M/s Menzies Avitation Bobba Pvt Ltd , Bangalore V. Deputy Commissioner of Income Tax Circle-4(1)(2), Bangalore

ITA 616/BANG/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6810 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-01-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 29-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUZAFFAR HUSSAIN BENGALURU
• Assessee Lawyers: V SRINIVASAN
• Section: 80IA; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER IT A NO. 616 /BANG/2019 ASSESSMENT YEAR: 201 4 - 1 5 M/S MENZIES AVIATION BOBBA (BANGALORE) PVT. LTD., PLOT NO.C-04, CARGO TERMINAL 1, KEMPEGOWDA INTERNATIONAL AIRPORT, BANGALORE 560 300. PAN: AAECM 6862D VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(2), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, ADVOCATE RE SPONDENT BY : S HRI MU ZAFFAR HUSSAIN , CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 2 2. 0 1 .202 1 DATE OF PRONOUNCEMENT : 27 . 0 1 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT(APPEALS), BENGALURU-9, BANGALORE DATED 07.02.20 19 FOR THE ASSESSMENT YEAR 2014-15 ON THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR A S THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, W EIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE DENIAL OF THE DEDUCTION OF RS.38,41,08,439/- CLAIMED BY THE A PPELLANT U/S.80IA OF THE ACT, ON THE GROUND THAT THE APPELLA NT HAD NOT ITA NO.616/BANG/2019 PAGE 2 OF 8 DIRECTLY ENTERED INTO AGREEMENT WITH GOVERNMENT OR ANY STATUTORY BODY AND THUS THE CONDITION MENTIONED IN CLAUSE [B] OF SECTION 80IA[4][I] OF THE ACT WAS NOT COMPLIED W ITH BY THE APPELLANT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 3. THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THA T THE CONCESSION AGREEMENT ENTERED INTO BETWEEN GOI AND B IAL PROVIDES FOR SERVICE PROVIDERS RIGHT HOLDERS [SPRH] AGREEMENT FOR A CARGO FACILITY AND ACCORDINGLY BIAL HAD ENTERED INTO THE AGREEMENT WITH THE APPELLANT FOR D EVELOPING, OPERATING AND MAINTAINING THE CARGO FACILITY UNDER THE BOT METHOD, WHICH WAS SUFFICIENT COMPLIANCE WITH THE REQUIREMENT OF CLAUSE [B] OF SECTION 80IA[4][I] OF THE ACT AS HELD BY THE HON'BLE ITAT IN THE APPELLANT'S OWN CAS E FOR THE EARLIER ASSESSMENT YEARS UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 4. THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THA T BIAL WAS ESTABLISHED BY KSIIDC AND THUS A STATUTORY BODY AS PER THE DEFINITION OF PARLIAMENT [PREVENTION OF DISQUALIFIC ATION] ACT [10 OF 1959] AND HE OUGHT NOT TO HAVE HELD THAT BIA L WAS NOT A STATUTORY BODY FOR PURPOSES OF CLAUSE [B] OF SECT ION 80IA[4][I] OF THE ACT. 5. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE CCIT/DG, THE APPELLANT DENIES ITSELF LIABLE TO BE C HARGED TO INTEREST U/S.234-A AND 234-B OF THE ACT, WHICH UNDE R THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S C ASE AND THE LEVY DESERVES TO BE CANCELLED. 6. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBL Y PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE A PPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES A S PART OF THE COSTS. 2. THE ISSUE RAISED IN THIS APPEAL IS THAT THE DENI AL OF THE DEDUCTION OF RS.38,41,08,439/- CLAIMED BY THE APPELLANT U/S.80IA OF THE ACT, ON THE GROUND THAT THE ASSESSEE HAD NOT DIRECTLY ENTERED I NTO AGREEMENT WITH ITA NO.616/BANG/2019 PAGE 3 OF 8 GOVERNMENT OR ANY STATUTORY BODY AND THUS THE CONDI TION MENTIONED IN CLAUSE [B] OF SECTION 80IA[4][I] OF THE ACT WAS NOT COMPLIED WITH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE PRESENT CASE. 3. AT THE TIME OF HEARING, THE LD. AR SUBMITTED THA T THE ISSUE IS SQUARELY COVERED BY THE EARLIER ORDERS OF TRIBUNAL IN ASSESS EES OWN CASE IN THE FOLLOWING CASES:- (I) ORDER DATED 30.1.2014 IN ITA NO.1160/BANG/2012 FOR AY 2009-10. (II) ORDER DATED 05.10.2015 IN ITA NO.1160/BANG/2012 & M P NO.19/BANG/2014 FOR AY 2009-10. (III) ORDER DATED 24.6.2016 IN ITA NO.22/BANG/2014 FOR AY 2010-11. (IV) ORDER DATED 18.1.2021 IN ITA NO.938/BANG/2019 FOR A Y 2015-16. 4. HE ACCORDINGLY SUBMITTED THAT SINCE THE FACTS AN D CIRCUMSTANCES FOR THE YEAR UNDER CONSIDERATION ARE THE SAME, THE ABOV E ORDERS OF THE TRIBUNAL ARE TO BE FOLLOWED AND ISSUE HAS TO BE DEC IDED IN FAVOUR OF THE ASSESSEE. 5. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE R ELIANCE PLACED BY THE TRIBUNAL IN THE EARLIER ORDERS ON THE JUDGMENT OF T HE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF FLEMINGO DUTYFREE SHOPS PVT. LTD. IN WP NO.14215/2006 DATED 19.12.2008 IS TOTALLY MISPLACED AND THE RATIO LAID DOWN BY THAT JUDGMENT CANNOT BE FOLLOWED SO AS TO H OLD THAT BIAL IS A STATUTORY BODY. FURTHER IT IS SUBMITTED THAT THE Q UESTION CONSIDERED BY THE HONBLE HIGH COURT WAS, WHETHER BIAL IS PERFORMING THE FUNCTION OF A STATE AND NOT WHETHER BIAL IS A STATUTORY BODY. SINCE A PART OF SHAREHOLDING WAS WITH GOVT. OF INDIA/STATE GOVT., I T WAS HELD BY THE HONBLE COURT THAT BIAL IS PERFORMING THE FUNCTION OF A ST ATE AND SHOULD BE FAIR ITA NO.616/BANG/2019 PAGE 4 OF 8 AND TRANSPARENT IN TENDERING PROCESS IN PUBLIC INTE REST. THE ISSUE BEFORE THE HONBLE COURT WAS WITH REGARD TO NON-TRANSPAREN T TENDERING PROCESS AND NOT DEDUCTION U/S. 80IA OF THE INCOME-TAX ACT, 1961 [THE ACT] OR ANY OTHER PROVISIONS OF THE ACT. BEING SO, WHETHER BIA L IS A STATUTORY BODY IS NOT WITH REFERENCE TO THE INCOME-TAX ACT. HENCE T HE ABOVE JUDGMENT RELIED ON BY THE TRIBUNAL IN ITS EARLIER ORDERS CAN NOT BE APPLIED. FURTHER, IT WAS SUBMITTED THAT THE ASSESSEE IS A SUB-CONTRACTOR AND A SUB-CONTRACTOR CANNOT BE GRANTED DEDUCTION U/S. 80IA OF THE ACT. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN EARLIER YEARS IN ASSESSEES OWN CASE AS CITED ABOVE . BEING SO, TAKING A CONSISTENT VIEW, WE ARE OF THE OPINION THAT THE FAC TS AND CIRCUMSTANCES OF THE CASE BEING THE SAME FOR THIS ASSESSMENT YEAR AL SO, ASSESSEE HAS TO BE GRANTED DEDUCTION U/S. 80IA OF THE ACT. 7. REGARDING THE ARGUMENTS OF THE LD. DR THAT THE J UDGMENT OF THE HONBLE HIGH COURT OF KARNATAKA RELIED ON BY THE TR IBUNAL IN EARLIER YEAR CANNOT BE APPLIED TO THE FACTS OF PRESENT CASE, WE ARE OF THE OPINION THAT THIS ISSUE WAS CONSIDERED BY THE TRIBUNAL WHILE ADJ UDICATING THE ISSUE IN MP NO.19/BANG/2014 DATED 18.09.2014 AND MP NO.19/BA NG/2014 AND ITA NO.1160/BANG/2012 BY ORDER DATED 05.10.2015 HELD AS UNDER:- MP NO.19/BANG/2014 DATED 18.09.2014 11. IT IS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ISSUE INVOLVED IN THE APPEAL WAS THE CLAIM OF D EDUCTION U/S 80IA(4)(I) OF THE ACT IN RESPECT OF THE NEW INFRAST RUCTURE FACILITY ESTABLISHED BY IT AT THE BANGALORE INTERNATIONAL AI RPORT. HE SUBMITTED THAT IN THE ORDER OF THE TRIBUNAL, THE TR IBUNAL HAS HELD THAT BANGALORE INTERNATIONAL AUTHORITY LTD. (BIAL) IS NOT A STATUTORY BODY FOR THE PURPOSE OF SEC.80IA(4)( )(B) OF THE ACT AND ACCORDINGLY DISALLOWED THE CLAIM OF DEDUCTION U/S 8 0IA. HE ITA NO.616/BANG/2019 PAGE 5 OF 8 SUBMITTED THAT THE ISSUE AS TO WHETHER BIAL IS A ST ATUTORY BODY OR NOT HAD COME UP FOR CONSIDERATION BEFORE THE JURISD ICTIONAL HIGH COURT IN THE CASE OF M/S.FLEMINGO DUTYFREE SHOPS PV T. LTD., IN WP NO.14215/2006 AND BY ORDER DATED 19-12-2008, THE HON'BLE HIGH COURT HAS HELD IT TO BE A STATUTORY AUTHORITY UNDER ARTICLE 12 OF THE CONSTITUTION OF INDIA. THUS, ACCORDING TO TH E LEARNED COUNSEL FOR THE ASSESSEE, BIAL IS A STATUTORY BODY AND HENCE THE DECISION OF THE TRIBUNAL ON THIS ISSUE IS ERRONEOUS AND NEEDS RE- CONSIDERATION IN THE LIGHT OF THE JURISDICTIONAL HI GH COURT. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS ALSO HEARD AND HAVING GONE THROUGH THE MATERIAL ON RECORD, WE FIND THAT THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF M/S. FLEMINGO DUTYFREE SHOPS PVT. LTD., (CITED SUPRA) HAS HELD BI AL TO BE A STATUTORY BODY. SINCE THE HON'BLE HIGH COURT'S DECI SION IS PRIOR TO THE ORDER OF THE TRIBUNAL BUT HAS BEEN BROUGHT TO T HE NOTICE OF THIS TRIBUNAL ONLY SUBSEQUENT TO THE PASSING OF THE ORDE R BY THE TRIBUNAL, THE DECISION OF THE TRIBUNAL NEEDS RE-CON SIDERATION ON THIS ISSUE. THEREFORE, THE APPEAL OF THE ASSESSEE IS RECALLED ONLY TO RE-CONSIDER THE ISSUE AS TO WHETHER BIAL IS A ST ATUTORY BODY U/S 80IA(4)(I) OF THE ACT. MP NO.19/BANG/2014 AND ITA NO.1160/BANG/2012 BY ORD ER DATED 05.10.2015 2. THE APPEAL WAS EARLIER HEARD AND DISPOSED OF BY ORDER DATED 30.01.2014. HOWEVER, VIDE ORDER IN MP NO.19/B ANG/2014 DATED 18.09.2014 THE TRIBUNALS ORDER WAS RECALLED ONLY TO RE- CONSIDER THE ISSUE AS TO WHETHER THE BANGALORE INTE RNATIONAL AIRPORT LTD. [BIAL] IS A STATUTORY BODY U/S 80IA(4) (I) OF THE ACT IN VIEW OF THE JUDGMENT OF THE HONBLE KARNATAKA HI GH COURT IN THE CASE OF M/S. FLEMINGO DUTYFREE SHOPS P. LTD., I N W.P.NO.14215 OF 2006 DATED 19.12.2008. IT WAS SUBSE QUENTLY BROUGHT TO THE NOTICE OF THIS TRIBUNAL THAT THE REV ENUE HAS ALSO FILED M.P.NO.20/BANG/2014 STATING THAT THIS TRIBUNA L HAD HELD THAT THE ACTIVITY CARRIED ON BY THE ASSESSEE IS INF RASTRUCTURE DEVELOPMENT UNDER SECTION 80IA(4), BUT AS FAR AS IT S AGREEMENT WITH BIAL IS CONCERNED, IT WAS HELD THAT THE STATUS OF THE BIAL IS NOT THAT OF STATUTORY AUTHORITY AND THEREFORE, DISA LLOWED THE DEDUCTION UNDER SECTION 80IA OF THE ACT. ACCORDING TO THE DEPARTMENT, THIS FINDING OF THE TRIBUNAL IS AMBIGUO US AND HENCE IS A MISTAKE APPARENT FROM RECORD WHICH NEEDS RECTI FICATION. ITA NO.616/BANG/2019 PAGE 6 OF 8 THUS, THE REVENUE HAS SOUGHT RECALL OF THE ORDER AN D RECTIFICATION OF THE ALLEGED MISTAKE APPARENT FROM RECORD. THE MP OF THE REVENUE WAS POSTED ALONG WITH THE APPEAL FOR HEARIN G. 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AFTER GOING THROUGH THE DETAILS FURN ISHED BY THE ASSESSEE, THIS TRIBUNAL HELD THAT THE ACTIVITY CARR IED ON BY THE ASSESSEE IS INFRASTRUCTURE DEVELOPMENT, BUT SINCE T HE MAJOR SHAREHOLDERS IN BIAL ARE NOT GOVERNMENT AUTHORITIES , IT IS NOT A STATUTORY AUTHORITY AND THEREFORE THE DEDUCTION U/S 80IA(4) IS NOT ALLOWABLE. HE SUBMITTED THAT THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF M/S. FLEMINGO DUTY FREE SH OPS PVT. LTD. IN WP NO.14215 OF 2006 DATED 19.12.2008, HAD A N OCCASION TO GO INTO THE SHAREHOLDINGS OF VARIOUS PARTIES IN BIAL AND AFTER DETAILED EXAMINATION OF FACTS HAS HELD THE BIAL TO BE A STATUTORY BODY AMENABLE TO WRIT JURISDICTION. IT IS ON THIS G ROUND, THAT THE ORDER OF THE TRIBUNAL WAS RECALLED AND REHEARD AT L ENGTH. 4. ON GOING THROUGH THE ORDER OF THE HON'BLE HIGH C OURT IN THE WRIT PETITION, WE FIND THAT THE HON'BLE HIGH CO URT WAS DEALING WITH A WRIT PETITION FILED BY M/S. FLEMINGO DUTY FREE SHOPS PVT. LTD. AGAINST THE UNION OF INDIA, THE AIR PORT AUTHORITY OF INDIA AND THE BANGALORE INTERNATIONAL AIRPORT LT D., ALONG WITH 2 OTHER PRIVATE PARTIES AS RESPONDENTS. THE SAID CA SE CAME BE FILED BY THE PETITIONER THEREIN ON THE GROUND THAT IT WAS NOT ISSUED THE TENDER DOCUMENT TO BID FOR A SHOP IN THE BIAL PREMI SES THOUGH BIAL IS A STATUTORY AUTHORITY AND WAS SUPPOSED TO C ALL FOR OPEN TENDERS. THE WRIT PETITION WAS FILED CHALLENGING TH E ABOVE INACTION. THE CIVIL AVIATION DEPARTMENT OF THE GOVE RNMENT OF INDIA WAS THE FIRST RESPONDENT WHILE AIRPORT AUTHOR ITY OF INDIA AND BIAL WERE 2ND AND 3RD RESPONDENTS RESPECTIVELY. THE PARTIES TO WHOM TENDER DOCUMENTS WERE ISSUED WERE THE OTHER RESPONDENTS TO THE WRIT PETITION. . . 7. AS THE VERY SAME GROUNDS ON WHICH THIS TRIBUNA L HAS HELD THAT BIAL IS NOT A STATUTORY BODY, HAVE BEEN CONSID ERED BY THE HONBLE HIGH COURT AND HAVE BEEN ACCEPTED THAT IT I S A STATUTORY BODY. THEREFORE, RESPECTFULLY FOLLOWING THE HONBL E ITA NO.616/BANG/2019 PAGE 7 OF 8 JURISDICTIONAL HIGH COURT ORDER, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). 8. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . 8. FURTHER, THE TRIBUNAL ORDER VIDE DATED 18.1.202 1 IN ITA NO.938/BANG/2019 FOR AY 2015-16 HELD AS UNDER:- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. WE FIND THAT THE TRIBUNAL IN A Y 2009-10 VIDE ITS ORDER DATED 30.1.2014 IN ITA NO.1160/BANG/ 2012 WHILE HOLDING THAT THE AGREEMENT ENTERED INTO BY THE ASSE SSEE WITH BIAL WAS FOR DEVELOPMENT, OPERATION AND MAINTENANCE OF INFRASTRUCTURE FACILITY U/S. 80IA(4) OF THE ACT AND HOLDING IN FAVOUR OF THE ASSESSEE, ON THE OTHER HAND HELD AGAI NST THE ASSESSEE THAT ASSESSEE DID NOT SATISFY THE CONDITION OF ENTE RING INTO AN AGREEMENT WITH CENTRAL OR STATE GOVERNMENTS OR LOCA L AUTHORITIES OR STATUTORY BODY. HOWEVER, VIDE ORDER DATED 5.10. 2015 IN MP NO.19/BANG/2014 OBSERVED THAT THE HONBLE HIGH COUR T OF KARNATAKA IN WP NO.14215/2006 DATED 19.12.2008 IN T HE CASE OF M/S. FLEMINGO DUTYFREE SHOPS (P) LTD. HELD THAT BIA L IS A STATUTORY BODY AND THEREFORE THE ORDER OF THE TRIBU NAL DATED 30.1.2014 WAS RECALLED TO CONSIDER THIS ASPECT OF T HE MATTER AND THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. S IMILARLY FOR AY 2010-11 IN ITA NO.22/BANG/2014 IN ASSESSEES OWN CA SE, BOTH THE ISSUES WERE DECIDED IN FAVOUR OF THE ASSESSEE B Y THE TRIBUNAL BY ORDER DATED 24.6.2016 AND THE REVENUES APPEAL W AS DISMISSED. FOR THE YEAR UNDER CONSIDERATION THE FA CTS AND CIRCUMSTANCES BEING IDENTICAL TO THAT OF THE EARLIE R YEARS, WE FIND NO REASON TO TAKE A CONTRARY VIEW. ACCORDINGLY TH E APPEAL OF THE REVENUE IS DISMISSED. 9. IN VIEW OF THE ABOVE, AT THIS STAGE, IT IS NOT POSSIBLE FOR US TO REVIEW THE EARLIER ORDER OF THE TRIBUNAL WHICH IS NOT DIST URBED BY ANY HIGHER FORUM SO AS TO TAKE A DIFFERENT VIEW ON THE ISSUE DISPUTE D BEFORE US. TAKING A CONSISTENT VIEW, WE ARE INCLINED TO REJECT THE ARGU MENTS OF THE LD. DR AND ALLOW THE GROUNDS TAKEN BY THE ASSESSEE IN THIS APP EAL. ITA NO.616/BANG/2019 PAGE 8 OF 8 10. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF JANUARY, 2021. SD/- SD/- ( BEENA PILLAI ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 27 TH JANUARY, 2021. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.