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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI CHANDRA POOJARI & SHRI GEORGE GEORGE K.
Per Chandra Poojari, Accountant Member
This appeal by the revenue is directed against the order of the CIT(Appeals)-4, Bengaluru dated 12.02.2019 for the assessment year 2015-16.
The assessee is engaged in the business of providing Cargo handling at Bangalore International Airport Ltd. (BIAL). During the course of assessment proceedings the AO noticed that the assessee has claimed deduction of Rs.46,10,87,539 u/s. 80IA of the Income-tax Act, 1961 [the Act] and the assessee was called for to explain its eligibility for deduction. In response, the assessee submitted that it has entered into an agreement with BIAL for developing, operating and maintaining a new infrastructure facility as per section 80A(4)(i)(b) of the Act. It was contended that BIAL is a statutory body and hence deduction was allowable. The AO, however, rejected the contentions of the assessee. The assessee preferred appeal before the CIT(Appeals).
The CIT(Appeals) observed that similar issue had come up for consideration for AY 2012-13 before his predecessor wherein it was observed that the decision of the Tribunal for AY 2009-10 in assessee’s own case was in favour of assessee holding that assessee had satisfied both the conditions of engagement in the activity of manufacture- development as well as entering of contractual agreement with the requisite statutory authority as prescribed in section 80IA(4)(i) of the Act. It was also noted that the facts and circumstances were similar in AY 2011-12. Following his predecessor’s order, the CIT(Appeals) held that assessee is entitled to claim deduction u/s 80IA of the Act and deleted the disallowance made by the AO.
Aggrieved, the revenue is in appeal before the Tribunal on the following grounds:-
“1. The Order of the Ld.CIT(A) is opposed to the law and facts of the case.
2. The CIT(A) ought to have adjudicated on the merits of the case instead of following his predecessor's Order for AY 2012-13, who in turn relied on the Order of his predecessor for AY 2010-11 and order of the ITAT for AY 2009-10.
3. On the facts and circumstances of the case, the CIT(A) erred in allowing the appeal and thereby granting deduction u/s 80IA(4)(i) in respect of profits earned from cargo handling facilities maintained and operated by the assessee at Bengaluru International Airport, ignoring the fact that the principle condition for allowing this deduction is that the agreement for development of any infrastructure facility must be entered into with the Central Govt. or Sate Govt. or any local authority / statutory body, while assessee has entered into a Service provider Right holder Agreement with Bengaluru International Airport Ltd., a private limited company, for running this facility.
4. The CIT (A) ought to have appreciated that every facility of this nature in the vicinity of the airport cannot fit into the definition of "Airport". The definition of "Airport" as provided in other allied Acts does not bring into its ambit the cargo handling facility although situated within the airport area.
5. 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 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 contractors.
6. 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.
The appellant craves leave to add, alter, amend and/or delete any of the grounds that may be urged.”
The ld. counsel for the assessee supported the order of CIT(Appeals) and submitted that the Tribunal in assessee’s own case for AY 2009-10 & 2010-11 decided the issue in favour of assessee. On the other hand, ld. DR relied on the order of the AO.
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 18th day of January, 2021.