Telecom policy payments treated as revenue expenditure and deductible in income computation under binding precedent.

Quarterly payments made under the telecom policy were treated as revenue expenditure, not capital expenditure, because the court applied the binding precedent in Bharti Hexacom Ltd. to hold that such payments are deductible in computing income and do not qualify only for depreciation. The appellate view treating the outlay as revenue was affirmed, and the revenue's contention was rejected, leaving no substantial question of law.

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Issues: Whether the quarterly payments made under the telecom policy were capital expenditure eligible only for depreciation, or revenue expenditure deductible in computation of income.

Analysis: The issue turned on the character of the payments made by the assessee in the light of the National Telecom Policy 1999. The appellate authorities had treated the expenditure as revenue expenditure. The court noted that the controversy stood covered by the later decision in Bharti Hexacom Ltd., which held such payments to be revenue in nature and not capital expenditure. In view of that binding precedent, no substantial question of law survived.

Conclusion: The payments were held to be revenue expenditure and not capital expenditure; the revenue's contention was rejected.

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