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TMI Blog2021 (9) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... section 40IA(4) of the I.T. Act? 2. Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the cargo handling contract entered into with BIAL by assessee 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? 3. Whether on the facts and in the circumstances of the case, Tribunal's order is perverse for claiming deduction under section 80IA(4)(ib) of the Act even when the assessee has not satisfied the conditions set out in the said provision to make such a claim as the assessee has not entered into agreement with Government nor is involved in development of infrastructure activity as defined in the Act?" 4. It is noteworthy to mention that in respect of earlier assessment year i.e., 2009-10, similar substantial questions of law were framed in I.T.A.Nos.186/2016 c/w 262/2014 and they have been decided against the revenue and in favour of the assessee. 5. In the light of the aforesaid, the order passed by this Court in I.T.A.Nos.186/2016 c/w 262/2014 is reproduced as under: "These appeals under Section 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, held that the assessee has entered into an agreement with BIAL which is not a statutory body and the cargo handling facility does not form part of the airport and do not fall within the meaning of the expression 'infrastructure facility' as the assessee is a contractor and not a developer and therefore, denied the deduction claimed by the assessee under Section 80IA(4) of the Act. The assessee thereupon filed an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals), by an order dated 11.06.2012, inter alia held that the BIAL is a statutory body and the cargo handling facility forms part of airport and is covered within the expression 'infrastructure facility'. Thereupon, the revenue filed an appeal before the Tribunal. The Tribunal, by an order dated 30.01.2014, inter alia held that though the cargo handling facility falls within the expression 'infrastructure facility', yet the BIAL is not a statutory body and allowed the appeal preferred by the revenue. 3. The assessee thereupon filed a miscellaneous petition under Section 254(2) of the Act seeking rectification of the mistakes in the order dated 30.01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company whose motive is to make profit and same cannot be termed as an authority. Our attention has also been invited to the agreement entered into by the assessee with BIAL and in particular, clause 3.2 and it has been contended that the assessee is operating the cargo handling services only on contract basis and he does not have any right over the building / structure occupied by it and BIAL has not actually transferred the cargo handling facility to the assessee and has only engaged the assessee to run cargo handling facility. Our attention has also been invited to cargo services as defined in the agreement to mean services to be provided to the users as detailed in Schedule A thereto. Section 2(b) of the Airports' Authority of India Act, 1994 has also been brought to our notice and it has been contended that airport means a landing off area for aircrafts, usually with runways and aircraft maintenance and passenger facilities and includes aerodrome as defined in clause (2) of Section 2 of the Aircraft Act, 1934. Reference has also been made to Section 2(2) of the Aircraft Act, which defines the expression 'aerodrome' as any definite or limited ground or water area i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. With regard to the second issue whether the assessee is engaged in providing infrastructure development services within the meaning of Section 80IA(4) of the Act, it is submitted that cargo facilities are an integral part of airport. In this connection, reliance has been placed on Circular No.793 dated 23.06.2000 which was issued to clarify whether structures at ports for storage, loading and unloading etc. will fall within the definition of Section 10(23G) and 80IA of the Act. It is also urged that the assessee has developed cargo handling services under the built, operate and transfer scheme entered into with BIAL under Service Provider Right Holder (SPRH) agreement. Learned Senior counsel for the assessee has also placed reliance on the findings recorded by the Commissioner of Income Tax (Appeals) and has held that SPRH agreement gives the assessee right to design, construction, financing, testing, commissioning, maintenance, management and operation of the facility for the period of 20 years and it is specifically mentioned in the agreement that assessee is on built, operate and transfer basis and the facility has to be transferred to BAIL at the end of the term. It is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 xxxx Explanation.-For the purposes of this clause, "infrastructure facility" means- (a) a road including toll road, a bridge or a rail system; (b) a highway project including housing or other activities being an integral part of the highway project; (c) a water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system; (d) a port, airport, inland waterway, inland port or navigational channel in the sea." Thus, from close scrutiny of Section 80IA(4)(i)(b) of the Act, it is evident that the assessee must be engaged in the business of developing or operating and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to security, customs, x-rays, etc. within its own operations, indicates that this service is part of commercial operations undertaken by air cargo operators and other air transporters whose equipment and machinery are also integrated in to the definition of aerodrome as per Section 2(22) of the Aircraft Act, 1934. Thus, it has been held by the Commissioner of Income Tax (Appeals) that cargo handling services are located within the airport and are critical infrastructure facilities and are deemed to be part of the airport. 11. The Appellate Authority has also taken note of the fact that SPRH agreement gives rights for design, construction, financing, testing, commissioning, management and operation of the facility for a total period of 20 years to the assessee and the concession is on built, operate and transfer basis. Therefore, it has been 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., supra, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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