TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 859
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....an airports. As per the details available on the record, SATS Ltd., Singapore and Air India Ltd. (AIL) entered into a joint venture agreement dated 16.04.2010 for setting up the joint venture company and providing ground & cargo handling services (business division) at Indian Airports. Accordingly, SATS and AIL incorporated the assessee company on 20.04.2010 for the purpose of undertaking of the ground handling & cargo handling services at various Airports in India in accordance with the Cabinet approval. In accordance with the Joint Venture Agreement, the 'ground handling services' and 'cargo handling services' business carried out by AI-SATS (unincorporated JV) inclusive of all assets and liability was transferred to the newly established company on a slum exchange basis to the company. The business has been transferred from 1st August, 2010 (the transfer date) vide 'business transfer confirmation agreement' (BTA Agreement) between AIL, SATS and the company executed on 30.03.2011. The activities carried out by AIL or SATS through the AI-SATS (unincorporated JV) in relation to the ground handling services at Bangalore and Hyderabad airport and Cargo handlin....
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....s of development, operation etc, to BIAL by way of the Concession agreement and has also given the authority to BIAL to further grant such rights to any other person. It submitted that it would be difficult for GOI to enter into contract with each and every developer developing the relevant Airport facility. Accordingly, GOI has allowed BIAL to grant service provider rights to any person for carrying out the development and other activities entrusted on BIAL. Thus, the agreement with the assessee to grant the rights to perform the service of cargo and ground handling facility should be considered as an agreement with GOI via BIAL. 4.2 Further, pursuant to the concessional agreement, the assessee has been vested with all rights and obligations with respect to the cargo and ground handling operations from BIAL and is independently responsible for all activities carried on by them. Consequently, the assessee company who is assigned the right to develop, operate and maintain the air-cargo facility will be eligible to deduction under section 80-IA of the Act. 5. However, learned AO was not satisfied and concluded that the company had come into existence in violation of clause (i) to s....
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....while making provision of Rs. 3.82 crores in the year under consideration. 6.1 The assessee company relied on the accounting standard and accounting policy of the assessee company and submitted that amounts were not quantifiable, and determined on best estimate basis and provision were reversed when the actual bills were raised. However, learned AO did not accept the plea and disallowed Rs. 3.82 crores u/s 40(a)(ia) read with section 200 of the Act. 7. In appeal, before learned CIT(A) the assessee succeeded on both the counts, against which the Revenue is in appeal raising following grounds: "1. The Ld. CIT(A)has erred in law and on facts in directing the AO to allow deduction u/s 80IA of income Tax without appreciating the following factual position. (i) The assessee company is a joint venture which was formed by Air India Ltd. and SATS Ltd., Singapore and thus it is nothing but a reconstitution/reconstitution of the same joint venture for carrying out the same business activity. (ii) As per 80IA(4) clause (i) of the Act, the enterprise should be owned by a company registered in India where as the assessee company is formed by M/s Air India Ltd. an India Company and M/s SA....
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....s examined every aspect meticulously to conclude that the assessee was incorporated in the manner that it is only an reorganized business set up. It was submitted that assessee company has not entered into direct agreement with the Government of India. He also pointed out that erstwhile joint venture was not claiming the exemption. It was submitted that learned CIT(A) has relied the Hon'ble Karnataka High Court judgment without taking into consideration the facts were distinguishabl. 12. Now appreciating the aforesaid, the first and foremost thing to be decided is whether the cargo handling facility which includes storage, loading and unloading is an infrastructure facility for the purpose of Section 80-IA of the Act. This aspect is actually no more res-integra, before Tribunal and in fact in an order of Coordinate Bench, in which one of us (JM) was on the bench, vide ITA No. ITA No. 8301/Del/2019; Acit, Circle- 5(2), New Delhi vs Celebi Delhi Cargo Terminal decided on 24 August, 2023, the issue has been considered and decided against the Revenue holding that air cargo handling facility fall into the scope of infrastructure facility. In that case too Ld. AO was not satisfied with ....
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....4), it is held that the appellant has entered into an agreement with a statutory body being DIAL for operation and maintenance of an Infrastructure facility i.e. cargo facility at Delhi Airport. Therefore the appellant has satisfied the condition laid down In section 80IA(4)(i)(b). 6.3 Besides, the appellant has taken permissions from the office of the Commissioner of Customs (Import & General) and the Ministry of Civil Aviation to enable it to carry on the business of operation and maintenance of the cargo facility at IGIA, New Delhi. As held by the Madras High Court in the case of CIT v A.L. Logistics (P) Ltd. 55 taxmann.com 283 such approvals obtained From the government authorities would be regarded as an agreement with the government for the purposes of section 801A(4)(i)(b). Considering the aforesaid legal position, I am of the view that the second condition of section 80IA(4) is satisfied in the appellant's case and accordingly, the said contention of the appellant is upheld. 12.1 We are of the considered view that learned AO has fallen in error in considering Airport as a facility standing in isolation and giving a very restrictive interpretation to the scope of 'develop....
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....009 the Cabinet in its meeting had approved the setting off of joint venture of Air India with SATS for ground and cargo handling activities at Indian Airports. The letter describes as to how the workforce, assets and equipments shall be evaluated in the joint venture company. It specifically make a direction of getting the company incorporated under the Companies Act, 1956. It was also provided that assets and equipments would be transferred to the joint venture company after approval of this ministry. We are of firm view that such approval of Cabinet by all means amounts to approval of incorporation of assessee under SPRHA and Ld. CIT(A) has duly taken cognizance of this letter to set aside the findings of the Ld. Assessing officer that there was absence of an agreement with the Central Government. There is no fault in the conclusion of ld. CIT(A) as the SPRHA entered into by BIAL with Air India and SATS, dated 16.05.2006, the copy of which is available in the paper book from page no. 114 to 191, specifically opens with the recitals that in pursuant to the concession agreement, the Government of India has granted BIAL the inclusive rights to carry out the development, design, fin....
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....re holders, as in the case of that assessee also the company equity was subscribed by three companies and the Tribunal had considered the fact that being a registered company independently holding the assets was entitled to benefit u/s 80IA. 12.4 This also takes care of the allegation of the ld. AO that earlier joint venture was not taking the benefit of Section 80IA as that was for the reason that the earlier joint venture was not company incorporated Indian and was merely an Association of person which was not entitled for reduction u/s 80IA. Thus, we are determine the ground no. 1 along with sub-grounds against the appellant Revenue. 13. Ground No. 2: At outset we agree with the submission of Ld. Sr. Counsel that as ground no. 1 on deduction under section 80IA is decided in the assessee's favour and it is held that the assessee is entitled to a deduction under section 80IA of the Act, then, any increase in the assessee's income as a consequence of the disallowance would be offset, since the increased income would also be eligible for deduction under section 80IA. In this regard, the reliance is rightly place by him on CBDT circular no. 37/2016 wherein the CBDT has acce....