.5.2. In support of his contention that the cargo facility approved by Customs Authorities is an 'Infrastructure Facility' under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility which fulfils all the following conditions, namely :-- (a) it is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act; (b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility; (c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995: Provided that where an infrastructure facility is transferred on or after the 1st day of April, 1999 by an enterprise which developed such infrastructure facility (hereafter referred to in this section as the transferor enterprise) to another enterprise (hereafter in this section referred to as the transferee enterprise) for the purpose of operating and maintaining the infrastructure facility on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of AL Logistics (P) Ltd (cited Supra) in support of his contention that cargo facility is also infrastructure facility u/s 80IA(4) of the Act. We find that in the said case, the Hon'ble High Court was considering whether the assessee therein operating and maintaining a Container Freight Station (CFS), is eligible for deduction u/s 80IA(4). The Hon'ble High Court has upheld the order of the Tribunal that the CFS are 'customs area' attached to a port and the work related to customs is performed at these inland container depots/container freight stations and accordingly, inland container depots and CFS are 'inland ports' as they carry out functions like ware housing, customs clearance and transport of goods from its location to the seaports and vice versa by railway or by trucks in containers. 7.3. In the case before us also, the assessee is handling the Cargo facility which is into similar activities. Further, the Coordinate Bench of the Tribunal in the case of Ocean Sparkles Ltd has held that where the assessee therein was required to fulfill the developers' obligation pertaining to operation and maintenance of ports as laid down under the original a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. In the said case, the assessee therein, engaged in the business of operation and maintenance of ports, cargo services and other related services, had entered into agreement for operation and maintenance of port, with developers who were engaged in development and operation of ports and had entered into an agreement with specified authorities i.e. State Govt. for development and maintenance of certain ports. The Hon'ble Tribunal observed that later on, under an agreement, the operation and maintenance services of said ports were subcontracted by the developer to assessee company in accordance with original agreement with specified authorities after 1-4-99 and held that as per the proviso to section 80IA(4)(i), the assessee therein was entitled to deduction u/s 80IA(4) of the Act. For this purpose, the Tribunal had taken into consideration the proviso to section 80IA(4)(i) to hold that the proviso aims at qualifying the transferee enterprises, as enterprise eligible for deduction under this section provided, the other conditions be satisfied and that the proviso does not require any direct agreement between the transferee enterprise and the specified authority. 7.6. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 needs no specific agreement with the Government for carrying on the work. However, we are unable to accept this contention of the assessee because the definition of a "Regulated Agent" given in the Aircraft (Security) Rules, 2011 is only to govern the security measures for Aircraft operators and it does not mean that assessee has been recognized as an agent to operate and maintain the Cargo facilities at the Airport. In fact, it is the other way round, i.e., the person operating and maintaining the Cargo facilities is recognized as a 'Regulated Agent' who can function in accordance with the Aircraft (Security) Rules, 2011. 7.8. The assessee has also placed reliance upon the decision of this Tribunal in the case of Menzies Aviation Bobba, Bangalore in M.P.No.19/Bang/2014 in ITA.No.1160/Bang/2012 dated 05.10.2015 wherein the Tribunal has accepted Bangalore International Airport Limited as a statutory body under section 80IA(4) of the Act. We find that in the said case, the Tribunal had relied upon the decision of the jurisdictional High Court therein i.e., the Hon'ble Karnataka High Court in a writ petition filed by M/s. Flemingo Duty-Free Shops P. Ltd., against the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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