Delhi ITAT Permits Deduction U/S 80IA Based on the Profits Earned as Per an Agreement with Dial

Deduction claimed under Section 80IA of the Income Tax Act, 1961 on account of profit derived as per the agreement with Delhi International Airport Limited ( DIAL ) is permitted by the Delhi bench of Income Tax Appellate Tribunal (ITAT).

In the current case, the taxpayer Celebi Delhi Cargo Terminal Management India Pvt. Ltd. is committed to the business of warehouse management at Indira Gandhi International Airport ( IGIA ), New Delhi as a one-stop services provider to the customers that comprised of airlines, exporters, importers, domestic air cargo, perishable, pharma and express handling.

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The taxpayer is a joint venture between a Turkish Company M/s Celebi Hava Servisi and M/s Delhi International Airport Limited ( DIAL ) formed as a Special Purpose Vehicle Company for the up-gradation, operation, and maintenance of the cargo terminal at Indira Gandhi International Airport (IGIA), New Delhi.

The Indian taxpayer has penetrated an Operation Management and Development Agreement ( OMDA ) with the Airport Authority of India ( AAI ) beneath which DIAL has been awarded the exclusive right and authority in the term of OMDA ( 30 years effective from 03/05/2006 ) to operate, maintain, develop, design, construct, upgrade, modernize, finance and manage the IGIA, New Delhi.

As per the concession agreement between M/s DIAL, M/s Celebi Hava Servisi, and the taxpayer dated 24/08/2009, for 25 years the taxpayer has obtained the concession to upgrade, modernize, and finance the cargo terminal and the common area and to operate, manage, and maintain that for generating the cargo services.

The company availed the deduction under section 80IA of the Act for the profits made via the mentioned activity for A.Y. 2011-12, 2012-13 and A.Y.2013-14 granted relief to the taxpayer by mandating the AO to grant deduction u/s 80IA of the Income Tax Act.

The two-member bench of M. Balaganesh ( Accountant Member ) and Yogesh Kumar U.S. ( Judicial Member ) permitted deduction availed under Section 80IA of the Income Tax Act, 1961 based on the profit made according to the agreement with Delhi International Airport Limited ( DIAL ).

For the taxpayer, Ankit Agrawal appeared as counsel and Vivek Kumar Upadhyay, counsel appeared for revenue.

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