TMI Blog2016 (10) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... nd maintain the facility by virtue of the concession granted by the Govt. of India. Each assessee is eligible to claim deduction u/s 80IA(4)(i) of the Act only in relation to the activity carried on by it and there cannot be any duplication of the claim. Therefore, we are of the opinion that the ‘Cargo facility’ operated and maintained by the assessee is infrastructure facility eligible for deduction u/s 80IA(4) of the Act. Assessee has not entered into any agreement with the Central Govt., or State Govt. or local authority or a statutory body as provided u/s 80IA(4) - Held that:- The assessee has applied to the Government of India, Ministry of Civil Aviation for registration as a Regulated Agent for handling the Cargo facilities at Hyderabad International Airport and vide letter dated 24.11.2008, the assessee was granted the registration while GHIAL has granted the assessee the right to handle the Cargo facilities by virtue of the agreement. The assessee’s contention is that the assessee has been recognized also as a ‘Service Provider Right Holder’ as stipulated under the Concession Agreement itself and that further that the Government has recognized the assessee as ‘a Regulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing part of the infrastructure facility to the assessee. It was submitted that the assessee being the company carrying on the operation of the airport be allowed the claim of deduction under section 80IA(4) of the Act. 4. The Assessing Officer was, however, not convinced with the assessee s contentions, and came to the conclusion that the assessee 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 tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the development, design, financing, construction, commissioning, maintenance, operation and management of the Airport [ but excluding the right to carry-out the reserved activities and to provide communication and navigation surveillance/air traffic management services which are required to be provided by AAI ]. He has drawn our attention to Article 3.2.1 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Counsel for the assessee relied upon the above decisions wherein it is held that the term transfer should not be construed in a conservative manner so as to mean the transfer of ownership of the infrastructure facility to the specified authority but it only means the handing over of the infrastructure facility to the specified authority 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record, we find that the main question before us for adjudication is whether the assessee is eligible for deduction under section 80IA(4) of the Act. For proper appreciation of the case the relevant provision is reproduced hereunder : (4) This section applies to- (i) any enterprise carrying on the business 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Cargo Building and to lease the Facilities and Additional Facilities (if any) to the assessee and vide operation and maintenance agreement, GHIAL has granted the assessee the right for the operation and maintenance of the cargo terminal. The assessee had relied upon the decision of the Hon'ble Madras High Court in the case 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 handlin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IAL has entered into an agreement with the assessee and therefore, there is no requirement of the assessee to enter into a separate agreement with the Govt. In support of this contention, the assessee has relied on the decision of the Coordinate Bench in the case of Ocean Sparkles 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 sub-contracted 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed reliance upon the definition of Regulated Agent under clause (5) of Rule-2 of the Aircraft (Security) Rules, 2011. Therefore, according to the assessee, the assessee being accepted as a regulated agent under the Aircraft (Security) Rules, 2011 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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