TMI Blog2017 (4) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Menzies and Menzies has provided the facilities at the cargo building and while GHIAL has leased out the cargo terminal to the assessee, Menzies has leased the facilities to the assessee and it is the responsibility of the assessee to operate and maintain the cargo facility in accordance with the obligation of GHIAL to operate and 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. - Decided in favour of assessee - ITA No.1094/Hyd/2016 - - - Dated:- 31-3-2017 - Smt. P. Madhavi Devi, Judicial Member AND Shri S.Rifaur Rahman, Accountant Member For The Assessee : Shri Manish V. Shah and Shri Sunil Jain For The Revenue : Shri A. Sitarama Rao, DR ORDER Per Smt. P. Madhavi Devi, J.M. This is assessee s appeal for the A.Y 2012-13. The assessee has raised the following grounds of appeal: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, operating and maintaining any infrastructure facility to claim the benefit of the said section subject to fulfilling the other conditions therein and the Appellant is admittedly operating and maintaining the Air Cargo terminal since 2008 and is, hence, entitled to the said benefit. 3. The Appellant therefore prays that the Assessing Officer be directed to allow deduction under section 80-IA as claimed by it in the return of income since it satisfies all the conditions laid down in the said section. 4. The Appellant craves leave to refer to and rely on the grounds raised by it before the Assessing officer and the Learned Commissioner of Appeals, as part of the present appeal. Ground 2: The Appellant craves leave to add, alter and/or amend or withdraw all or any of the foregoing grounds of appeal . 2. At the time of hearing, the learned Counsel for the assessee submitted that similar issue had arisen in the assessee s own case for the A.Ys 2009-10, 2010-11 and 2011-12 in ITA Nos. 421 to 423/Hyd/2015 and the B Bench of this Tribunal has decided the issue in favour of the assessee vide orders dated 6.10.2016. A copy of the said order is filed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 transferor enterprise and the transferee enterprise which goes to imply that only that enterprise which transfers the entire enterprise to a transferee enterprise and that in such circumstances only a transferee enterprise can claim the deduction for the unexpired period as if the transfer had not taken place. He observed that the assessee had not created any new infrastructure facility except operating the existing infrastructure facility which has also only been leased out to the assessee. 4.1. He observed that it is the GHIAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 placed at page-232 of the paper book and more particularly page No.243 and Article 2.1 of the agreement whereby the assessee has been granted the exclusive right to render and provide or arrange to provide the O M services for operation and maintenance of the Cargo terminal and the assessee shall also have exclusive right to levy and collect Cargo Charges and to Article 2.3 thereof, under which GHIAL warrants to the company to build the Cargo building as per the specifications and design set out in the Cargo Building Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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'ble Supreme Court in the case of Bajaj Tempo Ltd., reported in (1992) 62 taxmann 480 (SC) and also in the case of Narang Diary Products reported in (1996) 85 taxman 375 (SC). 5.5.2. In support of his contention that the cargo facility approved by Customs Authorities is an 'Infrastructure Facility' under section 80IA(4), the Learned Counsel for the assessee, placed reliance upon the decisions of the Hon'ble Delhi High Court and Hon'ble Bombay High Court in the cases of Contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, 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 1st day of April, 1999 by an enterprise which developed such infrastructure facility (hereafter referred to in this section as the transferor enterprise) to another enterprise (hereafter in this section referred to as the transferee enterprise) for the purpose of operating and maintaining the infrastructure facility on its behalf in accordance with the agreement with the Central Government, State Government, local authority or statutory body, the provisions of this section shall apply to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 handling the Cargo facility which is into similar activities. Further, the Coordinate Bench of the Tribunal in the case of Ocean Sparkles Ltd has held that where the assessee therein was required to fulfill the developers' obligation pertaining to operation and maintenance of ports as laid down under the original agreement between the developers and specified authorities, it is exactly the situation which has been contemplated by the proviso to section 80IA(4)(i) of the Act. As regards t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 aims at qualifying the transferee enterprises, as enterprise eligible for deduction under this section provided, the other conditions be satisfied and that the proviso does not require any direct agreement between the transferee enterprise and the specified authority. 7.6. Further, the Learned Counsel for the assessee has also placed reliance upon the decision of Hon'ble Madras High Court in the case of A.L. Logistics P. Ltd., wherein it has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated 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 Act. We find that in the said case, the Tribunal had relied upon the decision of the jurisdictional High Court therein i.e., the Hon'ble Karnataka High Court in a writ petition filed by M/s. Flemingo Duty-Free Shops P. Ltd., against the Bangalore International Airport Ltd.,( BIAL ) wherein the Hon'ble Karnataka High Court has held BIAL to be a statutory authority as it is discharging statutory functions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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