TMI Blog2018 (6) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... UR RAHMAN, ACCOUNTANT MEMBER For The Revenue : Shri K. Srinivas Reddy Assessee by: S/Shri Manish V. Shah And Sunil Jain ORDER PER S. RIFAUR RAHMAN, AM: Both these appeals filed by the Revenue are directed against orders of CIT(A) - 2, Hyderabad, for AYs 2013-14 and 2014-15, wherein the revenue has raised the following grounds of appeal, which are common, in both the appeals: 1) The CIT (A) erred both on facts of the case and in law. 2) In the facts and circumstances of the case, whether the CIT(A) is correct in law in allowing the deduction u/s 801A even though the assessee did not enter into an agreement with any government/statutory body which is a pre-requisite for claiming deduction u/s 801A(4) of the I.T. Act. 3) In the facts and circumstances of the case, whether the CIT(A) is correct in law in allowing the deduction u/s 80lA although the assessee does not own the facility and only leased the facility from GHIAL 4) Any other ground that may be urged at the time of hearing. 2. The facts as taken from AY 2013-14 are that the assessee had filed its return of income on 29/11/2013 declaring total income of ₹ 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 80IA(4) should not be disallowed. In response thereto, the assessee filed a reply on 21.12.2011 stating that the assessee is a company registered in India and has entered into an agreement with GHIAL ( GMR Hyderabad International Airport Limited ) for operating and maintaining the cargo facilities at Hyderabad International Airport. It was submitted that though GHIAL is not a Government body, the Government of India has granted a right to GHIAL to assign certain business activities to other service providers and therefore, GHIAL, has granted further concession to the assessee along by sub-leasing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the Governments is not necessary; ( 2) Without prejudice to the above, GMR International Airport is a statutory body; and (3) Without prejudice to the above, approvals received from various other departments of the Government itself constitutes the agreement with the Government of India. 5.1. In support of the above propositions, the Learned Counsel for the assessee, drew our attention to the concession agreement between the Ministry of Civil Aviation, Government of India and Hyderabad International Airport, Hyderabad Ltd., ( HIAL ), wherein the HIAL has been granted the exclusive right and privilege to carry-out 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/airtraffic 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 bagg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions on facts, the Learned Counsel for the assessee, has also placed reliance on the decision of the Coordinate Bench of this Tribunal in the case of Ocean Sparkle Ltd., reported in (2006) 155 taxmann 133 (Hyd) (NAG) for the proposition that since GHIAL has been authorised to assign certain functions and has accordingly entered into the agreement with the assessee for operation and maintenance of the cargo facility at Hyderabad International Airport, under the proviso to section 80IA(4)(i), the assessee is entitled to claim the deduction. Further, as regards the meaning of the term 'transfer' used in the said proviso also, the Learned 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), th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.1. As regards the contention of the assessee that since the assessee has received approval from various Government departments to operate and maintain the Cargo facility, it should be considered as having entered into an agreement with the Government of India itself, the Ld. D.R. submitted that the approvals given by various departments of the Government i.e., Customs Authorities etc., is only for carrying on the functions effectively, but cannot be deemed to have given the approval for the purposes of deduction under section 80IA(4) of the Act. Thus, according to him, the orders of the authorities below have to be confirmed. 7. Having regard to the rival contentions and the material on 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 followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve held that the assessee has not created any new infrastructure facility but is only doing the operation on the existing leased infrastructure facility developed by GHIAL. Therefore, it is now necessary to see whether the Cargo facility being operated and maintained by the assessee is an 'infrastructure facility' within the meaning of section 80IA(4) of the Act. 7.2. GHIAL has developed the Rajiv Gandhi International Airport at Hyderabad. Cargo handling facility is an integral part of the Airport. GHIAL has assigned the operation and maintenance of the Cargo facility to the assessee. Vide Facility Lease Agreement, Menzies has agreed to own, procure, install and commission the facilities and the Additional Facilities (if any) at the 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 faci ..... X 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. 7.5. The second objection of the Revenue is that the 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) of the Act. It is the contention of the assessee that Govt. of India has authorized GHIAL to grant further rights in respect of any of its activities, pursuant to which GHIAL 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 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 Regulated Agent' and therefore, the decision of the Hon'ble Madras High Court is applicable to the assessee and the assessee's contention that since the assessee has been given approval by the Ministry of Civil Aviation, it is not necessary to enter into a specific and independent agreement with the Government for claiming deduction under section 80IA of the Act, has to be accepted. 7.7. The assessee has also placed 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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