ORDER PER MAHAVIR SINGH, VP :

The captioned appeal has been filed by the Revenue against the order of the First Appellate order dated 04.08.2023 passed by NFAC, New Delhi u/s

250 of the Income Tax Act, 1961 pertaining to assessment year 2017-18.

2. The Revenue has raised following grounds of appeal:-

“(a) Whether the Ld. CIT(A) has erred on facts by considering CIAL and DIAL as statutory bodies.

(b) Whether the Ld. CIT(A) has erred on facts and in law in deleting the disallowance of deduction u/s 80IA of the Act as the assessee has not fulfilled basic condition to claim the said deduction.”

3. The brief facts of the case are that assessee company filed its income tax return on 31.10.2017 declaring taxable income of Rs.4,13,13,970/-, on a total turnover of Rs.246.26 crores after ‘claiming deduction under section 80IA of the Act of Rs.50,08,76,152/- on profits derived from ground handling operations at Delhi and Cochin Airport. However, it paid tax on book profits of Rs.52,97,70,419/- since the tax payable under section 115JB of the Act was higher than the regular provision consequent to the claim of the deduction under section 80IA of the Act. Subsequently, the case was selected for scrutiny assessment and the assessment in this case was completed on 20.12.2019 at an assessed income of Rs.54,21,90,122/-.

4. Aggrieved, the assessee preferred appeal before the CIT(A). The CIT(A)

deleted the addition made by the AO by observing and holding as under:- “1 1. I have perused the grounds of appeal and submission of the appellant. The learned AO has carried out disallowance of Rs.50,08,76,152/- on account of reversal of 80IA deduction as claimed by the Company.

2. The learned AO contended that the assessee company is not engaged in any business related to development, operation or maintenance of infrastructure facility. Furthermore the assessee company has not entered into any agreement with Central Government, State Government, local authority or statutory body as mandated section 80IA(4) of the I T Act. In this regard the appellant filed multiple grounds of appeal which are disposed off as under collectively.

3. The assessee company is providing ground handling services at the Indira Gandhi International Airport, Delhi (DIAL). Similarly assessee is undertaking ground handling services as per the Concession Agreement with Cochin International Airport (CIAL).

4. The moot point here remains that whether the DIAL/CIAL, as the case may be, can be considered a government entity with whom the assessee company has entered into an agreement and performing ground handling services for an airport is eligible for

80IA deduction or not.

5. Perusal of the relevant acts and submissions of the assessee makes it clear that Airport Authority of India (AAI) is responsible for the development, operation, management and maintenance of airports in India and pursuant to the Operation and Maintenance and Development Agreement (OMDA) has granted exclusive right to undertake the operations, maintenance, development, design, construction, upgradation, modernization, finance and management of Indira Gandhi International Airport to DIAL. The Airport Authority of India is a statutory body established under the Airport Authority of India Act, 1994. Delhi International Airport (DIAL) is a joint venture consortium of GMR Group (64%), Airports Authority of India (26%) and Fraport (10%). In CIAL also AAI has its shareholding.

6. The DIAL/ CIAL are a private companies limited by shares incorporated under the laws of India, obligated to perform certain duties and functions as per the OMDA with the Airports Authority of India. Both are incorporated as a company and running through a concession themselves. Bodies that are statutory authorities will not need a separate concession because the statute will give them powers. Had the DIAL or CIAL been statutory bodies, they would have derived their powers from the statute themselves.

7. The ground handling services are provided as per permis