"Operator and Maintainer" of Infrastructure Eligible for Tax Sops: ITAT Rules in Favour of Mundra [Read Order]
The tribunal comprising Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member) found that Mundra International Container Terminal had entered into a sub-concession agreement with Adani Ports and Special Economic Zone Ltd, which in turn had a concession agreement with the Gujarat Maritime Board.
![Operator and Maintainer of Infrastructure Eligible for Tax Sops: ITAT Rules in Favour of Mundra [Read Order]](https://images.taxscan.in/h-upload/2025/10/06/2094290-infrastructure-taxscan.webp "Operator and Maintainer of Infrastructure Eligible for Tax Sops: ITAT Rules in Favour of Mundra [Read Order]")
The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench held that a company which operates and maintains an infrastructure facility is eligible to claim a tax deduction under Section 80-IA of the Income-tax Act, 1961. The decision provides clarity on the scope of eligible activities for the tax incentive, emphasising that the benefit is not restricted only to the entity that develops the infrastructure.
Mundra International Container Terminal Private Limited, which had been locked in a dispute with the tax department over claims for substantial deductions under Section 80-IA(4)(i) for the assessment years 2017-18 and 2018-19. The company operates and maintains a container terminal at Mundra Port. The Assessing Officer had previously disallowed the company's claim, arguing that it did not meet the specific conditions laid out in the provision, particularly since it was not the original developer of the port facility.
However, the ITAT bench, in its consolidated order, rejected the tax department's stance. It upheld the earlier decision of the Commissioner of Income Tax (Appeals) who had ruled in the terminal operator's favour. The tribunal relied heavily on a precedent set by the Madras High Court in the case of CIT vs. A.L. Logistic Pvt. Ltd. (2014). In that judgement, the High Court had clarified that the benefit of Section 80-IA is intended to extend not just to the developer of an infrastructure facility, but also to an enterprise that is involved in operating and maintaining it. The court had noted that the proviso to the section ensures that a transferee or a contractor, duly approved and recognised, can claim the deduction as if the transfer had not occurred.
The tribunal comprising Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member) found that Mundra International Container Terminal had entered into a sub-concession agreement with Adani Ports and Special Economic Zone Ltd, which in turn had a concession agreement with the Gujarat Maritime Board.
This structure, the tribunal concluded, legitimately allowed the company to be recognised as the operator and maintainer of the infrastructure facility, thus making it eligible for the tax sop. Consequently, the department's appeals to disallow deductions of over Rs 383 crore for AY 2017-18 and nearly Rs 389 crore for AY 2018-19 were dismissed.
In the same order, the tribunal also addressed other issues. It upheld a disallowance of Rs 24 lakh under Section 14A of the Act concerning expenses related to exempt dividend income, dismissing both the company's and the revenue's appeals on the quantum. Furthermore, the tribunal allowed the company's claim for depreciation on intangible assets, specifically an 'infrastructure usage facility,' noting that the claim had been consistently allowed since the assessment year 2004-05.
In conclusion, the ruling brings a close to the cross-appeals for the two assessment years, with all appeals filed by both the assessee and the revenue being dismissed.
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