Airport cargo operations and statutory-body agreements can satisfy the infrastructure deduction conditions under section 80IA(4).

For section 80IA(4) of the Income-tax Act, the Karnataka HC view discussed in the note is that an agreement with Bengaluru International Airport Limited met the statutory-body requirement because the earlier binding position treated it as a statutory body. The note also states that airport cargo handling activities formed part of airport infrastructure where the agreement covered design, construction, financing, testing, commissioning, management and operation on a build-operate-transfer basis, and concurrent findings that the assessee was engaged in development, operation and maintenance were not shown to be perverse. On that reasoning, the deduction claim was upheld and the substantial questions of law were answered against the revenue.

---

---

Issues: (i) Whether the agreement with Bengaluru International Airport Limited satisfied the requirement of an agreement with a statutory body under section 80IA(4) of the Income-tax Act, 1961; (ii) Whether cargo handling services at the airport constituted development, operation or maintenance of an infrastructure facility for the purposes of section 80IA(4) of the Income-tax Act, 1961.

Issue (i): Whether the agreement with Bengaluru International Airport Limited satisfied the requirement of an agreement with a statutory body under section 80IA(4) of the Income-tax Act, 1961.

Analysis: The statutory conditions under section 80IA(4)(i)(b) require an agreement with the Central Government, State Government, local authority or any other statutory body. The earlier binding view that Bengaluru International Airport Limited is a statutory body was followed, and the Tribunal's reliance on that position was treated as correct. The Court also noted that the earlier challenge had not displaced that view.

Conclusion: The requirement of an agreement with a statutory body was held to be satisfied, in favour of the assessee.

Issue (ii): Whether cargo handling services at the airport constituted development, operation or maintenance of an infrastructure facility for the purposes of section 80IA(4) of the Income-tax Act, 1961.

Analysis: Airport cargo operations were held to form part of the airport infrastructure. The agreement conferred rights for design, construction, financing, testing, commissioning, management and operation on a built, operate and transfer basis, and the authorities below concurrently found that the assessee was not merely a contractor but was engaged in development, operation and maintenance of the facility. Those findings were held to be factual and not shown to be perverse. As a result, the activity fell within the expression "infrastructure facility".

Conclusion: Cargo handling services were held to qualify as development, operation and maintenance of an infrastructure facility, in favour of the assessee.

Final Conclusion: The substantial questions of law were answered against the revenue, and the deduction claim under section 80IA(4) was upheld.

Ratio Decidendi: For section 80IA(4), where the agreement is with a statutory body and the assessee undertakes airport cargo operations under a development-cum-operation arrangement, concurrent factual findings that the activity is part of airport infrastructure will not be disturbed absent perversity.

---