TaxTMI 
TaxTMI 
2026 (2) TMI 642
X X X X Extracts X X X X
X X X X Extracts X X X X
....0, relating to the Assessment Years 2016-17 and 2017-18 respectively. 3. As common arguments have been canvassed, and the facts and substantial questions of law raised are identical, except for the difference in the Assessment Year, both appeals are disposed of by this common order. 4. The brief facts of the case are that the assessee is engaged in the business of operation and maintenance of a fuel farm and in providing plane services. The assessee claimed deduction under Section 80-IA of the Income-tax Act, 1961 (for short, 'the Act'). The Assessing Officer disputed the eligibility of the assessee to claim deduction under Section 80-IA of the Act and accordingly called for a reply from the respondent-assessee. 4.1 The assessee submitted its reply contending that the fuel farm facility, being an essential and integral part of an airport, falls within the ambit of an "infrastructure facility" and, therefore, entitles the assessee to deduction under Section 80I-A of the Act. The Assessing Officer, however, held that the assessee had no agreement with the Central Government, the State Government, local authority or any other statutory body to develop, operate and maintain an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see had availed from ICICI Bank to mitigate the risk of foreign exchange fluctuation on foreign exchange loan from Punjab National Bank objective of entering into this arrangement was to convert USD floating interest rate liability into INR fixed interest rate liability and mitigate the foreign exchange fluctuation risk and same is not allowable as per section 36 of the Act"? 3. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside disallowance made under section 80I-A of the Act and interest expenditure on hedge swap facility which assessee had availed from ICICI Bank to mitigate the risk of foreign exchange fluctuation on foreign exchange loan from PNB ignoring findings of assessing authority and first appellate authority"? 4. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside disallowance made on account of interest expenditure on hedge swap facility which assessee had availed from ICICI Bank to mitigate the risk of foreign exchange fluctuation on foreign exchange loan from PNB as swapping of loan was not for business purpose"?" 6. Sri Sushal Tiwari, le....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fic agreement with the authorities, as referred to by the Assessing Officer, is not a mandatory or requisite condition for claiming deduction under Section 80-IA of the Act. 7.2 Learned Senior Counsel further submits that this Court, while considering the scope of Section 80-IA of the Act in relation to cargo facilities in Menzies Aviation Bobba (Bangalore) (P.) Ltd. (supra), has held that BIAL is a statutory body and that providing cargo handling services under a build, operate and transfer scheme pursuant to a Service Provider Right Holder Agreement would fall within the expression "infrastructure facility" under Section 80-IA(4) of the Act. It is contended that, in view of the said judgment, the fuel farm facility, being similarly situated, would also qualify as an infrastructure facility eligible for deduction under Section 80-IA of the Act. 7.3 Learned Senior Counsel further submits that, insofar as the claim for deduction under Section 36(1)(iii) of the Act in respect of interest paid on Hedge (Swap) transactions is concerned, the issue is squarely covered by the decision of the Hon'ble Supreme Court in Core Health Care Ltd. (supra). Lastly, learned counsel submits that....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 9. Sofar as the requirement of entering into a statutory body is concerned, the same is no longer res integra as a Bench of this Court in M/s. FLAMINGO DUTYFREE SHOPS PVT. LTD. has already held that BIAL is a statutory body. Thus, the assessee has complied with the aforesaid condition. It is pertinent to mention here that the Special Leave Petition against the aforesaid decision has been disposed of by order dated 16.09.2016. Thus, the view taken by this Court in M/s. FLAMINGO DUTYFREE SHOPS PVT. LTD. holds the field. In view of aforesaid enunciation of law, it is evident that the assessee has complied with the condition of entering into an agreement with the statutory body. 10. Now, we may deal with the issue whether the activity of the assessee in providing cargo handling services is covered under the expression 'infrastructure development'. The Commissioner of Income Tax (Appeals), vide order dated 11.06.2012, inter alia has held that from perusal of the layout map of the airport, it is evident that the cargo complex is connected to other infrastructure facilities by airside service road running parallel to the main runway. The aforesaid road serves the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y. It has been further held that the establishment of the cargo complex and the fuel farm is in accordance with the Concession Agreement entered into between BIAL and the Government of India. By referring to sub-section (2) of Section 2 of the Aircraft Act, 1934, it has been held that the cargo complex forms part of the aerodrome. 8.5 In the light of the above discussion, the contention of the Revenue that the respondent has no agreement with any statutory body, as one of the requisite conditions for claiming deduction under Section 80-IA of the Act, is unsustainable. BIAL has been held to be a statutory body, and the agreement entered into between the respondent-assessee and BIAL satisfies the requisite conditions contemplated under Section 80-IA of the Act. 9. The second contention of the Revenue that the fuel farm facility does not form part of the airport is also not acceptable. An airport is held to be an infrastructure facility in terms of Explanation 2 to Section 80-IA of the Act. The term "airport" is not defined under the Act. However, the expression "aerodrome" is defined under the Aircraft Act, 1934. The same reads as under: (2) "aerodrome" means any defin....