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2014 (9) TMI 119 - AT - Income TaxExpenses on abandoned project – capital or revenue in nature - expenditure was incurred by the assessee for the purpose of construction/erection of cellular towers which were abondoned due to the reason that the same were not found suitable - Held that:- the towers were being erected for the purpose of assessee's own business of providing cellular services to its customers - when the towers are not exclusively meant for leasing out to third parties for earning the revenue but used for transmission of telephone signals of assessee's own cellular services then it cannot be said that the towers which are used for the assessee's own business are new source of income - A cellular tower can be a new independent source of income if it is erected exclusively for leasing out to the other operators - to examine the allowability of such expenditure u/s 37(1), the only requirement which has to be seen is that the expenditure is of revenue nature and not capital nature – relying upon CIT Vs. Tata Robins Fraser Ltd [2012 (10) TMI 59 - JHARKHAND HIGH COURT] - the expenditure has been incurred for the project which could not be accomplished and it was intended to facilitate the assessee's business activity to be carried out more conveniently and profitably, the expenditure is an allowable revenue expenditure – Decided in favour of assesssee. Claim u/s 35ABB disallowed – Amortization of license fee - Held that:- The assessee has claimed the amortization of license fee relating to the TATA Cellular Ltd only for post amalgamation period of three months w.e.f 1.1.2000 to 31st March 2001, however during the course of assessment proceedings the assessee made a claim for the entire year u/s 35ABB for the license fee paid in respect of the TATA Cellular Ltd amalgamated with the assessee - The restriction on the jurisdiction for entertaining a fresh claim otherwise than a revised return is applicable only of the AO and not of the appellate authorities – relying upon National Thermal Power Corporation Ltd. Vs. CIT [1996 (12) TMI 7 - SUPREME Court] - there is no bar in entertaining the present claim in question by the CIT(A) even without filing the revised return - the provisions of section 35ABB(6) permits such claim only in the hands of the amalgamated company and not in the hands of the amalgamating company - Sub-section (6) makes it clear that in a scheme of amalgamation if the amalgamating company sales or transfer the license to the amalgamated company then license fee paid for the entire year is eligible for amortization u/s 35ABB only in the hands of amalgamated company - the claim of amortization of license fee relating to Tata Cellular Ltd merged with assessee for entire year u/s 35ABB – Decided in favour of assessee. License fee u/s 37(1) – Held that:- So far as the admissibility of the fresh claim first time before the appellate authority is concerned, the SC in National Thermal Power Corporation Ltd. Vs. CIT [1996 (12) TMI 7 - SUPREME Court] has dealt with the issue when it is found that non taxable item is taxed or a permissible deduction is denied, there was no reason as to why the assessee should be prevented from raising that question before the Tribunal first time so long as relevant facts are on record in respect of that item - when a claim which is otherwise allowable /permissible but was not allowed as the assessee did not claim the same in the return of income, there is nothing under law to prevent the assessee to raise the claim before the appellate authorities if the facts relating to new claim are already on record and do not require any investigation –Decided in favour of assessee. Foreign exchange loss disallowed – Principle amount not utilized for acquisition of capital assets – Held that:- As decided in assessee’s own case it has been held that, the CIT(A) was justified in coming to the conclusion that the exchange loss claimed by the assessee in P&L Account relates to loan availed for the purpose of meeting revenue expenditure - when the revenue is consistently allowing the claim of the assessee or taxing the gain arising from the foreign exchange fluctuation as income of the assessee for all three assessment years prior to the assessment year under consideration and four subsequent assessment years, there was no reason to interfere with the order of CIT(A) in allowing the claim of the assessee - Decided against revenue.
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