TaxTMI 
TaxTMI 
2013 (1) TMI 64
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....r dated 9/9/2009, the revenue has formulated the following questions of law for the consideration of this Court: A) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in holding that license fees paid by the assessee company to its holding company amounting to Rs.115,09,09,090/- is an allowable expenditure u/s. 37(1) of the Income Tax Act even though the assessee company had itself amortized the said license fee for a period of ten years in its Books of Account and further Section 35ABB of the Income Tax Act was applicable to such payment as license fee? B) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified i....
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....dated 20/2/2001 disallowed expenses of Rs.115 crores claimed as license operating fee on the ground that such expenses are not allowable in one year but has to be amortized over the life of the license in view of Section 35ABB of the Act. Further, it was held that expenses were incurred for a right to operate a telecommunication service and thus is not allowable as a revenue expenditure but the same has to be amortized to the extent of the license fee attributable for the year under consideration. For this support was drawn from the fact that in its books of accounts the respondent had written off of an amount of Rs.115 crores by amortizing it over a period of 10 years. In support of the above, the assessment order drew support from the fac....
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....he assessment year 1998-99. As against the above, Mr. Percy Pardiwala, Senior Counsel for the respondent-assessee relied upon the order of the Tribunal dated 29/3/2007and submits that for the earlier years i. e. assessment year 1997-98 the Tribunal has allowed the entire amount paid as operating license fee to M/s. J.T. Mobiles Limited under Section 37(1) of the Act. Further, the order dated 29/3/2007 of the Tribunal has been accepted by the revenue and no appeal there from has been preferred by the revenue. Further, he submits that the license fee actually paid by the respondent assessee to M/s. J.T. Mobiles Limited is in the nature of operating fee which is payable yearly. Therefore the payment not being a capital expenditure is allowable....
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.... question (A). 5) Regarding question (B): a) The respondent assessee had sought a deduction on account of expenses incurred of Rs.72.46lacs as PSTN charges and Rs.95.35 lacs as dealer's commission. The Assessing officer by order dated 20/2/2001 disallowed both these expenses on the ground that they were expenses incurred prior to the date of commercial launch of service i. e. 12/1/1998. Therefore, the expenses being incurred during the pre-operative period are not admissible as deduction and added the same to respondent's income. b) In appeal, the Commissioner of Income Tax (Appeals) by order dated 7/6/2007 held that the aforesaid expenses are not pre-operating expenses as the appellant had set....
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....1) of the Act. The issue whether the expenditure has been incurred for purposes of business is an issue of fact and two authorities under the Act have rendered a finding of fact that expenses incurred on account of PSTN charges and dealer's commission are incurred for purposes of business and allowable under Section 37(1) of the Act. In view of the above, we find that no substantial question of law arises with regard to question (B). 6) Regarding question (C):- a) The respondent-assessee had claimed in its return of income deduction of Rs.12.63lacs on account of foreign travel expenses incurred by the respondent-assessee for its employees. The assessing Officer by order dated 20/2/2001 disallowed the expenditure hol....