Airport cargo terminal qualifies as infrastructure facility; direct government agreement not required under authorised concession arrangement.

For section 80IA(4) purposes, an airport cargo terminal operated and maintained by an assessee was treated as an eligible infrastructure facility because it formed an integral part of the airport and fell within the statutory description of infrastructure facility. The benefit was also available where the assessee derived operating rights through an approved concession structure, as a separate and independent agreement with the Central Government, State Government, local authority or statutory body was not necessary if the statutory conditions were otherwise satisfied. The article concludes that such an enterprise can qualify for deduction where it operates under an authorised concession arrangement.

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Issues: (i) whether the cargo terminal operated and maintained by the assessee was an infrastructure facility eligible for deduction under section 80IA(4) of the Income-tax Act, 1961; (ii) whether the assessee was required to enter into a separate and independent agreement with the Central Government, State Government, local authority or statutory body for claiming the deduction.

Issue (i): whether the cargo terminal operated and maintained by the assessee was an infrastructure facility eligible for deduction under section 80IA(4) of the Income-tax Act, 1961.

Analysis: Section 80IA(4) extends the benefit not only to enterprises developing infrastructure facilities, but also to enterprises operating and maintaining or developing, operating and maintaining such facilities. The statutory explanation includes an airport within the meaning of infrastructure facility, and the cargo terminal was treated as an integral part of the airport. The cargo operation carried on by the assessee was held to be similar to other eligible airport-linked cargo and container facilities that have been regarded as infrastructure facilities.

Conclusion: The cargo terminal operated and maintained by the assessee was held to be an infrastructure facility, and the issue was decided in favour of the assessee.

Issue (ii): whether the assessee was required to enter into a separate and independent agreement with the Central Government, State Government, local authority or statutory body for claiming the deduction.

Analysis: The proviso to section 80IA(4)(i) was applied to hold that where the original concession arrangement authorised the developer to grant further operating rights, the transferee or service-provider enterprise need not have a direct agreement with the specified authority. The assessee had obtained its operating rights through the concession structure approved by the Government and through the agreement with the concessionaire, which was sufficient for the statutory requirement.

Conclusion: A separate and independent agreement with the Government or other specified authority was not required, and the issue was decided in favour of the assessee.

Final Conclusion: The assessee satisfied the statutory conditions for deduction under section 80IA(4), and its claims for the relevant assessment years were accepted.

Ratio Decidendi: For purposes of section 80IA(4), an airport cargo terminal forming part of the airport is an eligible infrastructure facility, and a transferee or operating enterprise acting under an authorised concession arrangement need not execute a direct agreement with the specified authority if the statutory conditions are otherwise met.

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