Joint Commissioner of Income Tax (OSD), Circle - 4(1)(2), Bangalore V. M/s. Menzies Aviation Bobba (Bangalore) Private Limited, Bangalore

ITA 938/BANG/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7894 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-01-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 02-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V. SRINIVASAN
• Section: 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER IT A NO. 938/BANG/2019 ASSESSMENT YEAR: 2015 - 16 THE JOINT COMMISSIONER OF INCOME TAX (OSD), CIRCLE 4(1)(2), BENGALURU. VS. M/S MENZIES AVIATION BOBBA (BANGALORE) PVT. LTD., PLOT NO.C-04, CARGO TERMINAL 1, KEMPEGOWDA INTERNATIONAL AIRPORT, BANGALORE 560 300. PAN: AAECM 6 862D APPELLANT RESPONDENT APPELLANT BY : S HRI SUNIL KUMAR SINGH, CIT(DR)(ITAT), BENGALURU. RESPONDENT BY : SHRI V. SRINIVASAN, ADVOCATE DATE OF HEARING : 12. 0 1 .202 1 DATE OF PRONOUNCEMENT : 1 8 .0 1 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE CIT(APPEALS)-4, BENGALURU DATED 12.02.2019 FOR THE ASSESSMENT YEAR 2015-16. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVI DING CARGO HANDLING AT BANGALORE INTERNATIONAL AIRPORT LTD. (B IAL). DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE A SSESSEE HAS CLAIMED DEDUCTION OF RS.46,10,87,539 U/S. 80IA OF THE INCOM E-TAX ACT, 1961 [THE ACT] AND THE ASSESSEE WAS CALLED FOR TO EXPLAIN ITS ELIGIBILITY FOR DEDUCTION. IN RESPONSE, THE ASSESSEE SUBMITTED THAT IT HAS ENT ERED INTO AN AGREEMENT ITA NO.938/BANG/2019 PAGE 2 OF 5 WITH BIAL FOR DEVELOPING, OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY AS PER SECTION 80A(4)(I)(B) OF THE ACT. I T WAS CONTENDED THAT BIAL IS A STATUTORY BODY AND HENCE DEDUCTION WAS ALLOWABLE. THE AO, HOWEVER, REJECTED THE CONTENTIONS OF THE ASSESSEE. THE ASSES SEE PREFERRED APPEAL BEFORE THE CIT(APPEALS). 3. THE CIT(APPEALS) OBSERVED THAT SIMILAR ISSUE HAD COME UP FOR CONSIDERATION FOR AY 2012-13 BEFORE HIS PREDECESSOR WHEREIN IT WAS OBSERVED THAT THE DECISION OF THE TRIBUNAL FOR AY 2 009-10 IN ASSESSEES OWN CASE WAS IN FAVOUR OF ASSESSEE HOLDING THAT ASS ESSEE HAD SATISFIED BOTH THE CONDITIONS OF ENGAGEMENT IN THE ACTIVITY O F MANUFACTURE- DEVELOPMENT AS WELL AS ENTERING OF CONTRACTUAL AGRE EMENT WITH THE REQUISITE STATUTORY AUTHORITY AS PRESCRIBED IN SECTION 80IA(4 )(I) OF THE ACT. IT WAS ALSO NOTED THAT THE FACTS AND CIRCUMSTANCES WERE SIMILAR IN AY 2011-12. FOLLOWING HIS PREDECESSORS ORDER, THE CIT(APPEALS) HELD THAT ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S 80IA OF THE ACT AND DELETED THE DISALLOWANCE MADE BY THE AO. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE T RIBUNAL ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE LD.CIT(A) IS OPPOSED TO THE LA W AND FACTS OF THE CASE. 2. THE CIT(A) OUGHT TO HAVE ADJUDICATED ON THE MERI TS OF THE CASE INSTEAD OF FOLLOWING HIS PREDECESSOR'S ORDER F OR AY 2012-13, WHO IN TURN RELIED ON THE ORDER OF HIS PRE DECESSOR FOR AY 2010-11 AND ORDER OF THE ITAT FOR AY 2009-10 . 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN ALLOWING THE APPEAL AND THEREBY GRANTING DEDUCTI ON U/S 80IA(4)(I) IN RESPECT OF PROFITS EARNED FROM CARGO HANDLING FACILITIES MAINTAINED AND OPERATED BY THE ASSESSEE AT BENGALURU INTERNATIONAL AIRPORT, IGNORING THE FACT THAT THE PRINCIPLE CONDITION FOR ALLOWING THIS DEDUCTION IS THAT THE ITA NO.938/BANG/2019 PAGE 3 OF 5 AGREEMENT FOR DEVELOPMENT OF ANY INFRASTRUCTURE FAC ILITY MUST BE ENTERED INTO WITH THE CENTRAL GOVT. OR SATE GOVT . OR ANY LOCAL AUTHORITY / STATUTORY BODY, WHILE ASSESSEE HA S ENTERED INTO A SERVICE PROVIDER RIGHT HOLDER AGREEMENT WITH BENGALURU INTERNATIONAL AIRPORT LTD., A PRIVATE LIM ITED COMPANY, FOR RUNNING THIS FACILITY. 4. THE CIT (A) OUGHT TO HAVE APPRECIATED THAT EVERY FACILITY OF THIS NATURE IN THE VICINITY OF THE AIRPORT CANNOT F IT INTO THE DEFINITION OF 'AIRPORT'. THE DEFINITION OF 'AIRPORT ' AS PROVIDED IN OTHER ALLIED ACTS DOES NOT BRING INTO I TS AMBIT THE CARGO HANDLING FACILITY ALTHOUGH SITUATED WITHIN TH E AIRPORT AREA. 5. THE CIT (A) OUGHT TO HAVE APPRECIATED THAT THE A SSESSEE IS ONLY A CONTRACTOR TO WHOM CERTAIN RIGHTS WERE GRANT ED BY BIAL TO OPERATE THE CARGO FACILITY AND SUCH CONTRAC TOR CANNOT BE CALLED AS A DEVELOPER OF INFRASTRUCTURE FACILITY . FURTHER, THE CIT (A) OUGHT TO HAVE APPRECIATED THAT THE INTENTIO N OF THE LEGISLATURE IS TO PROVIDE THIS DEDUCTION ONLY TO TH E PERSONS DIRECTLY DEVELOPING, MAINTAINING AND OPERATING THE FACILITY BUT NOT TO CONTRACTORS. 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT (A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED. 5. THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE O RDER OF CIT(APPEALS) AND SUBMITTED THAT THE TRIBUNAL IN ASS ESSEES OWN CASE FOR AY 2009-10 & 2010-11 DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF THE AO. ITA NO.938/BANG/2019 PAGE 4 OF 5 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. WE FIND THAT THE TRIBUNAL IN AY 2009-10 VIDE ITS ORDER DATED 30.1.2014 IN ITA NO.1160/BANG/2012 WHILE HOLDING TH AT THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH BIAL WAS FOR DEVE LOPMENT, OPERATION AND MAINTENANCE OF INFRASTRUCTURE FACILITY U/S. 80I A(4) OF THE ACT AND HOLDING IN FAVOUR OF THE ASSESSEE, ON THE OTHER HAND HELD A GAINST THE ASSESSEE THAT ASSESSEE DID NOT SATISFY THE CONDITION OF ENTERING INTO AN AGREEMENT WITH CENTRAL OR STATE GOVERNMENTS OR LOCAL AUTHORITIES O R STATUTORY BODY. HOWEVER, VIDE ORDER DATED 5.10.2015 IN MP NO.19/BAN G/2014 OBSERVED THAT THE HONBLE HIGH COURT OF KARNATAKA IN WP NO.14215/2006 DATED 19.12.2008 IN THE CASE OF M/S. FLEMINGO DUTYFREE SHOPS (P) LTD. HELD THAT BIAL IS A STATUTORY BODY AND THEREFORE THE ORDER OF THE TRIBUNAL DATED 30.1.2014 WAS RECALLED TO CONSIDER THIS ASPECT OF T HE MATTER AND THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. SIMILARLY F OR AY 2010-11 IN ITA NO.22/BANG/2014 IN ASSESSEES OWN CASE, BOTH THE IS SUES WERE DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL BY ORDER DAT ED 24.6.2016 AND THE REVENUES APPEAL WAS DISMISSED. FOR THE YEAR UNDER CONSIDERATION THE FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THAT OF THE EARLIER YEARS, WE FIND NO REASON TO TAKE A CONTRARY VIEW. ACCORDINGLY TH E APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF JANUARY, 2021. SD/- SD/- ( GEORGE GEORGE K. ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 18 TH JANUARY, 2021. / DESAI S MURTHY / ITA NO.938/BANG/2019 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.