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2015 (12) TMI 1505 - AT - Income TaxDeduction u/s 35ABB (2) - Held that:- In view of prohibition to transfer the original license, we reject the claim of the assessee for deduction of the whole sum paid under Phase-I of the license u/s 35ABB (2) of the Act and confirm the order of CIT(A) on this count. Deduction u/s 35ABB (1) - Held that:- Assessee has exercised option to migrate to Phase-II and not to continue under phase-I policy. As per chart submitted by the assessee showing difference between the Phase-I and Phase II, there are change in the payments terms which has become from fixed payment regime to revenue sharing regime, in the conditions pertaining to shareholding, conditions for appointment of directors, hiring of broadcasting equipment's etc. As we have already held that migration of license of assessee from phase-I to phase-II is just modification of terms and conditions of the license and these modification cannot be said that old license granted to assessee in phase-I has ceased or not in force. Therefore we are unable to persuade ourselves that the terms of licence granted in Phase-I has come to an end. In our view terms and conditions of license has been modified in above manner and tenure of the same is also extended and license granted in Phase-II is not independent of license granted to assessee in Phase-I. Therefore the claim of the assessee for deduction of above sum u/s 35ABB (1) is also not correct. Whether the amount of unallowed capital expenses paid by the assessee under phase-I policy is a capital loss or whether such a sum is allowable to the assessee? - Held that:- The reason given by CIT(A) for allowing the deduction of fees paid by assessee under PHASE-I over the remaining life of the license granted under PHASE-II of the regime. We do not find any infirmity in the finding as well as reasoning given by CIT(A) as in substances the reason canvassed by CIT(A) are similar to what we have propounded in our order. In view of this we confirm the order of CIT(A) in granting deduction of ? 1,26,58,244/- being 1/10th of ? 12,65,82,440/- being fees paid by assessee in Phase-I as deductible expenditure u/s 35ABB(1) during the year under consideration i.e. A.Y. 2006-07 - Decided against assessee. Depreciation u/s 32(i) (ii) on the amount of license fees - Held that:- We are of the view that provision of section 35ABB(8) which provides that Where a deduction for any previous year under sub-section (1) is claimed and allowed in respect of any expenditure referred to in that sub-section, no deduction shall be allowed under sub-section (1) of section 32 for the same previous year or any subsequent previous year. Further as held by is in deciding the issue of allowability of claim of the assessee u/s 35ABB (1) wherein we have allowed the claim of the assessee on proportionate basis from remaining years of license, the claim of the assessee cannot be accepted - Decided against assessee. Interest income - assessed as business income OR income from other sources - Held that:- Before CIT(A) the details of such interest income was not furnished by AR of the assessee and same was no such details have been furnished before us. In the assessment order also, AO has not mentioned the reason for changing the head of bank interest income from "Business Income "offered by assessee to 'income from other sources'. Therefore in the interest of justice we set aside this ground of appeal of the assessee back to the file of AO to decide the same on merit after affording reasonable opportunity of hearing to assessee. - Decided in favour of assessee for statistical purposes. Direction by CIT(A) to verify the record and allow carry forward of unabsorbed depreciation/ business loss as per law - Held that:- Assessee submitted before CIT(A) that it has only carried forward of unabsorbed depreciation of previous years of ? 9796408/- and ? 12521695/- of unabsorbed Business loss as per assessment order for AY 2004-05. Against this CIT(A) has granted a direction to AO verify the record and allow carry forward of unabsorbed business loss and depreciation in accordance with the law. We do not find any infirmity in the order of CIT (A) - Decided against revenue
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