MAX AEROSPACE AND AVIATION LTD, MUMBAI V. JT CIT (OSD) 8(2), MUMBAI

ITA 43/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3171 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 02-01-2014
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Competent authority
• Section: 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ./ I.T.A. NO. 43/MUM/2014 ( / ASSESS MENT YEAR: 2009 - 10 ) MAX AEROSPACE AND AVIATION LTD. MALKANI CHAMBERS, OFF. NEHRU ROAD, VILE PARLE (E), MUMBAI - 400 099 / VS. JT. CIT(OSD) - 8(2), AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 ./ ./ PAN/GIR NO. AABCM 9671 M ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI VIJAY MEHTA / RESPONDENT BY : SHRI NEIL PHILIP / DATE OF HEARING : 20.7.2016 / DATE OF PRONOUNCEMENT : 24 .8.2 016 / O R D E R PER R. C. SHARMA, A. M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER BY THE LD. CIT(A) - 17 , MUMBAI DATED 0 7.10.2013 FOR THE ASSESSMENT YEAR (A.Y.) 2009 - 10 , IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 . 2. THE GRIEVANCE OF THE ASS ESSEE REV OLVES AROUND DECLINE OF CLAIM OF DEDUCTION U/S. 80 - IB IN RESPECT OF INCOME FROM BUSINESS OF REPAIR AND MAINTENANCE OF AIRCRAFT DERIVED FROM INFRASTRUCTURAL FACILITY BUILD BY THE ASSESSEE, I.E., A I HANG A R AND HANG A R. 2 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) 3. RIVAL CONTENTIONS HAVING BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT T HE ASSESS E E IS ENGAGED IN BUSINESS OF REPAIR AND MAINTENANCE OF AIRCRAFT AT JUHU AIRPORT. HOWEVER TILL 2006 THE ASSESSE E HAD NO FACILITY IN AIRPORT PREMISES TO PROVIDE THESE SERVICES AND ASSESSE E WAS OPERATING FROM OUTSIDE THE AIRPORT. AS A RESULT ONLY LIMITED KIND OF REPAIR AND MAINTE NANCE ACTIVITY WAS PERFORMED BY AS SESSE E. THE AIRPORT AUTHORITY OF INDIA (AAI) WHICH IS ENGAGED IN DEVELOPMENT AND OPERATION OF AIRPORT TH ROUGHOUT INDIA , CAME OUT WITH TENDER FOR DEV ELOPING HANGAR FOR REPAIR AND MAINTENANCE OF AIRCRAFT AT JUHU AIRPORT ON 07.06.2001. THE ASSESS EE UNDERTOOK THE DEVELOPMENT OF HANGAR AND ENTERED INTO A CONCESSION AGREEMENT FOR THE SAID PURPOSE WITH AAI ON 19.12 .2002. AS PER THE TERMS OF THE AGREEMENT THE ASSESS E E WAS TO CONSTRUCT THE HANGAR ON BOT BASIS AND WAS TO OPERATE THE SAME FOR 15 YEAR S. T HE ASSESS E E DEVELOPED THE SAID HA NGAR AND CLAIMED DEDUCTION U/S. 80IA(4) OF THE ACT ON THE INCOME RECEIVED FROM REPAIR S AND MAINTENANCE OF AIRCRAFTS. HOWEVER, A.O. DECLINED THE ASSESSEES CLAIM ON THE PLEA THAT THERE ARE MANY HANGARS AT THE AIRPORT AND IF THE ASSESSEE'S CLAIM THAT THE DEVELOPMENT OF HANGAR IS COVERED UNDER DEFINITION OF 'INFRASTRUCTURAL FACILITY' IS ACCEP TED THEN EVERY STRUCTURE SUCH AS SHOPPING MALLS, HOTELS, RESTAURANTS WHICH HAVE UTILITY PURPOSE OF AIRPORT OR FORMING PART OF AIRPORT WOULD BE ELIGIBLE FOR DEDUCTION U/S 80 I A OF THE ACT. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER DENIED DEDUCTION U/S 80 I A (4) OF THE ACT. 4. BY THE IMPUGNED ORDER THE CIT(A) CONFIRMED THE ACTION OF THE A.O. BY OBSERVING THAT DEVELOPING , OPERATING AND MAINTENANCE OF AIRPORT IS VERY VAST 3 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) INFRASTRUCTURAL FACILITY HAVING NUMEROUS OPERATIONS. HE WAS OF THE VIEW THAT DEDUCTION U/S 80I A(4) OF THE ACT CAN BE ADMISSIBLE ONLY WHEN AN ASSESS E E IS CAPABLE OF PROVIDING ALL THE OPERATIONS AT THE AIRPORT. HE HELD THAT THE ASSESS E E HAS DEVELOPED ONLY A PART OF INFRASTRUCTURAL FACILITY AND WOULD NOT BE ELIGIBLE FOR DEDUCTION U/S 80 IA(4) OF T HE ACT AND CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 5. AGAINST THE ORDER OF THE CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6 . IT WAS ARGUED BY THE LD. AR THAT EVEN THOUGH THE ASSESSE E HAS NOT DEVELOPED THE ENTIRE AIRPORT BUT O NLY PART OF THE AIRPORT FOR WHICH THE ASSESS E E IS ELIGIBLE FOR DEDUCTION U/S 80IA(4) OF THE ACT EVEN IT AMOUNTS TO DEVELOPING PART OF THE INFRASTRUCTURAL FACILITY. IN ORDER TO SUPPORT THE SAID CONTENTION RELIANCE WAS PLACED ON THE ORDER OF THE HON BLE TRIB UNAL, PUNE BENCH; IN THE CASE OF B T PATIL & SONS BELGAUM CONSTRUCTIONS P LTD BEING ITA NO: 1408 AND 1406/PN/2003 DATED 28.02.2013 WHEREIN IT HAS BEEN HELD THAT EVEN IF THE ASSESSE E IS DEVELOPING PART OF THE INFRASTRUCTURAL FACILITY, HE IS ELIGIBLE FOR DED UCTION U/S. 80IA(4) OF THE ACT. WHILE ARRIVING AT THE SAID CONCLUSION THE HON BLE TRIBUNAL HAS PLACED RELIANCE ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ABG HEAVY INDUSTRIES (322 ITR 323 ). 6.1 RELIANCE WA S ALSO PLACED ON THE ORDER OF TH E HON BLE TRIBUNAL, AMRITSAR BENCH, IN THE CASE OF TRG INDUSTRIES V. DCIT DATED 19.03.2013 WHEREIN IT HAS BEEN HELD THAT ASSESS E E ENGAGED IN THE ACTIVITY OF EXTENSION OF RUNWAY AT AIRPORT IS SAID TO BE A 4 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) DEVELOPER OF INFRASTRUCTURAL FACILITY AND HENCE ELIG IBLE FOR DEDUCTION U/S. 80IA(4) OF THE A CT. 6.2 R ELIANCE WA S ALSO PLACED ON THE ORDER OF THE HON BLE TRIBUNAL, BANGALORE BENCH, IN THE CASE OF DY. CIT V. M/S MENZIES AVIATION BOBBA PVT. LTD. BEING ITA NO: 22/BANG/2014 DATED 24.06.2016 WHEREIN IT WAS HELD THAT CONSTRUCTION OF CARGO TERMINAL FOR HANDLING OF CARGO CONSTITUTES AN INTEGRAL PART OF THE AIRPORT AND DEDUCTION IS ADMISSIBLE ON SUCH INCOME U/S 80IA(4) OF THE ACT 6.3 R ELIANCE WAS ALSO P LACED ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ABG HEAVY INDUSTRIES (322 ITR 323). IN THE SAID CASE, THE ASSESSE E WAS PROVIDING SERVICE OF SUPPLY, INSTALLATION, TESTING, COMMISSIONING AND MAINTENANCE OF CRANES AND IT CLAIMED DEDUCTION U/S . 80IA(4) OF THE ACT ON THE INCOME RECEIVED FROM OPERATION AND MAINTE NANCE OF CRANE AT PORT. IT WAS HELD THAT ASSESS E E HAD DEVELOPED CRANES FOR PROVIDING LOADING AND UNLOADING SERVICE AT THE PORT AND WHICH AMOUNTS TO DEVELOPMENT OF PORT WHICH IS AN INFRASTRUCTURE FACILITY AS PER S. 80IA(4) OF THE ACT. IT WAS HELD T HAT THE A SSESSE E IS ELIGIBLE FOR DEDUCTION U/S 80IA(4) OF THE ACT EVEN IF THE ASSESS E E HAS DEVELOPED A PART OF THE PORT AND NOT THE WHOLE OF I T. 7. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF THE LOWER AUTHORITY AND CONTENDED THAT INCOME GENERATED THROUG H REPAIR AND MAINTENANCE OF AIRCRAFT THROUGH HANGER DOES NOT QUALIFY FOR DEDUCTION U/S. 80 - IB, SINCE SAME IS NOT IN THE NATURE OF INFRASTRUCTURE . 5 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAD ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY THE LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS CITED BY THE LD. AR AND LD. DR DURING THE COURSE OF HEARING BEFORE US, IN THE CONTEXT OF FACTUAL MATRIX OF THE INSTANT CAS E. FROM THE RECORD, WE FOUND THAT THE ASSESSEE UNDERTOOK THE DEVELOPMENT OF HANGAR AND ENTERED INTO THE AGREEMENT FOR THE SAID PURPOSE WITH AIRPORT AUTHORITY OF INDIA DATED 19.12.2002. AS PER THE TERMS OF THE AGREEMENT, THE ASSESSEE WAS TO CONSTRUCT THE HA NGER ON BOT BASIS AND WAS UNDER OBLIGATION TO OPERATE THE SAME FOR 15 YEARS . FURTHER, UPON COMPLETION OF DEVELOPMENT OF HANGAR ASSESSE E WAS TO OPERATE AND MAINTAIN THE HANGAR AND USE THE SAME EXCLUSIVELY FOR AIRCRAFT MAINTENANCE WORKS INCLUDING SERVICING A ND REPAIRS TO THE AIRCRAFT. AS PER THE TERMS AND CONDITIONS OF AGREEMENT THE SAID HANGAR COULD NOT BE USED FOR ANY OTHER PURPOSE EXCEPT FOR REPAIRING, SERVICING AND MAINTENANCE OF AIRCRAFT . AO WAS OF THE VIEW THAT SINCE THE ASSESSEE IS ENGAGED IN SERVICE A ND REPAIR OF AIRCRAFT PARTS, THE SAME IS COVERED UNDER THE DEFINITION OF INFRASTRUCTURE FACILITY AS PROVIDED U/S. 80 - IA(4). AS PER A.O., THERE ARE MANY HANGARS AT THE AIRPORT AND IF THE ASSESSEE CLAIM S THAT THE DEVELOPMENT OF HANGAR IS COVERED UNDER THE DE FINITION OF INFRASTRUCTURAL FACILITY IS ACCEPTED, THEN EVERY STRUCTURE SUCH AS SHIPPING MALL, HOTELS, RESTAURANT WHICH HAVE UTILITY PURPOSE OF AIRPORT OR FORMING PART OF AIRPORT WOULD BE ELIGIBLE FOR DEDUCTION U/S. 80 - IA OF THE ACT. FOR BETTER UNDERSTAND ING AS TO WHETHER DEVELOPMENT OF HANGAR AT 6 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) AIRPORT AND RENDERING SERVICES OF REPAIR AND MAINTENANCE OF AIRCRAFT, CON STITUTE INFRASTRUCTURE FACILITY, THE PROVISION OF SECTION 80 - IA OF THE ACT IS REPRODUCED AS UNDER: [DEDUCTIONS IN RESPECT OF PROFITS AND G AINS FROM INDUSTRIAL UNDERTAKINGS OR ENTERPRISES ENGAGED IN INFRASTRUCTURE DEVELOPMENT, ETC. 80 - IA. [(1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSE E . (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 A UTHORITY 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 FO R (I) DEVELOPING OR (I I ) OPERATING AND MAINTAINING OR (III) DEVELOPING OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY,] (C) IT HAS STARTED OR STARTS OPERATING AND MAINTAINI NG THE INFRASTRUCTURE FACILITY ON OR AFTER THE 1ST DAY OF APRIL, 1995: [EX PLANATION. - FOR THE PURPOSES OF THIS CLAUSE, 'INFRASTRUCTURE FACILITY' MEANS - (A) A ROAD INCLUDING TOLL RO A D, A BRIDGE OR A RAIL SYSTEM,' (B) A HIGHWAY PROJECT INCLUDING HOUSING OR OTHER ACTIVITIES BEING AN INTEGRAL PART OF THE HIGHWAY PROJECT' (C) A WATER SUPPLY PROJECT WATER TREATMENT SYSTEM, IRRIGATION PROJECT SANITATION AND SEWERAGE SYSTEM OR SOLID WASTE 7 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) MANAGEMENT SYSTEM,' (D) A PORT AIRPORT, INLAND WATERWAY [INLAND PORT, NAVIGATIONAL CHANNEL IN THE SEA]} IT IS EVIDENT FROM THE ABOVE DEFINITI ON THAT AIRPORT IS ONE OF THE DEFINED INFRASTRUCTURAL FACILITY, DEVELOPMENT OF WHICH IS ELIGIBLE FOR DEDUCTION U/S 80IA(4) OF THE ACT. H ANGAR IS VERY MUCH AN ESSENTIAL PART OF THE AIRPORT WHICH PROVIDES FOR MAINTENANCE OF AIRCRAFT. AS PER AAI ACT, 1994 A IRPORT IS DEFINED AS UNDER: 'AIRPORT' MEANS A LANDING AND TAKING OFF AREA FOR AIRCRAFTS, USUALLY WITH RUNWAYS AND AIRCRAFT MAINTENANCE AND PASSENGER FACILITIES AND INCLUDES AERODROME AS DEFINED IN CLAUSE (2) OF SECTION 2 OF THE AIRCRAFT ACT 1934 (22 OF 1 934) . IT IS CLEAR FROM THE ABOVE DEFINITION THAT AIRPORT INCLUDES AIRCRAFT MAINTENANCE AND ALSO INCLUDES AERODROME AS DEFINED IN S, 2(2) OF THE AIRCRAFT ACT, 1934, FURTHER AS PER AIRCRAFT ACT, 1934 AERODROME IS DEFINED AS UNDER: 'AERODROME' MEANS ANY DE FINITE OR LIMITED GROUND OR WATER AREA INTENDED TO BE USED, EITHER WHOLLY OR IN PART FOR THE LANDING OR DEPARTURE OF AIRCRAFT AND INCLUDES ALL BUILDINGS, SHEDS, VESSELS, PIERS AND OTHER STRUCTURES THEREON OR APPERTAINING THERETO . I T IS CLEAR FROM ABOVE THAT HANGAR IS A STRUCTURE BUILT FOR AIRCRAFT MAINTENANCE AND HENCE WOULD BE FORMING PART OF THE AIRPORT. IT IS NOT IN DISPUTE THAT THE ASS ESSEE HAS NOT DEVELOPED ENTIRE AIRPORT BUT HAS DEVELOPED ONLY HANGARS WHICH CONSTITUTE A PART OF AIRPORT. EVEN IF THE ASS ESSEE IS DEVELOPING PART OF INFRASTRUCTURAL FACILITY, ELIGIBILITY OF DEDUCTION U/S. 80 - IB(4) CANNOT BE DECLINED. PUNE BENCH IN THE CASE OF B T PATIL & SONS BELGAUM CONSTRUCTIONS P LTD (SUPRA) HELD THAT EVEN IF THE ASSESSEE IS DEVELOPING 8 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) PART OF THE INF RASTRUCTURAL FACILITY, HE IS ELIGIBLE FOR DEDUCTION U/S. 80 - IA(4). THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ABG HEAVY INDUSTRIES ( SUPRA) HELD THAT THE ASSESSEE DEVELOPING CRANES FOR PROVIDING LOADING AND UNLOADING SERVICES AT THE PORT AMOUNTS TO DEVELO PING A PORT WHICH IS A INFRASTRUCTURAL FACILITY AS PER SECTION 80 - IA(4), THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80 - IA(4) EVEN IF THE ASSESSEE HAS DEVELOPED ONLY A PART OF THE PORT AND NOT WHOLE PORT. T HE LEGISLATIVE INTENT OF THE SECTION WA S TO GIVE INCENTIVE TO INVESTMENT FOR INFRASTRUCTURAL GROWTH IN THE COUNTRY. THE CBDT HAD ISSUED A CIRCULAR THAT STRUCTURES FOR STORAGE, LOADING AND UNLOADING, ETC. WILL FALL WITHIN THE DEFINITION OF PORT FOR PURPOSE OF S. 80 - IA OF THE ACT. UNDER THESE CIR CUMSTANCES THE HONBLE BOMBAY HIGH COURT HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80 - IA OF THE ACT EVEN IF THE ASSESSEE HAS NOT DEVELOPED THE ENTIRE PORT BUT ONLY DEVELOPED A PART OF IT. 9. NOW COMING TO THE OBJECTION OF THE CIT(A ) WHO HAVE DISTINGUISHED THE ABOVE DECISION O F BOMBAY HIGH COURT ON THE GROUND THAT IN CASE OF PORT THE DEPARTMENT HAD ISSUED A CIRCULAR THAT THE SAID STRUCTURES BUILT FOR PROVIDING STORAGE, LOADING AND UNLOADING SERVICES WILL FALL WITHIN THE DEFINITION OF PORT WHERE AS IN THE CASE OF ASSESS E E THERE IS NO SUCH CIRCULAR HENCE, THE FACTS OF THAT CASE WILL NOT APPLY TO THE ASSESS E E. IN THIS REGARD, WE ARE OF THE VIEW THAT THE LEGISLATIVE INTENT BEHIND S . 80IA(4) OF THE ACT WAS TO GIVE INCENTIVE TO INVESTMENT FOR INFRASTRU CTURAL GROWTH IN THE COUNTRY. THIS INTENT HAS ALSO B E EN CONSIDERED BY THE HON'BLE HI G H COURT IN ABG 9 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) HEAVY INDUSTRIES (SUPRA) AND HELD THAT ONE HAS TO CONSIDER THE INTENTION OF THE DEPARTMENT WHILE ISSUING THE SAID CIRCULAR. THE CIRCULAR ISSUED BY DEPARTMEN T STATING THAT STRUCTURES BUILT FOR PROVIDING STORAGE, LOADING AND UNLOADING SERVICES WILL FALL WITHIN THE DEFINITION OF PORT CLEARLY MANIFEST THE LEGISLATIVE INTENT THAT THE WHOLE FACILITY IS NOT TO BE DEVELOPED IN ORDER TO BE ELIGIBLE TO CLAIM DEDUCTION U/S 80IA(4) OF THE ACT. FOR THIS PURPOSE RELIANCE CAN BE PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO V. CIT (196 ITR 188) WHEREIN IT HAS BEEN EMPHASIZED THAT A PROVISION IN TAXING STATUE GRANTING INCENTIVES FOR PROMOTING GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY. ALL THE DECISIONS STATED HEREINABOVE HAVE RELIED ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT AND HELD THAT THE ASSESSE E IS ELIGIBLE FOR DEDUCTION U/S. 80 I A(4) OF THE ACT EVEN IF IT HAS DEVELOPED P ART OF THE INFRASTRUCTURAL FACILITY AS DEFINED IN S. 80 I A(4) OF THE AC T. 10. IT IS PERTINENT TO MENTION HERE THAT IN THE CASE OF TRG INDUSTRIES V. DCIT DATED 19.03.2013 EXEMPTION WAS GRANTED BY THE HON'BLE AMRITSAR BENCH ON EXTENSION OF RUNWAY AND IN CASE OF DY. CIT V. M/S MENZIES AVIATION BOBBA PVT. LTD. BEING ITA NO: 22/BANG/2014 DATED 24.06.2016 EXEMPTION WAS ALLOWED O N CARGO HANDLING FACILIT Y. 11. NOW C OMING TO THE ALLEGATION OF THE A.O. TO THE EF F E CT THAT IF IT IS HELD THAT HANGAR IS AN INFRASTRUCTU RAL FACILITY FALLING UNDER THE DEFINITION OF AIRPORT THEN EVERY STRUCTURE SUCH AS SHOPPING MALLS, HOTELS, RESTAURANTS WHICH HAVE UTILITY PURPOSE OF 10 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) AIRPORT OR FORMING PART OF AIRPORT WOULD BE ELIGIBLE FOR DEDUCTION U/S 80I A OF THE ACT. IN THIS REGARD, WE F OUND THAT HANGAR IS THE PLACE FOR REPAIR AND MAINTENANCE OF AIRCRAFT AND IS AN ESSENTIAL PART OF AIRPORT. IT PERFORMS ONE OF THE CRUCIAL FUNCTION AT AIRPORT. HOWEVER S HOPPING MALLS, HOTELS AND RESTAURANTS ARE INCIDENTAL FACILITIES PROVIDED TO THE CUSTOMERS AND IT IS NOT THAT THE AIRPORT WOULD NOT FUNCTION WITHOUT IT. HANGAR BUILT BY THE ASSESSE E IS AN INTEGRAL PART OF THE AIRPORT FOR THE FUNCTIONS IT PROVIDES AND HENCE WOULD BE COVERED UNDER 'AIRPORT' WHICH IS ONE OF THE DEFINED INFRASTRUCTURAL FACILITY U/S 80I A(4) OF THE ACT. P ROPER AND TIMELY REPAIR, MAINTENANCE AND OVERHAULING OF AIRCRAFT IS SINE QUA NON OF SAFE OPERATIONS AT AIRPORT. THE NEED FOR SECURITY IN AERIAL TRANSPORTATION IN PRESENT DAY CANNOT BE OVER EMPHASIZED. CERTAINLY, THEREFORE, THIS CANNOT BE COMPARED WITH SHOPPING MALL AND RESTAURANT WHICH ARE RATHER OPTIONAL FACILITIES . 12. AFTER CONSIDERING THE ENTIRE MATERIAL BASED ON RECORD, WE FOUND THAT TH E ASSESS E E HAS DERIVED ITS INCOME FROM THE DEVELOPMENT OF INFRASTRUCTURAL FACILITY. THE HANGAR IS DEFINED AS A SHELTER TO REPAIR AND MAINTAIN THE AIRCRAFT. IT IS EVIDENT FROM THE BID DOCUMENT OF AAI THAT BIDS ARE INVITED FOR CONSTRUCTING HANGARS FOR REPAIRING AND MAINTAINING THE AIRCRAFT , THE RELEVANT PART OF THE SAME IS REPRODUCED AS UNDER: 'AIRPO RTS AUTHORITY OF INDIA (AA I ) INVITES EXPRESSION OF INTEREST FOR CONSTRUCTION OF AIRCRAFT MAINTENANCE HANGARS ON 'BUILD, OPERA TE AND TRANSFER (BOT)' BASIS AT LUCKN OW, JEIPUR. NAG PUR. BHUBENESWSR; HYDEREBED, VIJAYWADA, BHOP A L. AHMEDEBED. GUWAHATI AND JUHU AIRPORT FOR WHICH AAI LAND WILL BE ALLOTTED TO THE SUCCESSFUL BIDDERS ON LEASE FOR A PERIOD OF 15 YEARS. 11 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) 2. ELIGIBILITY FOR QUALIFICATION A) THE BIDDERS SHALL BE EITHER OPERATORS WHO UNDERTAKE MAJOR MAINTENANCE OF THEIR AIRCRETTS/BETICOPTERS THEMSELVES OR MAINTENANCE AGENCIES HOLDING APPROVAL OF COMPETENT AUTHORITY FOR AIRCRAFT REPAIRS AND MAJOR MAINTENANCE. DOCUMENTARY EVIDENCE IN THIS REGARD SHALL BE SUBMITTED BY THE BIDDER. IT IS ALSO EV IDENT FROM THE TENDER DOCUMENT AS PLACED AT P.B. THAT THE SAID HANGAR COULD NOT BE USED FOR ANY OTHER PURPOSE EXCEPT FOR REPAIRING, SERVICING AND MAINTENANCE OF AIRCRAFT. THE RELEVANT CLAUSE READS A S UNDER: 2.3 WITHOUT PREJUDICE TO THE GENERALITY OF THE FOREGOING CLAUSE 2.2 AND SUBJECT TO AND IN ACCORDANCE. (A) TO DEV ELOP, DESIGN, ENGINEER; PROCURE. ( B) UPON COMPLETION OF HANGAR AND DURING THE OPERATIONS PERIOD TO MANAGE, AND MAINTAIN THE HANGAR AND TO USE THE SAME EXCLUSIVELY FOR AIRCRAFT MAINTENANCE WORKS INCLUDING SERVICING AND REPAIRS TO THE AIRCRAFT ( C ) NO T TO PERMIT THE USE OF HANGAR FOR ANY PURPOSE OTHER THAN FOR REPA IRS/ SERVICING/ MAINTENANCE OF AIRCRAFTS AND FOR RELATED SUPPORT FACILITIES AND INFRASTRUCTURE INCLUDING OFFICE FACILITIES~' (D) BEAR AND PAY .. 13. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY MERIT IN THE ACTION OF THE A.O. FOR DECLINE OF CLAIM OF DEDUCTION U/S. 80 - IA(4) WITH RESPE C T TO THE INCOME DERIVED BY THE ASSESSEE FROM REPAIR AND MAINTENANCE OF AIRCRAFT THROUGH HANGARS. THUS HANGAR CONSTRUCTED BY ASSESS E E IS NOT A PLACE M ERELY TO PARK THE AIRCRAFT. THIS IS A FULL FLEDGED REPAIR AND MAINTENANCE CENTRE FOR AIRCRAFT AND HENCE REVENUE RECEIVED ON ACCOUNT OF REPAIRS AND MAINTENANCE SERVICE IS BY OPERATION OF MAINTENANCE OF HANGAR WHICH IS AN INFRASTRUCTURAL FACILITY, ELIGIBLE F OR DEDUCTION U/S. 80 - IA(4) OF I.T. ACT. 12 ITA NO. 43/MUM/2014 (A.Y. 2009 - 10) MAX AEROSPACE AND AVIATION LTD. VS. JT. CIT(OSD) 14. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 24 , 201 6 SD/ - SD/ - ( SANDEEP GOSAIN ) ( R. C. SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI ; / DATED : 24 . 0 8 .201 6 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI