2012 (11) TMI 1133

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....eduction u/s.35ABB amounting to Rs. 33,55,51,000/- on account of variable license fees u/s.35ABB as against Rs. 7,18,89,545/- as allowed by the Assessing Officer'. 2."The appellant prays that the order of CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. 3."The appellant craves leave to amend or alter any ground or add a new ground which may be necessary.' 2. Assessee-company, engaged in the business of providing cellular mobile services, filed its return of income on 28-11-2003 showing current years loss of Rs. (-) 125,09,20,590/-.AO finalised the assessment u/s.143(3) of the Income-tax Act,1961(Act), on 31-03-2006, determining total loss at Rs. (-) 39,06,57,847/-. 3. During the assessment proceed....

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....the AY 2001-02, the issue was decided in its favour. The issue of variable license fee paid; to Department of Telecommunication in accordance with the new revenue sharing retime ;was decided in that case by the said order in following words: "The issue raised is that ld. Commissioner of income Tax(A) has erred in upholding an addition of Rs. 26,92,54,013/- (Rs.22,84,86,443 - 1,92,32,340/- i.e. 1/5th of 28,84,86,443/- towards variable License fee paid to the Department of Telecommunication in accordance with the new regime of to the new revenue sharing regime. 3. Before us ld. counsel of the assessee submitted that the issue is squarely covered in favour of the assessee by the decision of this tribunal in Bharti Cellular Ltd. Vs. DCIT in....

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....cumstances the licence is revoked, the appellant shall not be able to carry on its business of telephone services, unless it had paid such a licence fee to the Government. The irresistible conclusion, therefore, would be that payment of licence fee is wholly and exclusively incurred for the purpose of the business carried on by it. The same is, therefore, an allowable deduction u/s. 37 of the Act. Since the liability stands paid during the year under consideration, we direct the AO to allow the deduction to the appellant". 10. Respectfully following the decision of the coordinate bench of this Tribunal in the case of MTNL referred to supra, we are of the view that the variable revenue share licence fee paid pursuant to the migration of th....