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2010 (6) TMI 558 - ITAT MUMBAI
Disallowance - Scrutiny - Capital or revenue expenditure - Depreciation - In the case of the assessee though the licence was granted for 10 years initially, however, as per terms of licence the assessee is required to pay licence fee payable every year on quarterly basis - The assesee company has shown licence operating fee under the head miscellaneous expenditure as balance sheet item and amortized the same over the validity period of licence i.e. 10 years - Once the fees paid is for the period covered by the relevant previous only, there is no question of amortization of expenses over a period of ten years; entire amount of the fees so paid should have been allowed as deduction as revenue expenditure - provisions of section 35 ABB of the Act are not applicable as both expenses are revenue in nature, allowable u/s.37(1) of the Act in computing the profits of the business
Disallowance of interest Rs.41,66,122/- u/s.40A(2) - the issue of levy of interest u/s.234D of the Act is covered in favour of the assessee
Since the ground raised by the assessee before the ld. CIT(A) is a legal ground, and keeping in view the ratio of decision in National Thermal Power Co. Ltd. vs. CIT (1996 -TMI - 5626 - SUPREME Court) - the common ground raised by the revenue is devoid of any merit and accordingly the same is rejected - In the result, the assessee's appeals are allowed and the assessee's C.O. and revenue’s appeals stand dismissed