Ground and cargo handling services covered within infrastructure facility is entitled for deduction u/s. 80IA

ACIT Vs Air India SATS Airport Services Pvt. Ltd. (ITAT Delhi)

ITAT Delhi held that benefit of deduction u/s. 80-IA of the Income Tax Act entitled as ground handling and cargo handling services are included within the scope of infrastructure facility.

Facts- The 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. 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 at Indian Airports.

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 handling services and Bangalore Airports are stated to be carried out by the company since the transfer date. The assessee for rendering the ground & cargo handling services at Airport had claimed deduction u/s. 80IA of the Act, 1961.

AO show caused the assessee to explain how its business falls in the category of infrastructure facility u/s. 80IA because 80IA (4) only covers Airport and not cargo handling etc. AO observed that since the agreement is not directly with the Government of India, as required by Section 80-IA, and the agreement is with BIAL, so also benefit of Section 80IA shall not be eligible.

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