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TMI Blog2016 (6) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... t to a Concession Agreement, Government of India (GOI) has granted BIAL exclusive rights for development, construction, operation and maintenance of the state of the art International Airport at Bangalore. The concession agreement recognizes that BIAL subject to the concession agreement grant rights to any person for carrying out activities connected to development, construction, operation and maintenance of Cargo Terminal/Facility. One of the key requirement for the Airport is the provision of all necessary facilities for an efficient domestic and international cargo terminal and the provision of cargo services at standards compliant with good industry practice. On the backdrop of this, BIAL has invited tenders across the globe from various companies to offer cargo handling services at the upcoming international airport at Devanahalli, Bangalore. 4. Menzies Aviation plc, UK is a company incorporated under the laws of UK is basically engaged in providing cargo and ground handling and other related services across 70 international airports worldwide. Bobba group of Companies incorporated at Bangalore renders ground handling services to Lufthansa Airlines. Menzies Aviation Plc and B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcular issued by the Central Board of Direct Taxes (CBDT) vide No. 10/2005 dated 16.12.2005 (also refer circular no. 793 dated 23.06.2000) wherein Port has been defined as "Port", for the purposes of sections 10(23G) and 8OIA of the Income-tax Act, 1961, includes structures at the ports for storage, loading and unloading etc., if the following conditions are fulfilled : (a)the concerned port authority has issued a certificate that the said structures form part of the port, and (b) such structures have been built under the BOT or BOLT schemes and there is an agreement that the same would be transferred to the said authority on the expiry of the time stipulated in the agreement. Accordingly, airport for the purpose of section 8OIA includes cargo facility, according to the assessee. 9. However, the Assessing Officer has not accepted the contentions of the assessee and disallowed the claim for deduction u/s. 8OIA. 10. Aggrieved, the assessee went in appeal before the CIT(Appeals). 11. The CIT(Appeals) noted that an identical issue was considered for the AY 2009-10 in ITA No.351/C-12(1)/CIT(A)-III/Bang/11-12 wherein the CIT(A)'s finding was as follows:- " I have carefully considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext, I also note that the function of "handling of cargo" finds specific mention at Clause 3.2.1 (ii). I am therefore inclined to agree with the appellant that the BIAL is a "statutory body" for purpose of Sec. 80IA(4)(i)(b), being an entity established under laws for the time being in force, being the Greenfield Airports Policy of the MOCA, the Aircraft Act, 1934, the Airports Authority Act, 1994, and the Companies Act, 1956. I feel that the argument of the AO that BIAL is "merely a company wherein the KSIIDC, Govt. of Karnataka and Airport Authority of India, Govt. of India, have some shareholdings" is not found to reflect the true character and status of the body, which is entrusted under the relevant laws with the establishment and operation of a greenfield airport, the constitution and functioning of which is clearly stage-managed by provisions of existing statutes." 12. Hence, the CIT(Appeals) accepted the contention of the assessee that BIAL is a statutory body for the purpose of section 80IA(4)(i)(b), being an entity established under the laws for the time being in force. 13. The next issue was whether the company ought to comply with the condition that it should be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs us to the point about whether the appellant's status in the scheme of the Bangalore Airport is one of a stakeholder, or of a contractor. It is significant to note that Sec 8OIA(4)(i) requires development, operation and maintenance of an infrastructure facility. The AO has raised the point of the appellant being a mere contractor to show that the BIAL had not actually transferred the cargohandling facility to the appellant. However, the SPRH Agreement gives rights for "design, construction, financing, testing, commissioning, maintenance, management and operation of the facility" for a total period of 20 years to the appellant. It is specifically mentioned that " .. the concession is on a BOT basis and the facility shall be transferred to BIAL at the end of the term." The Hyderabad Tribunal in the case of GVPR Engineers Ltd Vs. ACIT 21 Taxman 25 has held that though every person who enters into a contract for the development of an infrastructure facility is a contractor, in such a case, the contractor and the developer cannot be viewed differently; it found that "every contractor may not be a developer but every developer developinq infrastructure facility on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airport area. 4. The CIT(A) ought to have appreciated that the assessee is only a contractor to whom certain rights were granted by BIAL to operate the cargo handling facility and such contractor cannot be called as a developer of infrastructure facility. Further, the CIT(A) ought to have appreciated that the intention of the legislature is to provide this deduction only to the persons directly developing, maintaining and operating the facility but not to the contractors as held by the Mumbai larger bench of ITAT, in the case of B T Patil & Sons vs ACIT. 5. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored. 6. The appellant craves leave to add, alter, amend and / or delete any of the grounds mentioned above." 15. The ld. counsel for the assessee, Shri V. Srinivasan, took us through the order of the coordinate Bench of this Tribunal for the previous year i.e., AY 2009-10 in ITA No.1160/Bang/2012 dated 30.01.2014 wherein at para 12 of the order, it has been held as follows:- " ................ No dou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue has placed reliance upon, is distinguishable on facts. In the said case, the Special Bench was considering the case of a civil contractor who was engaged in construction of various projects of Govt. of Maharashtra and Govt. of Karnataka and during the relevant previous years, it had claimed deduction u/s 80IA(4) of the Income-tax Act. The Hon'ble Special Bench was considering the nature of the work undertaken by the assessee therein whether to be considered as development of the infrastructure facility and it was held that the assessee does not own the project but only involves in construction of the project and, therefore, it was held that the assessee therein does not satisfy the conditions stipulated u/s 80Ia(4) of the Income-tax. The Special Bench held the assessee to be only a 'contractor' and not 'developer' and, therefore, not eligible for deduction u/s 80IA(4) of the Income-tax Act. In the case before us, the assessee is not a contractor but is holding a license to develop, operate and maintain the cargo handling facility and is required to transfer his rights in the property to Bangalore International Development Authority after the expiry of the term stipulated u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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