TaxTMI 
TaxTMI 
2016 (11) TMI 1739
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....tributors u/s 40(a)(ia) 107,94,10,100/- (3) Disallowance of roaming charges Paid u/s 40(a)(ia) 11,95,70,267/- (4) Lease rental paid to IBM 6,23,19,912/- 3. Being aggrieved with the said actions of the Assessing Officer, the assessee filed appeal before the CIT(A). The CIT (A) partly allowed the appeal of the assessee. Therefore, the assessee as well as the Revenue filed present appeals. 4. The Ld. AR submitted that Ground No. 1 of the Revenue's appeal relating to applicability of Section 35ABB to license fee and spectrum charges amounting to Rs. 149,06,33,990/- is covered by the decision of the ITAT Delhi Bench in assessee's own case in respect of A.Y. 2008-09 (ITA No. 2795/DEL/2012 dated 21.04.2016) wherein the Hon'ble Delhi High Court's decision in assessee's own case was followed for A.Y. 2004-05. The Hon'ble Delhi High Court held that the expenditure incurred towards licence fee is partly revenue and partly capital. Licence fee payable upto 31st July, 1999 should be treated as capital expenditure and licence fee on revenue sharing basis after 15th August, 1999 should be treated as revenue expenditure. Thus capital expenditure is qualified for deductio....
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....licable. 7. Ground No. 2 to 2.4 of the assessee's appeal, the Ld. AR submitted that the same is related to applicability of Section 194J of the Act to the payment made by the assessee company for roaming charges to other telecom service providers for Rs. 11,95,70,267/-. The Ld. AR submitted that this issue is also covered in favour of the assessee by the decision in case of the ITAT Delhi Bench in assessee's own case for A.Y. 2008-09 (ITA No. 2795/Del/2012 dated 21.04.2016 and A.Y. 2006-07 as well wherein the Tribunal held that since Jaipur Bench of Tribunal has held for A.Y. 2008-09 that provisions of Section 194J are not applicable, the appeal of the assessee was allowed. The Ld. AR submitted that addition u/s. 40(a)(ia) of the Act has been deleted as the assessee has been held not to be in default u/s 201 of the Act in respect of applicability of Section 194J of the Act. In assessee's own case for A.Y. 2008-09, ITAT, Jaipur Bench (A.Y. 2004-05 to 2009-10) as well as Gauhati Bench (A.Y. 2006-07 to 2010-11) held that the assessee is not in default u/s 201 of the Act on account of non-deduction of TDS u/s 194J in regard to roaming charges to other telecom service providers. Thus....
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.... 150 & 4552/DEL/2007. 9.2 The second issue in revenue's appeal is regarding addition on account of lease rent paid to IBM to the extent of Rs. 6,23,19,912/-. The same is also in favour of the assessee as per the Tribunal's order in assessee's own case for A.Y. 2008-09 wherein it is held that the service cum lease agreement between the assessee and IBM as well as Nortel clearly lays liability on IBM and substance of the transaction suggests that the beneficial ownership remained with IBM and not with assessee and therefore the assessee had rightly claimed the entire lease rent paid by it to IBM. The facts are identical in the present Assessment Year 2009-10. 9.3 In respect of Assessee's appeal, Ground No. 1 to 1.4 regarding to applicability of Section 194H of the Act to discount allowed to distributors on the sale of prepaid cards which carry "Right to Use of Airtime" and disallowance to that extent for Rs. 1,07,94,10,000/- by the AO. Addition under Section 40(a)(ia) has to be deleted as the assessee was not in default under Section 201 of the Act in respect of applicability of Section 194H of the Act. The Assessee company was carrying out telecom business in the Rajasthan Cir....
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..... By respectfully following our own decision on similar fact, we reverse the order of the ld CIT (A) and allow the appeal of the assessee on this ground. Similarly in the case of Bharti Hexacom Limited, ITAT Guwahati Bench has held that assessee to be not in default u/s 194H of the Act. Thus no tax was determined as deductible under Chapter XVIIB. Computational provisions of Section 40(a)(ia) cannot operate if machinery provisions of Chapter XVII-B - Section 201 read with Section 194H of the Act are not applicable. 9.4 In respect of Ground No. 2 to 2.4 of the assessee's appeal as regards to applicability of Section 194J of the Act to the Payment made by the assessee company for roaming charges to other telecom service providers to the extent of Rs. 11,95,70,267/-. The Jaipur Bench of ITAT recorded a finding in para 11 (ITA No. 656/JP/2010) as follows: "11. We have heard the rival contentions of both the parties and perused the material available on the record. After going through the order of the Assessing Officer, ld CIT(A); submissions of the assessee as well as going through the process of providing roaming services; examination of technical experts by th....