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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 9^TH DAY OF AUGUST, 2021

PRESENT

THE HON'BLE MR. JUSTICE SATISH CHANDRA SHARMA

AND

THE HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

I.T.A.NO.224 OF 2021

BETWEEN:

1. PR. COMMISSIONER OF INCOME TAX-2

CENTRAL REVENUE BUILDINGS,

QUEENS ROAD, BANGALORE-560 001

2. THE DEPUTY COMMISSIONER OF INCOME TAX

CIRCLE-4(1)(2), BANGALORE

...APPELLANTS

(BY SRI.SANMATHI E I, ADVOCATE)

AND:

M/S.MENZIES AVIATION

BOBBA (BANGALORE) PVT LTD

PLOT NO.C-041

BANGALORE INTERNATIONAL AIRPORT

DEVANAHALLI, BANGALORE -560 300

PAN-AAECM6862D

…RESPONDENT

(BY SRI.ANNAMALAI.S, ADVOCATE)

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THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT

1961, ARISING OUT OF ORDER DATED 27/01/2021 PASSED IN ITA

NO.616/BANG/2019, FOR THE ASSESSMENT YEAR 2014-2015

PRAYING THIS HONBLE COURT TO 1. DECIDE THE FOREGOING

QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS

MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT

AND 2. SET ASIDE THE APPELLATE ORDER DATED 27/01/2021

PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, A BENCH,

BENGALURU, IN APPEAL PROCEEDINGS IN ITA NO. 616/BANG/2019

FOR ASSESSMENT YEAR 2014-2015, AS SOUGHT FOR IN THIS

APPEAL, AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN

THE INTEREST OF JUSTICE.

THIS APPEAL COMING ON FOR ADMISSION THIS DAY,

SATISH CHANDRA SHARMA J., DELIVERED THE FOLLOWING:

JUDGMENT

Shri S.Annamalai, learned counsel accepts notice on

behalf of the respondent.

2.

The present Income Tax appeal is arising out of the

order passed in respect of assessment year 2014-15 in

ITA.No.616/Bang/2019.

3.

The department has raised the following substantial

questions of law in the present appeal and they are detailed as

under:

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"1.

Whether

on

the

facts

and

in

the

circumstances of the case, the Tribunal was justified in

law in holding that the BIAL is a Statutory Body when

it cannot be considered as it is a corporate body in

which KSIIDC is holding a mere 13% share in BIAL

registered under Companies Act and it fails to satisfy

the requirements of section 40IA(4) of the I.T. Act?

2.

Whether

on

the

facts

and

in

the

circumstances of the case, the Tribunal is justified in

law in holding that the cargo handling contract

entered into with BIAL by assessee is with statutory

body satisfying condition set forth in section 80IA(4)

when BIAL is only a Company whose motive only

making profit and is only a instrument of State?

3.

Whether

on

the

facts

and

in

the

circumstances of the case, Tribunal's order is perverse

for claiming deduction under section 80IA(4)(ib) of the

Act even when the assessee has not satisfied the

conditions set out in the said provision to make such a

claim as the assessee has not entered into agreement

with Government nor is involved in development of

infrastructure activity as defined in the Act?"

4.

It is noteworthy to mention that in respect of

earlier assessment year i.e., 2009-10, similar substantial

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questions of law were framed in I.T.A.Nos.186/2016 c/w

262/2014 and they have been decided against the revenue

and in favour of the assessee.

5.

In the light of the aforesaid, the order passed by

this Court in I.T.A.Nos.186/2016 c/w 262/2014 is reproduced

as under:

"These appeals under Section 260A have been

filed by the revenue against the order dated

05.10.2015 and 30.01.2014, respectively, passed by

the

Income

Tax

Appellate

Tribunal

(hereinafter

referred to as 'the Tribunal' for short). Both the

appeals pertain to the Assessment Year 2009-10. ITA

No.186/2016

was

admitted

vide

order

dated

24.01.2018 on the following substantial questions of

law:

"Whether, on the facts and in the circumstances

of the case, the Tribunal is justified in law in

holding that the cargo handling contract entered

into with BIAL by assessee is with statutory body

satisfying condition set forth in section 80IA(4)

when BIAL is only a Company whose motive only

making profit an