DCIT Vs Bird Worldwide Flight Services (India) Pvt. Ltd (ITAT Delhi)
Ground Handling at Airports Qualifies as Infrastructure Facility – Tribunal Treats DIAL & CIAL as Statutory Authorities Deduction u/s 80IA Allowed
The dispute arose from deduction u/s 80IA claimed by Bird Worldwide Flight Services (India) Pvt. Ltd. (“Assessee”) on profits from ground handling operations at Delhi (DIAL) & Cochin (CIAL) airports.
AO disallowed ₹50.08 Cr. on the ground that agreements with DIAL & CIAL were not with Government/Statutory authority as required u/s 80IA(4). CIT(A) deleted the disallowance, holding that the activities were carried out pursuant to concession agreements traceable to AAI Act & thus eligible for deduction.
On Revenue’s appeal, Tribunal examined:
- Whether DIAL & CIAL can be considered statutory bodies/authorities, and
- Whether ground handling constitutes operation & maintenance of “infrastructure facility”.
Department argued that DIAL is a private company & CIAL is a PPP entity with majority NRI shareholding, hence not statutory bodies. It stressed that agreements were with private entities & not directly with Government/AAI.
Assessee contended that ground handling is an integral part of airport infrastructure; agreements with DIAL & CIAL flow from AAI Act & Government policies; and judicial precedents (Kerala HC in CIAL, Gujarat HC in Ranjit Projects, SC in Delhi International Airport Pvt. Ltd., Karnataka HC in Flemingo Dutyfree) have recognized such concessionaires as operating under authority of Government.
