TaxTMI 
TaxTMI 
TaxTMI 
2018 (1) TMI 928
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.... (Appeals)- 19, New Delhi qua the assessment year 2000-01 on the grounds inter alia that :- "On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax Appeals - XIX, New Delhi ('learned CIT(A)') has erred in passing an order under section ('u/s') 250 of the Income Tax Act, 1961 ('Act'), partly confirming the order passed by the Deputy Commissioner of Income Tax, Circle 12(1), New Delhi ('learned AO') in the order passed u/s 143(3) for the subject A Y. Ground No. 1- Disallowance of license fee u/s 37(1) of the Act 1.1. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in upholding the order of the learned AO that the a....
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....he facts and in the circumstances of the case and in law, the learned CIT(A) has erred in not appreciating that the character of receipt is decided in law at the time of the receipt and that such character does not change by any subsequent event and hence merely because the amount is waived during the captioned year, what was originally received as a capital receipt does not lose its character and become a revenue receipt. 4.2. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in not appreciating that the copy of the Foreign Inward Remittance Certificate ('FIRC') submitted by the Appellant clearly evidences that the purpose of remittance was 'collateral against facilities', thereby....
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....lusively for the purpose of business nor the assessee company brought on record any evidence that it was not a mere provision and not a sum actually paid or incurred. Assessee company has claimed deduction of Rs. 5,29,34,650/- as capital receipt in computation of income. AO disallowed the same on the ground that the assessee company has failed to submit the agreement, copy of agreement or the receipt of this sum or the waiver of liability by the Swisscom and as such, the exact amount of the said receipt is not clear. 3. Assessee carried the matter by way of filing appeal before the ld. CIT (A) who has partly upheld the assessment order by partly allowing the appeal. Feeling aggrieved, the assessee company has come up before the Tribunal by....
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.... July, 1999. As per the discussion above, the licence fee payable on or before 31st July, 1999 should be treated as capital expenditure and the licence fee payable thereafter should be treated as revenue expenditure. In view of the aforesaid position, the question of law admitted for hearing in this appeal as recorded in the order dated 21st August, 2013, has to be answered in favour of the revenue and against the respondent assessee." 8. So, following the decision rendered by the Hon'ble High Court, we are of the considered view that AO/CIT (A) have erred in disallowing the amount of Rs. 51,60,37,612/- being the capital expenditure amortized u/s 35ABB incurred for obtaining telecommunication licence from the DoT. So, the amount of Rs. 51....
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....e of the considered view that the funds invested was for commercial business expediency and are allowable u/s 37 of the Act being investment in the subsidiary company. 12. Hon'ble Supreme Court in S.A. Builders Ltd. vs. CIT, Chandigarh - (2007) 288 IT4 1 (SC) held that, "even when the expenditure has not been incurred under any legal obligation yet is allowable to be as business expenditure if it was incurred on ground of commercial expediency." So, in this case, we are of the considered view that investment in the OFCD by the assessee company in its subsidiary to utilize the license of ADIL for telecom is certainly a commercial expediency and is allowable u/s 37 of the Act as contended in the alternative. So, ground no.2 is determined in ....