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2023 (4) TMI 1168 - AT - Income TaxNature of expenditure - Addition of licence fee as capital expenditure - as per AO Act provides for such capital expenditure to be amortised as per provision of section 35ABB over unexpired portion of the licence. The unexpired portion of the licence from assessee’s document is 8.5 years - assessee has contended that in three preceding AY(s) and in succeeding AY 2011-12 the said payment of licence fee has been allowed as revenue expenditure - HELD THAT:- A different view has been taken by the Ld. AO in AY 2010-11 presently under consideration. The contention of the assessee could not be controverted by the Ld. DR. In our view, a different approach without there being variation in facts or in law is not justified. CIT(A) has placed reliance on the decision of Bharti Hexacom Limited [2013 (12) TMI 1115 - DELHI HIGH COURT] as also on the decision of Delhi Tribunal in the case of M/s. MTNL [2006 (2) TMI 224 - ITAT DELHI-G] for recording his findings in favour of the assessee with which we concur. Accordingly ground No. 1 of the Revenue is rejected. Addition u/s 41(1) - unexplained creditors - entire amount standing in the name of sundry creditors as reflected in the Balance Sheet as on 31.03.2010 for want of submission by the assessee of details as per the format devised by him under section 41(1) - addition deleted by the Ld. CIT(A) - HELD THAT:- As per CIT-A addition under section 41(1) can be made only if a genuine trade liability has ceased to exist for the reasons enumerated in section 41(1) of the Act. We agree. CIT(A) has recorded the finding that the Ld. AO has not made the impugned addition by holding that these liabilities ceased to exist during the year. None of the conditions precedent for applicability of the provisions of section 41(1) is fulfilled in the case of the assessee. The Ld. AO was thereof not justified at all to invoke the provisions of section 41(1) to make the impugned addition and the Ld. CIT(A) has rightly observed that the impugned addition can be deleted on this ground alone.O was not justified in treating the entire trade creditors as bogus when majority of them were well-established public sector undertakings or limited companies e.g. BSNL, MTNL, Bharti Airtel Ltd., HCT Info-systems Ltd. and Tata Tele Services Ltd. etc. as observed by the Ld. CIT(A) whose identity cannot be questioned. Decided in favour of assessee.
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