Hyderabad Menzies Air Cargo Pvt.Ltd., R.R.Dist, R.R.Dist V. DCIT, Circle-2(2), Hyd, Hyderabad

ITA 421/HYD/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6156 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 16-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS
• Assessee Lawyers: YOGESH A THAR; SUNIL JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.421, 422 & 423/HYD/2015 ASSESSMENT YEARS 2009-2010, 2010-2011 & 2011-2012 HYDERABAD MENZIES AIR CARGO P. LTD., SHAMSHABAD -500409 RANGA REDDY DISTRICT. PAN AACCC9611N VS., DCIT, CIRCLE-2(2) HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. YOGESH A. THAR & MR. SUNIL JAIN FOR REVENUE : SMT. NIVEDITA BISWAS DATE OF HEARING : 13.07.2016 DATE OF PRONOUNCEMENT : 06.10.2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. ALL THE APPEALS ARE FILED BY THE ASSESSEE FOR THE A. YS. 2009-2010, 2010-2011 AND 2011-2012 RESPECTIVELY. IN ALL THESE APPEALS, THE ASSESSEE IS AGGRIEVED BY THE DENIAL OF TH E CLAIM OF DEDUCTION UNDER SECTION 80IA(4) OF THE I.T. ACT, 1961. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPAN Y, ENGAGED IN THE BUSINESS OF MAINTAINING CARGO TERMINAL AT SHAMSHABAD AIRPORT AT HYDERABAD, FILED ITS RETURN OF IN COME FOR THE RESPECTIVE ASSESSMENT YEARS ADMITTING INCOME AFTER C LAIMING DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. THE RETURNS WERE INITIALLY PROCESSED UNDER SECTION 143(1) OF THE ACT. S UBSEQUENTLY, THE ASSESSMENTS WERE TAKEN-UP FOR SCRUTINY THROUGH CASS AND 2 ACCORDINGLY, NOTICES WERE ISSUED AND SERVED ON THE A SSESSEE. THE ASSESSEE APPEARED THROUGH ITS AUTHORISED REPRESENTATIV E AND FURNISHED THE INFORMATION CALLED FOR. 3. DURING THE COURSE OF HEARING, THE ASSESSING OFFIC ER ISSUED A LETTER DATED 28.11.2011 REQUIRING THE ASSESS EE TO EXPLAIN AS TO WHY THE DEDUCTION CLAIMED UNDER SECTION 80IA(4) SHOULD NOT BE DISALLOWED. IN RESPONSE THERETO, THE ASSESSEE FILE D A REPLY ON 21.12.2011 STATING THAT THE ASSESSEE IS A COMPANY REGISTE RED IN INDIA AND HAS ENTERED INTO AN AGREEMENT WITH GHIAL ( GMR HYDERABAD INTERNATIONAL AIRPORT LIMITED) FOR OPERATING AND MAINTAINING THE CARGO FACILITIES AT HYDERABAD INTERNATIO NAL AIRPORT. IT WAS SUBMITTED THAT THOUGH GHIAL IS NOT A GOVE RNMENT BODY, THE GOVERNMENT OF INDIA HAS GRANTED A RIGHT TO GH IAL TO ASSIGN CERTAIN BUSINESS ACTIVITIES TO OTHER SERVICE PROV IDERS AND THEREFORE, GHIAL, HAS GRANTED FURTHER CONCESSION TO TH E ASSESSEE ALONG BY SUB-LEASING PART OF THE INFRASTRUCTURE FACIL ITY TO THE ASSESSEE. IT WAS SUBMITTED THAT THE ASSESSEE BEING THE CO MPANY 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 CONVINCE D WITH THE ASSESSEES CONTENTIONS, AND CAME TO THE CONCLUS ION THAT THE ASSESSEE DOES NOT FULFILL THE CONDITIONS LAID DOW N UNDER SECTION 80IA(4) OF THE ACT. HE OBSERVED THAT ONE OF THE C ONDITION IS THAT THE ASSESSEE SHOULD HAVE ENTERED INTO AN AGREEM ENT WITH THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY. HE OBSERVED THAT TH E AGREEMENT WITH GHIAL CANNOT BE CONSIDERED AS AN AGREE MENT WITH THE GOVERNMENT OF INDIA AS ASSESSEE COMPANY HAS NOT FURNISHED ANY CLINCHING EVIDENCE THAT THE GOVERNMENT OF INDIA 3 HAS ACCORDED PERMISSION TO GHIAL TO ASSIGN THE WORK O F CARGO HANDLING TO THE ASSESSEE COMPANY. FURTHER, HE OBSERVE D THAT UNDER CLAUSES (A) TO (C) OF SUB-SECTION (4) OF SECTION 80IA, THE REFERENCE IS ONLY TO SUCH AN ENTITY WHICH CAN JUSTIFIA BLY CLAIM THE DEDUCTION AND FURTHER THAT THE PROVISO THERETO ALSO SPECI FICALLY REFERS TO THE TRANSFER THAT TAKES PLACE BETWEEN THE TRANSF EROR ENTERPRISE AND THE TRANSFEREE ENTERPRISE WHICH GOES TO IMPLY THAT ONLY THAT ENTERPRISE WHICH TRANSFERS THE ENTIRE ENTERPRIS E TO A TRANSFEREE ENTERPRISE AND THAT IN SUCH CIRCUMSTANCES ON LY A TRANSFEREE ENTERPRISE CAN CLAIM THE DEDUCTION FOR THE U NEXPIRED PERIOD AS IF THE TRANSFER HAD NOT TAKEN PLACE. HE OBSE RVED THAT THE ASSESSEE HAD NOT CREATED ANY NEW INFRASTRUCTURE FAC ILITY EXCEPT OPERATING THE EXISTING INFRASTRUCTURE FACILITY W HICH HAS ALSO ONLY BEEN LEASED OUT TO THE ASSESSEE. 4.1. HE OBSERVED THAT IT IS THE GHIAL WHICH COMPLETED THE ENTIRE INFRASTRUCTURE FACILITY AND IN CASE IT IS NOT IN A POSITION TO MAINTAIN AND OPERATE THE INFRASTRUCTURE, IT CAN TRANSFER THE FACILITY IN ENTIRETY, BUT NOT ONLY A PIECE OF THE OPERA TION TO ENABLE THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 80IA(4) O F THE ACT. ACCORDING TO THE ASSESSING OFFICER, SECTION 80IA(4) C ONFERS BENEFITS ONLY ON ONE ENTITY. THUS, HE CAME TO THE CONCL USION THAT THE ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IA(4 ) IS NOT ALLOWABLE. HE ACCORDINGLY, DISALLOWED THE CLAIM OF D EDUCTION UNDER SECTION 80IA(4) FOR ALL THE THREE ASSESSMENT YEA RS AND BROUGHT IT TO TAX. AGGRIEVED, ASSESSEE PREFERRED AN AP PEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE ASSESSING OF FICER AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE , WHILE REITERATING THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AUTHORI TIES 4 BELOW, HAS ADVANCED THE FOLLOWING ARGUMENTS IN SUPPOR T OF THE ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IA(4) O F THE ACT. (1) ACCORDING TO THE PROVISO TO SECTION 80IA(4)(B), THE AGREEMENT OF GHIAL WITH THE GOVERNMENT OF INDIA IS SUFFICIENT COMPLIANCE OF THE PROVISION AND A SEPARATE AND INDEPENDENT AGREEMENT BY THE ASSESSEE WITH 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 CONC ESSION AGREEMENT BETWEEN THE MINISTRY OF CIVIL AVIATION, GOVER NMENT OF INDIA AND HYDERABAD INTERNATIONAL AIRPORT, HYDERABAD L TD., (HIAL), WHEREIN THE HIAL HAS BEEN GRANTED THE EXCLU SIVE RIGHT AND PRIVILEGE TO CARRY-OUT THE DEVELOPMENT, DESIGN, FI NANCING, CONSTRUCTION, COMMISSIONING, MAINTENANCE, OPERATION AND MANAGEMENT OF THE AIRPORT [ BUT EXCLUDING THE RIGHT TO CA RRY-OUT THE RESERVED ACTIVITIES AND TO PROVIDE COMMUNICATION AND NAVIGATION SURVEILLANCE/AIR TRAFFIC MANAGEMENT SERVICE S WHICH ARE REQUIRED TO BE PROVIDED BY AAI ]. HE HAS DRAWN O UR ATTENTION TO ARTICLE 3.2.1 (B) WHICH PROVIDES THAT GOVERNMENT OF I NDIA RECOGNIZES THAT HIAL MAY CARRY-OUT ANY ACTIVITY OR BU SINESS IN CONNECTION WITH OR RELATED TO THE ARRIVAL/DEPARTURE AND FOR HANDLING OF AIRCRAFT, PASSENGERS BAGGAGE, CARGO AND /OR MAIL AT 5 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 GR ANTED RIGHT TO GRANT SERVICE PROVIDER RIGHTS (INCLUDING THE RIGHT O F THE SERVICE PROVIDER RIGHT HOLDERS TO GRANT SUB-RIGHTS) TO ANY PER SON FOR THE PURPOSE OF CARRYING-OUT THE ACTIVITIES AND BUSINESSES DESCRIBED IN ARTICLE 3.2.1 ON SUCH TERMS AND CONDITIONS AS HIAL MA Y 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 MO RE PARTICULARLY PAGE NO.243 AND ARTICLE 2.1 OF THE AGRE EMENT WHEREBY THE ASSESSEE HAS BEEN GRANTED THE EXCLUSIVE RI GHT TO RENDER AND PROVIDE OR ARRANGE TO PROVIDE THE O & M SE RVICES 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 LEASE AGREEMENT WHILE THE ASSESSEE COMPANY WARRANTED TO GHIA L THAT MENZIES SHALL BUILD THE FACILITIES/ADDITIONAL FACILI TIES IN COMPLIANCE WITH CARGO AGREEMENTS AND THAT THE DESIGN, ENGINEERING, CONSTRUCTION, TESTING AND COMMISSION OF T HE CARGO TERMINAL SHALL BE FREE FROM DEFECT AND OF CORRECT DE SIGN AND WORKMANSHIP, OF GOOD QUALITY AND INTERNATIONALLY ACCE PTED STANDARDS. HE HAS ALSO DRAWN OUR ATTENTION TO THE CARGO BUILDING LEASE AGREEMENT DATED 28.04.2006 BETWEEN THE ASSESSEE AND GHIAL, BY VIRTUE OF WHICH THE CARGO BUILDING WAS TO B E CONSTRUCTED BY GHIAL AS PER THE SPECIFICATIONS SET-OUT T HEREIN AND AGREED TO BY MENZIES WHICH WAS PROVIDED TO THE ASS ESSEE ON 6 LEASE FOR A PERIOD OF 15 YEARS FROM THE AIRPORT OPENI NG DATE ALONG WITH A RIGHT TO SUB-LEASE, LICENSE ETC. 5.3. HE SUBMITTED THAT GHIAL HAS NOT CLAIMED ANY DEDUCTION UNDER SECTION 80IA(4) AS IT HAS NOT EARNED A NY PROFITS DURING THE YEARS. IT WAS FURTHER SUBMITTED THAT THE ASSES SEE EARNED INCOME FROM CARGO OPERATIONS AND THE OPERATING EXPENDITURE INCLUDES THE CONCESSIONAIRE FEE AND CONCE SSIONAIRE RENT PAID TO GHIAL AND HAS DRAWN OUR ATTENTION TO THE REL EVANT ENTRIES IN ITS BOOKS I.E., P & L A/C AND SCHEDULE-L TH ERETO. 5.4. IN ADDITION TO THE ABOVE SUBMISSIONS ON FACTS, THE LEARNED COUNSEL FOR THE ASSESSEE, HAS ALSO PLACED RE LIANCE ON THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF OCEAN SPARKLE LTD., REPORTED IN (2006) 155 TAXMANN 13 3 (HYD) (NAG) FOR THE PROPOSITION THAT SINCE GHIAL HAS BEEN AU THORISED TO ASSIGN CERTAIN FUNCTIONS AND HAS ACCORDINGLY ENTERE D INTO THE AGREEMENT WITH THE ASSESSEE FOR OPERATION AND MAINTENANC E OF THE CARGO FACILITY AT HYDERABAD INTERNATIONAL AIRPORT, UNDER THE PROVISO TO SECTION 80IA(4)(I), THE ASSESSEE IS ENTITLE D 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 I S HELD THAT THE TERM TRANSFER SHOULD NOT BE CONSTRUED IN A CONS ERVATIVE 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 S PECIFIED 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 UN DER SECTION 7 80IA(4), THE LEARNED COUNSEL FOR THE ASSESSEE, PLACED RELIANCE UPON THE DECISION OF THE COORDINATE BENCH OF THE TRIBU NAL 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 HONBLE MADRAS HIGH COURT IN THE C ASE 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 PROFI TS AND GAINS DERIVED FROM AN UNDERTAKING ESTABLISHED IN A BUILDING TAKEN ON LEASE ALSO, THE LEARNED COUNSEL FOR THE ASSESSEE, PLA CED RELIANCE UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE C ASE 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 FACIL ITY APPROVED BY CUSTOMS AUTHORITIES IS AN INFRASTRUCTURE FACILITY UNDER SECTION 80IA(4), THE LEARNED COUNSEL FOR THE ASS ESSEE, PLACED RELIANCE UPON THE DECISIONS OF THE HONBLE DEL HI HIGH COURT AND HONBLE BOMBAY HIGH COURT IN THE CASES OF CO NTAINER CORPORATION OF INDIA LTD., VS. ACIT REPORTED IN (2012 ) 21 TAXMANN.COM 317 (DELHI) AND CIT VS. CONTINENTAL WAREHO USING CORPORATION (NHAVA SHAVA) LTD., REPORTED IN (2015) 58 TAXMANN.COM 78 (BOM.) RESPECTIVELY. 5.6. FINALLY, THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF THE COORDINATE BENCH OF TH E TRIBUNAL AT BANGALORE IN THE CASE OF M/S. MENZIES AVIATION BOB BA (BANGALORE) PVT. LTD., (CITED SUPRA) FOR THE PROPOSITI ON THE GHIAL 8 IS ALSO A STATUTORY AUTHORITY LIKE BANGALORE INTERNATI ONAL AIRPORT LTD., AND THEREFORE, THE AGREEMENT WITH GHIAL IS AN AGRE EMENT WITH A STATUTORY AUTHORITY. 6. THE LD. D.R., ON THE OTHER HAND, SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE IS NOT ELIGIBLE TO THE CLAIM OF DEDUCTION UNDER SECTION 80IA(4 ) AS THE CONDITIONS SET-OUT THEREIN ARE NOT FULFILLED BY THE A SSESSEE. AS REGARDS THE APPLICABILITY OF THE DECISION OF THE COOR DINATE BENCH IN THE CASE OF OCEAN SPARKLE LTD., (CITED (SUPRA) HE SUBMITTED THAT THE SAID CASE IS FACTUALLY DISTINGUISHABLE FROM TH E FACTS OF THE CASE BEFORE US. FURTHER, HE SUBMITTED THAT SUB-LEASED CONTRACTORS CANNOT BE REGARDED AS ELIGIBLE FOR DEDUCTIO N UNDER SECTION 80IA(4) OF THE ACT. 6.1. AS REGARDS THE CONTENTION OF THE ASSESSEE THAT SIN CE THE ASSESSEE HAS RECEIVED APPROVAL FROM VARIOUS GOVE RNMENT DEPARTMENTS TO OPERATE AND MAINTAIN THE CARGO FACILITY, IT SHOULD BE CONSIDERED AS HAVING ENTERED INTO AN AGREEMENT WIT H THE GOVERNMENT OF INDIA ITSELF, THE LD. D.R. SUBMITTED THAT THE APPROVALS GIVEN BY VARIOUS DEPARTMENTS OF THE GOVERNME NT I.E., CUSTOMS AUTHORITIES ETC., IS ONLY FOR CARRYING ON THE FUNCTIONS EFFECTIVELY, BUT CANNOT BE DEEMED TO HAVE GIVEN THE APPR OVAL 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 BEFO RE US FOR ADJUDICATION IS WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION 9 UNDER SECTION 80IA(4) OF THE ACT. FOR PROPER APPRECIATI ON 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 F ULFILS 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 C ONSTITUTED UNDER ANY CENTRAL OR STATE ACT; (B) IT HAS ENTERED INTO AN AGREEMENT WITH THE CENTR AL GOVERNMENT OR A STATE GOVERNMENT OR A LOCAL AUTHORI TY OR ANY OTHER STATUTORY BODY FOR (I) DEVELOPING OR (II) OPE RATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAIN TAINING A NEW INFRASTRUCTURE FACILITY; (C) IT HAS STARTED OR STARTS OPERATING AND MAINTAIN ING THE INFRASTRUCTURE FACILITY ON OR AFTER THE 1ST DAY OF APRIL, 1995: PROVIDED THAT WHERE AN INFRASTRUCTURE FACILITY IS TRANSFERRE D ON OR AFTER THE 1ST DAY OF APRIL, 1999 BY AN ENTERP RISE WHICH DEVELOPED SUCH INFRASTRUCTURE FACILITY (HEREAFTER R EFERRED TO IN THIS SECTION AS THE TRANSFEROR ENTERPRISE) TO ANOTH ER ENTERPRISE (HEREAFTER IN THIS SECTION REFERRED TO AS THE TRANS FEREE ENTERPRISE) FOR THE PURPOSE OF OPERATING AND MAINTA INING THE INFRASTRUCTURE FACILITY ON ITS BEHALF IN ACCORDANCE WITH THE AGREEMENT WITH THE CENTRAL GOVERNMENT, STATE GOVERN MENT, LOCAL AUTHORITY OR STATUTORY BODY, THE PROVISIONS O F THIS SECTION SHALL APPLY TO THE TRANSFEREE ENTERPRISE AS IF IT WERE THE ENTERPRISE TO WHICH THIS CLAUSE APPLIES AND THE DEDUCTION FROM PROFITS AND GAINS WOULD BE AVAILABLE TO SUCH T RANSFEREE ENTERPRISE FOR THE UNEXPIRED PERIOD DURING WHICH TH E TRANSFEROR ENTERPRISE WOULD HAVE BEEN ENTITLED TO T HE DEDUCTION, IF THE TRANSFER HAD NOT TAKEN PLACE. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, 'INFR ASTRUCTURE FACILITY' MEANS (A) A ROAD INCLUDING TOLL ROAD, A BRIDGE OR A RAIL SYST EM; 10 (B) A HIGHWAY PROJECT INCLUDING HOUSING OR OTHER ACTIVI TIES BEING AN INTEGRAL PART OF THE HIGHWAY PROJECT; (C) A WATER SUPPLY PROJECT, WATER TREATMENT SYSTEM, IRR IGATION PROJECT, SANITATION AND SEWERAGE SYSTEM OR SOLID WA STE MANAGEMENT SYSTEM; (D) A PORT, AIRPORT, INLAND WATERWAY, INLAND PORT OR NAVIGATIONAL CHANNEL IN THE SEA; 7.1. FROM A LITERAL READING OF THE ABOVE PROVISION, IT IS CLEAR THAT THE DEDUCTION IS ALLOWABLE NOT ONLY FOR DEVEL OPMENT OF A INFRASTRUCTURE FACILITY, BUT IS ALSO ALLOWABLE IN CAS E OF OPERATING AND MAINTAINING OR DEVELOPING, OPERATING AND MAINTAIN ING AN INFRASTRUCTURE FACILITY. IN THE CASE BEFORE US, THE ASS ESSING OFFICER AND THE CIT(A) HAVE HELD THAT THE ASSESSEE HAS NOT CREAT ED ANY NEW INFRASTRUCTURE FACILITY BUT IS ONLY DOING THE OPE RATION 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 SECTIO N 80IA(4) OF THE ACT. 7.2. GHIAL HAS DEVELOPED THE RAJIV GANDHI INTERNATION AL AIRPORT AT HYDERABAD. CARGO HANDLING FACILITY IS AN I NTEGRAL PART OF THE AIRPORT. GHIAL HAS ASSIGNED THE OPERATION AND MAINTENANCE OF THE CARGO FACILITY TO THE ASSESSEE. VID E FACILITY LEASE AGREEMENT, MENZIES HAS AGREED TO OWN, PROCURE, INSTALL AND COMMISSION THE FACILITIES AND THE ADDITIONAL FACIL ITIES (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 TH E RIGHT FOR THE OPERATION AND MAINTENANCE OF THE CARGO TER MINAL. 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 11 SUPPORT OF HIS CONTENTION THAT CARGO FACILITY IS ALSO I NFRASTRUCTURE FACILITY U/S 80IA(4) OF THE ACT. WE FIND THAT IN THE SAI D CASE, THE HON'BLE HIGH COURT WAS CONSIDERING WHETHER THE ASSESSE E THEREIN OPERATING AND MAINTAINING A CONTAINER FREIGHT STATION (CF S), IS ELIGIBLE FOR DEDUCTION U/S 80IA(4). THE HON'BLE HIGH COURT HAS UPHELD THE ORDER OF THE TRIBUNAL THAT THE CFS ARE CUS TOMS AREA ATTACHED TO A PORT AND THE WORK RELATED TO CUSTOMS IS PER FORMED AT THESE INLAND CONTAINER DEPOTS/CONTAINER FREIGHT STATIONS AND ACCORDINGLY, INLAND CONTAINER DEPOTS AND CFS ARE INL AND PORTS AS THEY CARRY OUT FUNCTIONS LIKE WARE HOUSING, CUSTOM S CLEARANCE AND TRANSPORT OF GOODS FROM ITS LOCATION TO THE SEAPOR TS AND VICE VERSA BY RAILWAY OR BY TRUCKS IN CONTAINERS. 7.3. IN THE CASE BEFORE US ALSO, THE ASSESSEE IS H ANDLING THE CARGO FACILITY WHICH IS INTO SIMILAR ACTIVITIES. FU RTHER, THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF OCEAN SPARKLES LTD HAS HELD THAT WHERE THE ASSESSEE THEREIN WAS REQUIR ED TO FULFILL THE DEVELOPERS OBLIGATION PERTAINING TO OPERA TION AND MAINTENANCE OF PORTS AS LAID DOWN UNDER THE ORIGINAL A GREEMENT BETWEEN THE DEVELOPERS AND SPECIFIED AUTHORITIES, IT I S EXACTLY THE SITUATION WHICH HAS BEEN CONTEMPLATED BY THE PROVISO T O SECTION 80IA(4)(I) OF THE ACT. AS REGARDS THE OBJECTION OF THE R EVENUE THEREIN THAT TWO PERSONS ARE NOT TO GET THE DEDUCTION U/S 8 0IA FOR THE MAINTENANCE OF THE SAME FACILITY, THE TRIBUNAL HELD THAT ASSESSEES CLAIM THEREIN WAS RESTRICTED TO ITS PERFORMAN CE OF JOB AND IT WAS CONCERNED WITH THAT ACTIVITY ONLY. 7.4. UNDER THE EXPLANATION TO SECTION 80IA(4), THE DEFINITION OF INFRASTRUCTURE FACILITY INCLUDES AIRP ORT WITHIN ITS SCOPE AND THE CARGO FACILITY IS AN INTEGRAL PART OF TH E AIRPORT. THE COORDINATE BENCH OF THIS TRIBUNAL AT BANGALORE IN THE C ASE OF 12 MENZIES AVIATION BOBBA (BANGALORE) PVT. LTD (CITED SUP RA) HAS HELD THE CARGO FACILITY TO BE INFRASTRUCTURE FACILI TY ELIGIBLE FOR DEDUCTION U/S 80IA(4) OF THE ACT. FURTHER, IT IS SEEN THA T GHIAL HAS CONSTRUCTED THE CARGO BUILDING AS PER THE SPECIFICA TION OF THE MENZIES AND MENZIES HAS PROVIDED THE FACILITIES AT THE CARGO BUILDING AND WHILE GHIAL HAS LEASED OUT THE CARGO TER MINAL TO THE ASSESSEE, MENZIES HAS LEASED THE FACILITIES TO THE ASSESSEE AND IT IS THE RESPONSIBILITY OF THE ASSESSEE TO OPERA TE AND MAINTAIN THE CARGO FACILITY IN ACCORDANCE WITH THE OBL IGATION OF GHIAL TO OPERATE AND MAINTAIN THE FACILITY BY VIRTUE OF THE CONCESSION GRANTED BY THE GOVT. OF INDIA. EACH ASSESS EE 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 CANN OT BE ANY DUPLICATION OF THE CLAIM. THEREFORE, WE ARE OF THE O PINION THAT THE CARGO FACILITY OPERATED AND MAINTAINED BY THE ASSE SSEE IS INFRASTRUCTURE FACILITY ELIGIBLE FOR DEDUCTION U/S 80 IA(4) OF THE ACT. 7.5. THE SECOND OBJECTION OF THE REVENUE IS THAT THE ASSESSEE HAS NOT ENTERED INTO ANY AGREEMENT WITH THE C ENTRAL GOVT., OR STATE GOVT. OR LOCAL AUTHORITY OR A STATUTORY B ODY AS PROVIDED U/S 80IA(4) OF THE ACT. IT IS THE CONTENTION O F THE ASSESSEE THAT GOVT. OF INDIA HAS AUTHORIZED GHIAL TO GRA NT FURTHER RIGHTS IN RESPECT OF ANY OF ITS ACTIVITIES, PURSU ANT TO WHICH GHIAL HAS ENTERED INTO AN AGREEMENT WITH THE ASSESSEE AND THEREFORE, THERE IS NO REQUIREMENT OF THE ASSESSEE TO EN TER INTO A SEPARATE AGREEMENT WITH THE GOVT. IN SUPPORT OF THIS CON TENTION, THE ASSESSEE HAS RELIED ON THE DECISION OF THE COORDIN ATE BENCH IN THE CASE OF OCEAN SPARKLES LTD. IN THE SAID CASE, THE ASSESSEE THEREIN, ENGAGED IN THE BUSINESS OF OPERATION AND MAIN TENANCE OF PORTS, CARGO SERVICES AND OTHER RELATED SERVICES, HAD ENTERED INTO 13 AGREEMENT FOR OPERATION AND MAINTENANCE OF PORT, WITH DEVELOPERS WHO WERE ENGAGED IN DEVELOPMENT AND OPERA TION OF PORTS AND HAD ENTERED INTO AN AGREEMENT WITH SPECIFIED AUTHORITIES I.E. STATE GOVT. FOR DEVELOPMENT AND MAINTEN ANCE 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 C OMPANY IN ACCORDANCE WITH ORIGINAL AGREEMENT WITH SPECIFIED AUTHORITIES AFTER 1-4-99 AND HELD THAT AS PER THE PROVISO TO SECTIO N 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 CON SIDERATION THE PROVISO TO SECTION 80IA(4)(I) TO HOLD THAT THE PROV ISO AIMS AT QUALIFYING THE TRANSFEREE ENTERPRISES, AS ENTERPRISE ELIGIBLE FOR DEDUCTION UNDER THIS SECTION PROVIDED, THE OTHER CONDITI ONS BE SATISFIED AND THAT THE PROVISO DOES NOT REQUIRE ANY DIRE CT AGREEMENT BETWEEN THE TRANSFEREE ENTERPRISE AND THE SPE CIFIED AUTHORITY. 7.6. FURTHER, THE LEARNED COUNSEL FOR THE ASSESSEE HA S ALSO PLACED RELIANCE UPON THE DECISION OF HONBLE M ADRAS HIGH COURT IN THE CASE OF A.L. LOGISTICS P. LTD., WHEREIN IT HAS BEEN HELD THAT WHERE THE PROPOSAL OF THE ASSESSEE WAS ACCEPT ED BY THE GOVERNMENT ON CERTAIN CONDITIONS, WHICH WERE DULY COMP LIED WITH BY THE ASSESSEE, THERE IS NO NEED TO INSIST FOR S PECIFIC EXECUTION OF AGREEMENTS. IN THE SAID CASE, THE ASSESSEE THEREIN HAD APPLIED TO THE MINISTRY OF COMMERCE AND INDUSTRY, GOVERNMENT OF INDIA, INFRASTRUCTURE DIVISION OF THE DE PARTMENT OF COMMERCE FOR SETTING-UP OF A CFS AT HALDIA FOR HAND LING, IMPORT AND EXPORT OF CARGO WHICH HAS BEEN APPROVED BY THE MINISTRY, SUBJECT TO EXECUTION OF CERTAIN DOCUMENTS OF C OMPLIANCE OF OTHER TERMS AND CONDITIONS AS STATED IN THE LETTER. T AKING THE 14 SAME INTO CONSIDERATION, THE HONBLE MADRAS HIGH COURT HELD THAT SINCE THE PROPOSAL OF THE ASSESSEE WAS ACCEPTED BY THE GOVERNMENT ON CERTAIN CONDITIONS WHICH WERE DULY COMPL IED WITH BY THE ASSESSEE, THERE IS NO NEED TO INSIST FOR THE SPEC IFIC EXECUTION OF THE AGREEMENTS. SIMILARLY, IN THE CASE BE FORE US, THE ASSESSEE HAS APPLIED TO THE GOVERNMENT OF INDIA, MINIS TRY OF CIVIL AVIATION FOR REGISTRATION AS A REGULATED AGENT FOR HA NDLING THE CARGO FACILITIES AT HYDERABAD INTERNATIONAL AIRPORT A ND VIDE LETTER DATED 24.11.2008, THE ASSESSEE WAS GRANTED THE REGISTRAT ION WHILE GHIAL HAS GRANTED THE ASSESSEE THE RIGHT TO HANDL E THE CARGO FACILITIES BY VIRTUE OF THE AGREEMENT. THE ASSES SEES CONTENTION IS THAT THE ASSESSEE HAS BEEN RECOGNIZED ALS O 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 HONBLE MADRAS HIG H COURT IS APPLICABLE TO THE ASSESSEE AND THE ASSESSEES CONTENTION THAT SINCE THE ASSESSEE HAS BEEN GIVEN APPROVAL BY THE MIN ISTRY OF CIVIL AVIATION, IT IS NOT NECESSARY TO ENTER INTO A SP ECIFIC AND INDEPENDENT AGREEMENT WITH THE GOVERNMENT FOR CLAIMING DEDUCTION UNDER SECTION 80IA OF THE ACT, HAS TO BE ACCE PTED. 7.7. THE ASSESSEE HAS ALSO PLACED RELIANCE UPON THE DEFINITION OF REGULATED AGENT UNDER CLAUSE (5) OF R ULE-2 OF THE AIRCRAFT (SECURITY) RULES, 2011. THEREFORE, ACCORDIN G 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 F OR AIRCRAFT 15 OPERATORS AND IT DOES NOT MEAN THAT ASSESSEE HAS BEEN RECOGNIZED AS AN AGENT TO OPERATE AND MAINTAIN THE CAR GO FACILITIES AT THE AIRPORT. IN FACT, IT IS THE OTHER WAY R OUND, 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 AV IATION BOBBA, BANGALORE IN M.P.NO.19/BANG/2014 IN ITA.NO.1160/BAN G/2012 DATED 05.10.2015 WHEREIN THE TRIBUNAL HAS ACCEPTED BA NGALORE INTERNATIONAL AIRPORT LIMITED AS A STATUTORY BODY UNDER S ECTION 80IA(4) OF THE ACT. WE FIND THAT IN THE SAID CASE, THE T RIBUNAL HAD RELIED UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT THEREIN I.E., THE HONBLE KARNATAKA HIGH COURT IN A WRIT PETITIO N FILED BY M/S. FLEMINGO DUTY-FREE SHOPS P. LTD., AGAINST THE BA NGALORE INTERNATIONAL AIRPORT LTD.,(BIAL) WHEREIN THE HONBLE KARNATAKA HIGH COURT HAS HELD BIAL TO BE A STATUTORY AUTHORITY AS IT IS DISCHARGING STATUTORY FUNCTIONS OF THE GOVERNMENT. THER E IS NO SUCH DECISION IN RESPECT OF HYDERABAD INTERNATIONAL AI RPORT LTD., BY THE JURISDICTIONAL HIGH COURT I.E., HONBLE HIGH C OURT OF TELANGANA AND ANDHRA PRADESH. HOWEVER, SINCE WE HAV E ALREADY HELD THAT THE ASSESSEE DOES NOT REQUIRE A SPECIFIC AND INDEPENDENT AGREEMENT WITH THE GOVERNMENT FOR CLAIMING DEDUCTION UNDER SECTION 80IA(4), WE DO NOT FIND IT NEC ESSARY TO ADJUDICATE THIS ISSUE AT THIS STAGE. IN VIEW OF THESE FAC TS, THE ASSESSEES APPEAL IS ALLOWED. 8. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED . 16 ORDER PRONOUNCED IN THE OPEN COURT ON 06.10.2016. SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 06 TH OCTOBER, 2016 VBP/- COPY TO 1. HYDERABAD MENZIES AIR CARGO PVT. LTD., AIR CARGO TERMINAL, RAJIV GANDHI INTERNATIONAL AIRPORT, SHAMSHABAD 500 4 09 RANGA REDDY DISTRICT. 2. DY. COMMISSIONER OF INCOME TAX, CIRCLE-2(2), I.T . TOWERS, A.C. GUARDS, HYDERABAD. 3. CIT(A)-2, HYDERABAD. 4. PR. CIT-2, HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE.