LAWS(DLH)-2013-12-217

COMMISSIONER OF INCOME TAX Vs. BHARTI HEXACOM LTD

Decided On December 19, 2013
COMMISSIONER OF INCOME TAX Appellant
V/S
Bharti Hexacom Ltd Respondents

JUDGEMENT

(1.) THIS common judgment/order will dispose of appeals filed by Commissioner of Income Tax, Delhi ­ I/Delhi VI, as identical question of law arise for consideration in the following cases: <FRM>JUDGEMENT_3757_ILRDLH23_2013.htm</FRM>

(2.) THE principal and core issue raised in the present appeals is similar i.e. whether licence fee payable is capital or revenue expenditure. However, there is one basic difference between appeals listed at Sl. Nos. 1 to 9 in paragraph 1 above, and the appeal in the case of Hutchison Essar Pvt. Ltd. i.e. ITA 417/2013 which should be noticed and referred to at the very outset. The said appeal relates to assessment year 1999 -2000 and pertains to licence fee paid under and in terms of an agreement executed in 1994 with the Department of Telecommunications/Government of India, whereas other appeals listed at Sl. Nos. 1 to 9 above, relate to variable licence fee on revenue sharing basis paid under the new Telecom Policy, 1999. However, as the facts and issues are identical, we have deemed it appropriate to decide the appeal filed against Hutchison Essar Pvt. Ltd. along with appeals at Sl.Nos. 1 to 9. Wherever necessary, we have dealt with the issue and contentions raised in the said appeal separately.

(3.) AS is apparent from the substantial question of law quoted above, the issue raised is whether the variable licence fee paid by the respondents under Indian Telegraph Act, 1885, and Indian Wireless Fee Act 1933, payable under the New Telecom Policy 1999 or 1994 agreement, is revenue expenditure or capital expenditure which is required to be amortized under Section 35ABB of the Income Tax Act, 1961 (Act, for short).