TaxTMI 
TaxTMI 
2010 (6) TMI 861
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....of traditional cable line with optical fiber cable. 2. Shri K.V.N. Charya, the departmental representative submitted that the assessee is engaged in distribution of television channels through cable net work. During the assessment year under consideration, the assessee has claimed an expenditure of Rs. 66,81,000/- towards laying of cables and claimed the same as Revenue expenditure. However, the assessing officer disallowed the claim of the assessee by holding that the expenditure was in the capital field and allowed depreciation @ 15%. According to the learned departmental representative, the assessee claimed before the lower authorities that there was some dispute between the assessee and the other cable net wor....
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....mental representative, the replacement of the ordinary cable by optical fiber cable would definitely give an enduring benefit to the assessee. Therefore, it has to be treated as capital expenditure. The learned departmental representative further pointed out that when the assessee replaced traditional cable by optical fiber cable, there was up gradation. Therefore, the expenditure incurred by the assessee has to be treated as capital expenditure. Referring to the order of the CIT (A), the learned departmental representative pointed out that the CIT (A) is not correct in saying that no new asset came into existence. 3. On the contrary, Shri K. Vasant Kumar, learned counsel for the assessee submitted tha....
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....ubmitted that when the assessee laid optical fiber cable, there is no guarantee that the optical fiber cable gives any benefit. The assessee has the very same risk of damage being cast by rival operators. The learned counsel further submitted that the cable lines are laid in the public premises and it is out of the control of the assessee. Therefore, the risk of being damaged by rival group, theft by anti socials cannot be ruled out. In those circumstances, according to the learned counsel, the expenditure incurred by the assessee has been rightly allowed by the CIT (A). 4. We have considered the rival submissions on either side and also perused the material available on record. Admittedly, the a....
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....o maintain proper cable net work system as well, in order to give better quality of signal to the customers/viewers. When the traditional cable was damaged, the assessee has to maintain the cable which will give a better quality of signal to the customers/viewers. Therefore, the assessee has replaced the traditional cable into optical fiber cable. By replacing into optical fiber cable, as rightly contended by the learned counsel for the assessee, the viewers may get a better signal. It is not the contention of the Revenue that the subscriber or customer base has increased due to optical fiber cable. The contention of the learned departmental representative is that the assessee may switch over to DTH method of t....