DCIT, New Delhi V. M/s. Bharti Telemedia Ltd., New Delhi

ITA 3619/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3453 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 17-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: GAU RAV WADHWA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-3619/DEL/2014 ( ASSESSMENT YEAR: 2010-11) DCIT CIRCLE 2(1) NEW DELHI. VS BHARTI TELEMEDIA LTD. 1, ARAVALI CRESCENT, NELSON MANDELA ROAD, VASANT KUNJ, NEW DELHI. AADCB0147R ASSESSEE BY SH. GAURAV WADHWA, CA REVENUE BY SH. S.K. JAIN, SR. DR ORDER PER K. NARSIMHA CHARRY, J.M. THIS IS AN APPEAL BY THE REVENUE CHALLENGING THE OR DER DATED 28.04.2014 IN APPEAL NO. 1/2013-14 BY THE COMMISSIO NER OF INCOME TAX (APPEALS)-V, NEW DELHI. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE COMPA NY WAS INCORPORATED ON 30.11.2006, ENGAGED IN THE BUSINESS OF SETTING UP, OPERATING AND MAINTAINING DIRECT TO HOME (DTH) SERVICES DATE OF HEARING 24.04.2017 DATE OF PRONOUNCEMENT 24 .04.2017 2 ITA NO.3619/DEL/2014 INCLUDING DIGITAL AND ANY OTHER MODE OF INTERACTIVE BROADCASTING SERVICE. FOR THE AY 2010-11 THEY HAVE FILED THEIR RETURN OF INCOME DECLARING A LOSS OF RS. 3,75,55,40,000/- ON 11.10.2 010 AND DURING THE COURSE OF THE ASSESSMENT AO OBSERVED THAT AN AM OUNT OF RS. 31,69,23,129/- WAS PAID AS LICENSE FEE AND SPECTRUM CHARGES CLAIMED AS EXPENDITURE ON REVENUE SHARING BASIS. B UT SINCE THE CLAIM OF THE ASSESSEE HAD BEEN CONSISTENTLY DISALLO WED IN THE PREVIOUS ASSESSMENT YEARS IN THE CASE OF OTHER GROU P COMPANIES AND AMORTIZATION HAS BEEN DONE U/S 35ABB OF THE ACT , THE AO CONCLUDED THAT SINCE THE LICENSE WAS GRANTED ON 10. 09.2007 FOR 10 YEARS, ONLY ONE AND NINTH PORTION THEREOF I.E. RS. 3,16,92,312/- WAS ALLOWABLE AS EXPENDITURE AND THE BALANCE OF RS. 28,52,30,817/- WAS TO BE DISALLOWED. 3. APPEAL PREFERRED BY THE ASSESSEE WAS ALLOWED BY THE LD. CIT (A) BY WAY OF THE IMPUGNED ORDER. 4. THE REVENUE IS, THEREFORE, IN APPEAL BEFORE US S TATING THAT THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DE LETING THE ADDITION OF RS. 28,52,30,817/- ON AMOUNT OF AMORTIZ ATION OF LICENSE FEE AND SPECTRUM CHARGES U/S 35ABB OF THE A CT. 3 ITA NO.3619/DEL/2014 5. IT IS THE ARGUMENT OF THE LD. DR THAT THE AO NOT ED THE FACT THAT THE CLAIM OF THE ASSESSEE HAD BEEN CONSISTENTL Y DISALLOWED IN PREVIOUS ASSESSMENT YEARS IN OTHER GROUP OF COMPANI ES AND AMORTIZATION HAS BEEN DONE U/S 35ABB OF THE ACT. H E FURTHER SUBMITS THAT AO ALSO CONSIDERED THE SUBMISSION OF T HE ASSESSEE THAT THE SIMILAR ISSUE WAS COVERED IN OTHER CASES O F GROUP COMPANIES. 6. PER CONTRA IT IS THE SUBMISSION OF THE LD. AR TH AT THE ISSUE HAD BEEN DEALT IN BATCH MATTERS OF THE GROUP COMPAN IES BY A COORDINATE BENCH OF THIS TRIBUNAL AND THE HONBLE H IGH COURT IN ITA NO. 493/DEL/2014 CONFIRMED THE SAME. HE PRAYED TO DISMISS THE APPEAL. 7. WE HAVE CAREFULLY GONE THROUGH THE MATERIAL PAP ERS ON RECORD AND NOTED THAT IN BATCH OF CASES OF ITA NO. 1679/DEL/2010 A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF GROUP COMPANIES HELD THAT THE EXPENDITURE INCURRED TOWARDS LICENSE FEE ON REVENUE SHARING BASIS SHOULD BE TREATED AS REVENUE EXPENDIT URE. THESE FINDINGS OF THE TRIBUNAL WERE UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN ITA NO. 493/DEL/2014. SO ALSO WHILE F OLLOWING THE 4 ITA NO.3619/DEL/2014 ABOVE DECISIONS A COORDINATE BENCH OF THIS TRIBUNAL IN ITA NO. 6344/DEL/2012 HELD THAT THE EXPENDITURE INCURRED BY THE ASSESSEE ON LICENSE FEE AND SPECTRUM CHARGES AS REV ENUE EXPENDITURE. THE PRINCIPLES LAID DOWN ABOVE ARE AP PLICABLE TO THE FACTS OF THE CASE ON ALL FOURS AND IN VIEW OF THIS SETTLED POSITION OF LAW WE FIND THAT THE IMPUGNED ORDER IS PERFECTLY LE GAL AND DOES NOT WARRANT ANY INTERFERENCE. WE, THEREFORE, UPHOLD TH E SAME. 8. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.04.2017 SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA C HARRY) PRESIDENT JUDICIAL MEM BER DATED: 24.04.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO.3619/DEL/2014 DRAFT DICTATED ON 24.04.2017 DRAFT PLACED BEFORE AUTHOR 24.04.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 24.04.2017 KEPT FOR PRONOUNCEMENT ON 24.04.2017 FILE SENT TO THE BENCH CLERK 24.04.2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.