INCOME TAX ACT, 1961

Section 80-IA(4)

Deduction under section 80-IA(4) - Allowability - Agreement entered into by assessee with BIAL for development, operation and maintenance of infrastructure facility -

Assessee-company was engaged in business of providing cargo handling at Bangalore International Airport Ltd. (BIAL). It claimed deduction under section 80-IA. AO called the assessee to explain its eligibility for said deduction. In response, the assessee submitted that it entered into an agreement with BIAL for developing, operating and maintaining a new infrastructure facility as per section 80-IA(4)(i)(b). However, AO was of the view that the assessee did not satisfy the condition of entering into an agreement with Central or State Governments or local authorities or statutory body as required under section 80-IA(4) and accordingly, denied the claim of the assessee. Assessee contended that BIAL being a statutory body; the deduction under section 80-IA would be allowable. Held: The agreement entered into by the assessee with BIAL was for development, operation and maintenance of infrastructure facility under section 80-IA(4). Although, the AO alleged that the assessee did not satisfy the condition of entering into an agreement with Central or State Governments or local authorities or statutory body, however, the High Court in the case of Flemingo Dutyfree Shops Pvt. Ltd. v. Union of India (UOI) [Writ Petition No. 14215 of 2006, dt. 9-12-2008] held that the BIAL is a statutory body. Moreover, in assessee's own case for earlier assessment year, the identical issue was decided in favour of the assessee by the Tribunal. Accordingly, the assessee's claim for deduction under section 80-IA was allowed.

REFERRED : Flemingo Dutyfree Shops Pvt. Ltd. v. Union of India (UOI) [Writ Petition No. 14215 of 2006, dt. 9-12-2008].

FAVOUR : In assessee's favour

A.Y. : 2015-16

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