TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 250
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....s pleads that that CIT(A)'s impugned lower appellate findings have erred in law and on facts in holding the assessee as entitled for section 80IA deduction involving varying sums, assessment year wise, respectively. We further find that this is the "second" round of proceedings before the tribunal as earlier learned co-ordinate bench's order in ITA No. 5026/Del/2016 for assessment year 2011-12 had upheld the CIT(A)'s impugned findings as under: "2. Facts, in brief, are that assessee company was incorporated on 20.04.2010 and is engaged primarily in the business of providing ground handling and cargo handling services at Indian 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 e Joint Venture Agreem....
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....t approval was communicated vide its press release dated 23rd February 2009 and upon receipt of approval from Foreign Investments Promotion Board on 31st March 2010, the business of providing cargo and ground handling services was succeeded by the assessee. The said business was effectively transferred from 1 August 2010 to the assessee. Consequently, all the rights granted by BAIL to JV Company were transferred to the assessee with effect from 1st August 2010. Since 1 August 2010, the assessee carries on business of operating and maintaining of air- cargo facility at Bengaluru air port in India in accordance with the rights provided by BIAL. Thus it was claimed that GOI has granted rights 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 t....
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....her, the learned AO examined the question of reconciliation of TDS for each head of expenses and with regard to concession fees, found that a sum of Rs. 11,65,38,217/- has been debited to P&L A/c for which assessee admitted that tax has been deducted at source on payment of Rs. 6,44,37,848/-. As with regard to remaining Rs. 5,21,00,369/-, assessee claimed that Rs. 1.39 crores arises in transaction with GMR, Hyderabad, for which TDS certificate Nil was filed. Assessee had claimed that remaining amount of Rs. 3.82 crores was of provisional nature FY 2010-11 which was reversed on September, 20, 2011 and actual bill expenses were booked and TDS is deducted thereon. Learned AO took it as an admission that no tax at source had been deducted 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 t....
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....en confirmed by Hon'ble Karnataka High Court on 25.01.2021 vide ITA no. 186 of 2016. 9.1 Learned DR, however, resisted the same, submitting that the nature of activity of maintaining the Airport is one where technical facilities connected with the flying of aircrafts is concerned and ground activities like Cargo handling do not fall in the category of maintenance of Airport. 10. Further Ld. Sr. Counsel submitted that there is no requirement that the share holders of an Indian Company, as mentioned in Section 80IA(4)(i)(a), should also be Indian companies. For this, reliance was placed on the judgment of Chennai Tribunal in the case of PSA Sical Terminals Ltd. ACIT, ITA no. 1604 to 1607/Mds/2012 order dated 06.12.2012. 11. On the other hand, learned DR took the Bench across the assessment order pointing out how learned AO has examined every aspect meticulously to conclude that the assessee was incorporated in the manner that it is only a 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. I....
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....ms statutory functions in the Airport," The said decision has been followed by the Bangalore Tribunal in the case of Menzies Aviation Bobba (Bangalore) Pvt. Ltd. (supra). 6.2 The facts of the appellant's case are similar to that of Menzies Aviation Bobba (Bangalore) Pvt. Ltd and Hyderabad Menzies Air Cargo P. Ltd which have entered into an agreement with BIAL and GHIAL respectively for Air Cargo facility at Bangalore and Hyderabad airport, Hence, respectfully following the decision of the Karnataka High Court in the case of Flemingo Dutyfree (supra) and the decision of the Bangalore Tribunal in the case of ACIT vs. M/s. Menzies Aviation Bobba (Bangalore) Pvt. Ltd. (supra) which has held the agreement between that assessee and BIAL granting the assessee the concession to operate and maintain the cargo facility to be a valid agreement for the purposes of section 80IA(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 ....
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....ined to hold that ground handling and cargo handling services provided by the assessee are covered within the meaning of Explanation referred to Section 80IA and assessee is entitled to claim the benefit of same. 12.2 Then the assessee has come into existence not by reconstitution or reconstruction of the joint venture of Air India Ltd. and SATS Ltd. Singapore on its own, rather it was at the initiation of the Government of India that the assessee came into existence and there is no rebuttal by way of any enquiry by Ld.AO, to the submissions of assessee that the Cabinet had given an approval of the establishment and functionality of assessee. The copy of letter dated 16th March, 2009 from the Ministry of Aviation, Government of India addressed to Chairman and Managing Director, Air India Ltd. is made available at page no. 112 and 113 of the paper book and same shows that on 23rd February, 2009 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 specifi....
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....ribunal in the case of M/s. Menzies Aviation (supra) as duly appreciated by ld. CIT(A). 12.3 Then it comes up that Ld. CIT(A) has duly appreciated the fact that Ld. AO had fallen in error in applying provision of Section 80IA(iii) with regard to allegation of the assessee company being a mere reconstitution and reconstruction of unincorporated JV by taking into consideration that the said provision is not applicable to the assessee company claiming benefit by way of infrastructural facility of the nature of Airport. Ld. CIT(A) has also duly appreciated the fact that assessee is company incorporated India and owns the infrastructural facility and Ld. AO has fallen in error in alleging violation of the condition of Section 80IA(iv)(i)(a). In this context, as relied by Ld. Sr. Counsel in the case of M/s. PSA Sical Terminals (supra), laying down that there is distinction between the company and the share 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 ....
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....e assessee by virtue of the SPRH agreement. 14.2 It is further submitted that in subsequent years, namely, assessment year 2012-13 and 2013-14, the said provision is disallowed only on the ground that it is a contingent liability. In other words, the issue about section 40(a)(ia) is not raised. The relevant extract of the assessment order for AY 2012-13 and AY 2013-14 were relied by Ld. Sr. Counsel. It was submitted that thereafter in subsequent assessment years, no disallowance of the provision is made. A copy of the assessment order for AY 2014-15 was relied in that context. 15. Learned DR, however, relied the findings of learned AO and relied the Banglore Bench order in case of IBM India (P) Ltd. V ITO(TDS) LTU, Bangalore (2015) 59 taxmann.com 107 and Delhi Bench order in ITA No 5347/Del/2012 Inter Globe Aviation Ltd V ACIt order dated 07/01/2019 to submit that the provision is made by present assessee under the specified head, provision is also made to on certain basis thereby ascertaining the amount. It is not the case of the assessee that it has made an ad hoc provision. The payee is identified. Therefore, according to Ld. DR, the tax is required to be deduc....
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....t's as many appeals ITA Nos. 535, 536 & 537/2024 dated 01.05.2025 before the hon'ble jurisdictional high court wherein their lordships have restored the issue back to the tribunal as under: "1. After some arguments, the learned counsel appearing for the parties are ad idem that the issue regarding the applicability of the proviso to sub-section 4 of Section 80IA of the Income Tax Act, 1961 was not advanced and examined before the learned ITAT and therefore, the learned ITAT had no occasion to examine the same. 2. The learned counsel submits that the matter be remanded to the learned ITAT to consider afresh. 3. The parties are also ad idem that no objection would be taken by the respondent on the ground that the apposite grounds of appeal, which could possibly lead to the questions of law as projected by the Revenue in this appeal, were not raised before the learned ITAT. 4. In view of the above, we set aside the impugned order and remand the matter to the learned ITAT to consider afresh. 5. The above captioned appeals are disposed of in the aforesaid terms. 6. It is clarified that this order has been passed with the consent of t....
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..... * Consequently, Air India SATS Airport Services Pvt. Ltd. was incorporated on 20 April 2010 via JV Agreement dated 16 April 2010. * The incorporated entity took over the J V business w.e.f. 1 August 2010. Claim and Disallowance by AO * The appellant invested 61.17 crore to develop cargo infrastructure at Bangalore Airport. * Claimed deduction of ^23,90,03,420/- u/s 80IA of the Income Tax Act for developing infrastructure. * Assessing Officer (AO) disallowed the deduction, stating that the appellant is not an infrastructure company under Section 80IA. * AO also disallowed 3.82 crore as a provision for concession fees, citing non-deduction of TDS u/s 40(a)(ia). Appeal Filed by Assessee before CIT(A) The assessee filed an appeal against both disallowances made by the AO: * Denial of deduction u/s 80IA. * Disallowance of concession fee provision due to non deduction of TDS. CIT(A) decision * Deduction u/s 80IA of Rs. 23,90,03,420/- deleted. (Ref- Page 13-21 of the CIT (A) order). * Disallowance of Rs. 3,82,00,000/- u/s 40(a)(ia) deleted. (Ref- Page 22-24 of th....
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.... Since one partner (SATS Ltd.) is a foreign company, the ownership condition is violated, and the assessee fails the first eligibility test. 3. Nature of Activities Not Eligible Section 80IA(4) covers businesses engaged in: * Developing, * Operating and maintaining, or * Developing, operating and maintaining infrastructure facilities (including airports as per clause (d)). Moreover, the assessee provides ground handling and cargo handling services at airports. * AO held that such utility services do not amount to development or operation of airport infrastructure. * The airports (Bangalore and Hyderabad) are developed/operated by BIAL and GMR Hyderabad Ltd., not by the assessee. * Assessee is a third-tier service provider, hence does not qualify as a developer/operator of infrastructure. 4. No Agreement with Central Government (Clause b of Section 80IA(4)(i)) * The assessee has no such agreement with the Central Government. * Agreements were entered with BIAL and GMR, not the Central Government. * The business was taken over from an unincorporated JV; no new agreemen....
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....n of airport infrastructure as envisaged under 80IA(4)." 7. Mr. Percy Pardiwalla on the other hand has invited our attention to the assessee's detailed paper book(s) thereby explaining the brief background of the first and foremost agreement dated 16.04.2010 forming a JV between SATS Ltd., Singapore and Air India Ltd. followed by the business transfer agreement dated 30.03.2011 which further culminated in the assessee entering in the field as the developer of the Bangalore International Airport Ltd. (supra). 8. Mr. Pardiwalla further seeks to clarify that all this voluminous evidence and facts emerging therefrom are admittedly not in dispute between the parties. His case therefore is that we are now to decide the solitary issue of applicability of section 80IA(4) proviso herein than the entitlement of the assessee's claim u/s 80IA which has already attained finality in the above former round. 9. It is in this factual backdrop of these rival pleadings that we first of all need to ascertain as to whether we need to examine assessee's section 80IA deduction in entirety or applicability of section 80IA(4) Proviso only. We find that their lordships remand directions restored th....