2015 (1) TMI 1259

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....f the order passed by the ITAT on 29.05.2009. 2. Ld. AR inviting attention to the order of the Hon'ble High Court submitted that the Remand in the present proceedings is limited to the issue addressed in Ground No.-4 raised by the assessee in its appeal. It was his submission that the issue had been decided by the ITAT in assessee's favour however the Hon'ble High Court has remanded the same to the ITAT with the direction to decide the issue on facts wherein the Hon'ble High Court deciding the issue on facts has held that if the payment for interest pertains to the period prior to the 31.07.1999 then it has to be capitalized u/s 35ABB of the Act. It was his stand that on behalf of the assessee he was instructed to state t....

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....directed to delete the said addition and grant the assessee benefit of this expenditure u/s 37(1) of the Act. In the circumstances, Ground No.4 is allowed." 3.2. Apart from other issues the correctness of the above finding was challenged by the Revenue before the Hon'ble High Court in appeal. The Hon'ble High Court considering the arguments on facts and examining the variable licenses fee paid by the respondents under the India Telecom Act, 1885, and the Indian Wireless Fee Act, 1933 payable under the New Telecom Policy 1999 or 1994, Agreement was called upon to decide whether the payments were of the nature of revenue expenditure or capital expenditure which was required to be amortized u/s 35ABB of the Income Tax Act, 1961. Con....

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.... Ltd., the assessee had paid interest of Rs. 1.75 crores and Rs. 2.24 crores to the Department of Telecommunication for delayed payment of license fee. The Assessing Officer disallowed the said payments observing that these were on capital account. The assessment order records that no details had been furnished and the expenses pertained to prior period. The payment was considered to be capital in nature because the license fee was also capital expenditure. 51. Commissioner (Appeals) in the case of Bharti Cellular Ltd. (ITA 893/2010) held that interest paid was capital expenditure because license fee itself was capital in nature. The said opinion was followed by Commissioner (Appeals) in the case of Bharti Telenet Ltd., now known a....