Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s Idea Cellular Ltd. Versus Asstt. Commissioner of Income Tax

Pre-operative income - Held that:- Assessee was in receipt of ₹ 38 lacs prior to commencement of operation which was adjusted against the capital expenditure. By applying the decision of Hon’ble Supreme Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. (1997 (7) TMI 4 - SUPREME Court), the A.O. has taxed the same as ‘income from other sources’. The ld. A.R. has relied on the decision of Triveni Engineering Works Ltd. vs. CIT,[1997 (11) TMI 77 - DELHI High Court], CIT vs. B .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ering the nature of receipt vis-à-vis intrinsic connection with the capital expenditure incurred by the assessee. - Decided in favour of assessee for statistical purposes.

Provident fund dues - disallowance u/s 37 deleted by CIT(A) - Held that:- CIT(A) has allowed the claim by applying the provisions of section 43B of the Act wherein deduction n respect of provident fund was allowed on payment basis. The ld. CIT(A) held that the amount has been paid during the year under consideration .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

). As the expenditure was incurred was revenue in nature as held by the Hon’ble High Court, we do not find any infirmity in the order of ld. CIT(A) deleting the disallowance - Decided in favour of assessee.

Disallowance of brand service fees treated as capital expenditure - Held that:- brand servicing fee was paid by the assessee since last several years and in the earlier assessment orders, this expenditure has been held to be revenue in nature by the A.O. himself. No distinguishing .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vanced to subsidiaries - CIT(A) deleted the disallowance - Held that:- found that Tata Group were promoters of idea Cellular Ltd. and they were in land line telephone service in area of Madhya Pradesh. Because of this operation of Tata’s in Madhya Pradesh and because of connection between Tata’s and assessee company, assessee could not have entered into Mobile telephone services in the area of Madhya Pradesh. However, assessee wanted to enter into Madhya Pradesh for providing Cellular facilities .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ial on record, therefore do not find any reason to interfere with the order of ld. CIT(A) deleting the disallowance of interest attributable to funds advanced to subsidiaries - Decided in favour of assessee. - I .T.A. No.3261/Mum/2008, I .T.A. No.3568/Mum/2008 - Dated:- 11-3-2015 - Shri R.C. Sharma And Shri Vijay Pal Rao JJ. For the Appellant : Shri J.D. Mistry & Shri Krupa R. Gandhi For the Respondent : Shri Kishan Vyas ORDER Per R.C. Sharma, A.M. : These are the cross appeals filed by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pe of operation in 2000-01 in Andhra Pradesh by acquiring Tata Cellular Ltd. Further, in the year 2002-03, the company acquired a licence from DoT through bidding to operate in Delhi. Thus, currently the company operates in four telecom circles. The company also trades in handsets and accessories which are integral part of the nature of business in which the assessee is operating. During the course of scrutiny assessment, the A.O. observed that the assessee has shown capital work-inprogress at & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the entire pre-operative income has been accrued to the assessee during the previous year relevant to the assessment year under consideration. As per the A.O. in view of Supreme Court decision in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. Vs. CIT (227 ITR 172) it was obligatory on the part of the assessee to offer this income for taxation. Since the assessee has failed to do so, the same was brought to tax in this assessment year. An addition on this account of ₹ 38,00,0 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

td. (supra), the A.O. has taxed the same as income from other sources . The ld. A.R. has relied on the decision of Hon ble Delhi High Court in the case of Triveni Engineering Works Ltd. vs. CIT, 232 ITR 639 (Del), Hon ble Supreme Court decision in the case of CIT vs. Bokaro Steel Ltd. , 236 ITR 315 (SC) and the decision of Hon ble Delhi High Court in the case of Indian Oil Panipat Power Consortium Ltd. vs. TO (2009) 315 ITR 255 (Del) and contended that such pre-operative receipt was liable to be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

We direct accordingly. 4. The second grievance of the assessee relates to two additional grounds raised before the ld. CIT(A) for allowing Revenue Share Licencee Fees u/s 37(1) of the Act. 5. At the outset, the ld. A.R. invited our attention to the order of the Tribunal in assessee s own case in ITA No. 3260/Mum/2008 dated 29-04- 2014 for A.Y. 2001-02 wherein both the issues regarding accepting the additional ground as well as licence fees paid under revenue sharing was examined by the Tribunal .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the fresh claim first time before the appelate authority is concerned, we find that an identical issue was before the Hon ble Supreme Court in the case of National Thermal Power Corporation Ltd. Vs. CIT (supra). The issue in the said case emerged from the fact that the assessee offered an amount to tax in the return of income which was not taxable as income. The inclusion of the said amount was not objected by the assessee even before the CIT(A) and only after filing appeal before the Tribunal .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the ground no. 2. It is clear from the decision of Hon ble Supreme Court that 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 such claim before the appellate authorities if the facts relating to such new claim are already on record and do not require any investigation. Accordingly in the facts and circumstances of the case when the denial of claim .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lowable revenue expenditure. In the latest decision of Hon ble High Court of Delhi dated 9th December 2013 in the case of CIT Vs. Bharati Hexacom ltd. & Others, one of the issues before the Hon ble High Court was regarding the allowability of variable license fee on revenue sharing basis paid under the new telecom policy of 1999. The Hon ble High Court has discussed the issue and held in para 42 and 47 as under:- 42 The next obvious question is, on what basis apportionment should be done and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ntioned above in item Nos.1 to 9 is answered in the following manner: (i) The expenditure incurred towards licence fee is partly revenue and partly capital. Licence fee payable upto 31st July, 1999 should be treated as capital expenditure and licence fee on revenue sharing basis after 1st August, 1999 should be treated as revenue expenditure. (ii) Capital expenditure will qualify for deduction as per Section 35ABB of the Act. 4.6 We further note that this Tribunal in the cae of Mahanagar Telepho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he Tribunal, we direct the A.O. to allow the assessee s claim of licence fees paid under revenue sharing scheme to telephone department. We direct accordingly. 8. The first grievance of Revenue relates to allowing provident fund dues amounting to ₹ 1,70,388/-. We found that the ld. CIT(A) has allowed the claim by applying the provisions of section 43B of the Act wherein deduction n respect of provident fund was allowed on payment basis. The ld. CIT(A) held that the amount has been paid dur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the club and that right is enduring in nature. Consequently it cannot be treated as revenue. By the impugned order, the ld. CIT(A) had deleted the disallowance after observing as under:- 4.1 Learned counsel has drawn my attention to the decision of Hon'ble Mumbai High Court in the case of Otis Elevators & Hon'ble Gujarat High Court in the case of Gujarat Estate Export Corporation Ltd. reported at 209 ITR 649. In these decisions, it is claimed that the expenditure 'Under consi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the decision of Hon ble Gujarat High Court in the case of Gujarat Estate Export Corporation Ltd. reported in 209 ITR 649 (supra). As the expenditure was incurred was revenue in nature as held by the Hon ble High Court, we do not find any infirmity in the order of ld. CIT(A) deleting the disallowance of Club fees paid by the assessee company. 11. Ground No. 3 is with respect to the depreciation on licence fees amounting to ₹ 39,37,22,853/- disallowed by the A.O. This ground has become infr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

argued that the nomenclature suggests that expenditure has been incurred for projection and development of the brand and therefore it is of capital nature. He has, accordingly, made the disallowance. By the impugned order, the ld. CIT(A) allowed the claim after having the following observation:- 7.2 I have perused the facts of the case and I find the only basis for making disallowance is nomenclature of expenditure, This is not a rational base for making this disallowance. If Assessing Officer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Mistry that the payment is recurring in nature and does not give any enduring benefit to the assessee. The assessee gets only right to use the brand "AT&T" only till the time it paid such fee. In any case, "Idea" Brand was used by the assssee w.e.f. May 2002 and subsequently, AT&T exited. Hence, the question of any enduring benefit in the captioned year does not arise at all. Reliance was placed by the ld. A.R. on the following decisions for the proposition that a pay .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

found that during the year under appeal, the assessee had paid brand servicing fees amounting to ₹ 86,70,000/- to AT&T Communications Services India Private Limited ("AT&T") for using the brand "AT&T" for the Maharashtra and Gujarat Circles and the same was debited to Profit & Loss Account and claimed as revenue expenditure. AT&T Corporation - USA was one of the promoters of the assessee. The assessee was earlier known by the name "Birla AT& .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y for the purpose of the assessee s business. 16. We find that in all earlier years as mentioned above, the assessee paid brand service fees to AT&T and debited the same to Profit & Loss Account and claimed as revenue expenditure in the return of income. The claim was never disputed by the revenue in any earlier Assessment Years and the same was allowed. During the year under appeal, the assessee paid brand service fees to AT&T only for the month of April 2002 and after that the asse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

owance of brand servicing fee paid by the assessee insofar as findings recorded by the ld. CIT(A) had not been controverted by the ld. CIT - DR by bringing any positive materials on record. 18. The next grievance of the Revenue i.e. ground No. 5 relates to disallowance of interest for interest free loans advanced to subsidiaries. By the impugned order, the ld. CIT(A) deleted the disallowance of interest after having following observation:- 9. Ground No.9 is against disallowance of interest amoun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Article: SERVICES UNDER REVERSE CHARGE UNDER GST REGIME

Forum: Duty Drawback & Input Credit - under GST

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Credit on Repair of Company Car & Its Insurance

Highlight: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017 - Notification

Highlight: Companies (Acceptance of Deposits) Second Amendment Rules, 2017 - Notification

Highlight: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg. - Circular

Highlight: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 - Public Notice

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Circular: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20

Notification: Companies (Acceptance of Deposits) Second Amendment Rules, 2017

Notification: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017

Forum: Trans1 return

News: Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified

Circular: Promote the officers of the Indian Revenue Service (Customs and Central Excise) to the grade of Principal commissioner of customs, GST & CX

Circular: Allocate the charges amongst the Members of the Central Board of Excise and Customs

Circular: Strategy for audits in 2017-18 consequent to GST - Audit by Central Excise and service Department to continue for the accounting year 2016-17 and for the past period

Circular: Appoint the IRS (C&CE) officers as Principal Commissioner (Revision Application) and ex-officio Additional Secretary

Circular: Time limit for filing intimation for composition levy under Rule 3(1) of the CGST Rules, 2017 extended to 16-8-2017

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

Circular: C.B.E. & C. Advisory on Customs related matters on introduction of Goods and Services Tax regime

Circular: List of Reduced Tax Liabilities under GST regime in comparison to present combined Indirect Tax rates

Circular: Works Contract for construction of Flats, Complex — Builders to pass on GST benefit to buyer otherwise anti-profiteering provisions of Section 171 of GST Act to apply

Circular: Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rated supply for the purpose of Compensation Cess on exports – Regarding.

Circular: Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding

News: RBI Reference Rate for US $

Highlight: Addition u/s 23(1)(a) - deemed rent - once the property is let out and at any point of time this remained vacant during the same cannot be brought to tax under the head House properties income.

News: Haryana constitutes screening committee on anti-profiteering

Highlight: Valuation of imported goods - it is necessary to re-examine the matter of both license agreement as well as supply contract simultaneously, to see if the enhanced royalty was in the guise of adjustment of the price of components.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

Highlight: Cenvat credit availed on Club Membership for the Director is not admissible as it cannot be said to be remotely connected with the activity of manufacture

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Jaitley asks biz not to wait till last day to file GST returns

Circular: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg.

Article: 20 Things You must know about E Way Bills in GST Law

Article: ‘DUTY DRAWBACK’ CANNOT BE EQUATED WITH ‘REBATE OF DUTY’

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Constitution of National Anti-profiteering Authority (NAA) under GST-reg. - Trade Notice

Highlight: Amendments in Hand Book of Procedures 2015-20 –reg. - Various amendments are made in Chapter-4 of Hand Book of Procedures 2015-2020.

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version