M/S MENZIES AVITATION BOBBA PVT LTD ,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-4(1)(2), BANGALORE

Per Chandra Poojari, Accountant Member

“1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned CIT[A] is not justified in upholding the denial of the deduction of Rs.38,41,08,439/- claimed by the appellant u/s.80IA of the Act, on the ground that the appellant had not directly entered into agreement with Government or any statutory body and thus the condition mentioned in clause [b] of section 80IA[4][i] of the Act was not complied with by the appellant under the facts and in the circumstances of the appellant's case.

3. The learned CIT[A] ought to have appreciated that the concession agreement entered into between GOI and BIAL provides for Service Providers Right Holders [SPRH] agreement for a cargo facility and accordingly BIAL had entered into the agreement with the appellant for developing, operating and maintaining the cargo facility under the BOT method, which was sufficient compliance with the requirement of clause [b] of section 80IA[4][i] of the Act as held by the Hon'ble ITAT in the appellant's own case for the earlier assessment years under the facts and in the circumstances of the appellant's case.

4. The learned CIT[A] ought to have appreciated that BIAL was established by KSIIDC and thus a statutory body as per the definition of Parliament [Prevention of Disqualification] Act [10 of 1959] and he ought not to have held that BIAL was not a statutory body for purposes of clause [b] of section 80IA[4][i] of the Act.

5. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies itself liable to be charged to interest u/s.234-A and 234-B of the Act, which under the facts and in the circumstances of the appellant's case and the levy deserves to be cancelled.

6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”

3. At the time of hearing, the ld. AR submitted that the issue is squarely covered by the earlier orders of Tribunal in assessee’s own case in the following cases:-

(i) Order dated 30.1.2014 in for AY 2009-10. (ii) Order dated 05.10.2015 in ITA No.1160/Bang/2012 & MP No.19/Bang/2014 for AY 2009-10. (iii) Order dated 24.6.2016 in ITA No.22/Bang/2014 for AY 2010-11. (iv) Order dated 18.1.2021 in ITA No.938/Bang/2019 for AY 2015-16. 4. He accordingly submitted that since the facts and circumstances for the year under consideration are the same, the above orders of the Tribunal are to be followed and issue has to be decided in favour of the assessee.

MP No.19/Bang/2014 dated 18.09.2014 “11. It is submitted by the learned counsel for the assessee that the issue involved in the appeal was the claim of deduction u/s 80IA(4)(i) of the Act in respect of the new infrastructure facility established by it at the Bangalore International Airport. He submitted that in the order of the Tribunal, the Tribunal has held that Bangalore International Authority Ltd. (BIAL) is not a statutory body for the purpose of sec.80IA(4)( )(b) of the Act and accordingly disallowed the claim of deduction u/s 80IA. He submitted that the issue as to whether BIAL is a statutory body or not had come up for consideration before the jurisdictional High Court in the case of M/s.Flemingo Dutyfree Shops Pvt. Ltd., in WP No.14215/2006 and by order dated 19-12-2008, the Hon'ble High Court has held it to be a statutory authority under Article 12 of the Constitution of India. Thus, according to the learned counsel for the assessee, BIAL is a statutory body and hence the decision of the Tribunal on this issue is erroneous and needs re- consideration in the light of the jurisdictional High Court.

3. The learned Departmental Representative was also heard and having gone through the material on record, we find that the Hon'ble High Court of Karnataka in the case of M/s.Flemingo Dutyfree Shops Pvt. Ltd., (cited supra) has held BIAL to be a statutory body. Since the Hon'ble High Court's decision is prior to the order of the Tribunal but has been brought to the notice of this Tribunal only subsequent to the passing of the order by the Tribunal, the decision of the Tribunal needs re-consideration on this issue. Therefore, the appeal of the assessee is recalled only to re-consider the issue as to whether BIAL is a statutory body u/s 80IA(4)(i) of the Act.” MP No.19/Bang/2014 and by order dated 05.10.2015 “2. The appeal was earlier heard and disposed of by order dated 30.01.2014. However, vide order in MP No.19/Bang/2014 dated 18.09.2014 the Tribunal’s order was recalled only to re- consider the issue as to whether the Bangalore International Airport Ltd. [BIAL] is a statutory body u/s 80IA(4)(i) of the Act in view of the Judgment of the Hon’ble Karnataka High Court in the case of M/s. Flemingo Dutyfree Shops P. Ltd., in W.P.No.14215 of 2006 dated 19.12.2008. It was subsequently brought to the notice of this Tribunal that the Revenue has also filed M.P.No.20/Bang/2014 stating that this Tribunal had held that the activity carried on by the assessee is infrastructure development under section 80IA(4), but as far as its agreement with BIAL is concerned, it was held that the status of the BIAL is not that of statutory authority and therefore, disallowed the deduction under section 80IA of the Act. According to the department, this finding of the Tribunal is ambiguous and hence is a mistake apparent from record which needs rectification.

Thus, the revenue has sought recall of the order and rectification of the alleged mistake apparent from record. The MP of the revenue was posted along with the appeal for hearing.

7. As the very same grounds on which this Tribunal has held that BIAL is not a statutory body, have been considered by the Hon’ble High Court and have been accepted that it is a statutory body. Therefore, respectfully following the Hon’ble

jurisdictional High Court order, we do not see any reason to interfere with the order of the CIT(A). 8. In the result, the Revenue’s appeal is dismissed.”

6. We have considered the rival submissions and perused the material on record. We find that the Tribunal in AY 2009-10 vide its order dated 30.1.2014 in while holding that the agreement entered into by the assessee with BIAL was for development, operation and maintenance of infrastructure facility u/s. 80IA(4) of the Act and holding in favour of the assessee, on the other hand held against the assessee that assessee did not satisfy the condition of entering into an agreement with Central or State Governments or local authorities or statutory body. However, vide order dated 5.10.2015 in MP No.19/Bang/2014 observed that the Hon’ble High Court of Karnataka in WP No.14215/2006 dated 19.12.2008 in the case of M/s. Flemingo Dutyfree Shops (P) Ltd. held that BIAL is a statutory body and therefore the order of the Tribunal dated 30.1.2014 was recalled to consider this aspect of the matter and the issue was decided in favour of the assessee. Similarly for AY 2010-11 in ITA No.22/Bang/2014 in assessee’s own case, both the issues were decided in favour of the assessee by the Tribunal by order dated 24.6.2016 and the revenue’s appeal was dismissed. For the year under consideration the facts and circumstances being identical to that of the earlier years, we find no reason to take a contrary view. Accordingly the appeal of the revenue is dismissed.

Pronounced in the open court on this 27th day of January, 2021.