Tribunal allows appeal on license fee disallowance for capital expenditure. Consistency in tax matters emphasized.

The tribunal allowed the appeal of the assessee regarding the disallowance of the annual license fee as a capital expenditure for Assessment Year 2014-15. The tribunal emphasized the need for consistency in tax matters and directed the deletion of the addition made by the Assessing Officer. Other issues concerning deduction under section 35ABB, charging of interest under section 234B, and initiation of penalty under section 271(1)(c) were not extensively discussed in the judgment.

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Issues involved:
1. Disallowance of annual license fee as capital expenditure
2. Justification of deduction under section 35ABB
3. Charging of interest under section 234B
4. Initiation of penalty under section 271(1)(c)

Issue 1: Disallowance of annual license fee as capital expenditure:
The appeal was filed against the order determining the income for Assessment Year 2014-15. The assessee, a subsidiary of a telecom company, had paid an annual license fee of &8377; 51,63,89,972 and claimed it as a revenue expenditure. The Assessing Officer (AO) considered the fee as capital in nature due to its enduring advantage to the assessee. The Department's stand was supported by Supreme Court cases. The Dispute Resolution Panel (DRP) upheld the AO's decision. However, the assessee argued that similar payments were allowed in previous years and no change in facts justified disallowance. The tribunal agreed, citing the need for consistency in tax matters and directed the deletion of the addition made by the AO.

Issue 2: Justification of deduction under section 35ABB:
This issue was not adjudicated as it was contingent on the decision regarding the disallowance of the annual license fee. The tribunal's decision on the first issue rendered this issue academic and therefore not discussed further.

Issue 3: Charging of interest under section 234B:
The tribunal did not address this issue specifically in the judgment. It was mentioned that Ground No.4, related to the charging of interest, was considered consequential and did not require adjudication. Hence, no detailed analysis or decision was provided regarding the charging of interest under section 234B.

Issue 4: Initiation of penalty under section 271(1)(c):
Similarly, the tribunal did not provide a detailed analysis or decision regarding the initiation of penalty under section 271(1)(c). Ground No.5, related to the penalty, was considered premature and not discussed in the judgment. Therefore, no specific information was provided regarding the penalty issue.

In summary, the tribunal allowed the appeal of the assessee concerning the disallowance of the annual license fee as capital expenditure. The tribunal emphasized the importance of consistency in tax matters and directed the deletion of the addition made by the Assessing Officer. The other issues related to the deduction under section 35ABB, charging of interest under section 234B, and initiation of penalty under section 271(1)(c) were not discussed in detail in the judgment.

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