TMI Blog2011 (3) TMI 1678X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal. 3. We have heard Senior Advocate Shri Dinesh Vyas on behalf of the assessee and Dr. B. Senthil Kumar, CIT-DR on behalf of the revenue. On carefully consideration of the facts and circumstances of the case and perusal of the paper book on record and the orders of the authorities below as well as case laws cited, we hold as follows. 4. We first take up assessee s appeal in ITA No. 3061/Mum/2003. First ground is on the issue of deduction u/s. 80IA in respect of Earth Stations. Shri Dinesh Vyas fairly pointed out that the issue is covered against the assessee in its own case which is reported in 299 ITR (AT) 234 (Mum)(SB) for A.Y. 1996-97. Respectfully following the same, we dismiss this ground of the assessee. 5. Ground No. 2 3 are on the issue of disallowance u/s. 43B. The assessee has made a provision for gratuity, based on actuarial valuation and the entire sum was paid to the gratuity trust, before the due date of filing of the return. On the ground that amount was not paid within the due date provided in the Gratuity Act, the Assessing Officer disallowed the amount u/s. 43B. As the undisputed fact is that the payment was made before the due date of filing of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d DR. 12. Hon'ble Gujarat High Court in the case of Saurashtra Cement Chemicals Industries Ltd. Vs. CIT, 213 ITR 523 held that merely because expenses relate to a transaction of an earlier year, it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallized in the year in question on the basis of maintaining accounts on mercantile basis. Hon'ble Calcutta High Court in the case of Sutna Stone and Lime Co. Vs. CIT, 192 ITR 478 (Cal), was dealing with a case where, the railways sent a bill which was received by the assessee in May 1997 and in such circumstances, it held that though charges pertain to a period of 1st November 1963 to 11th December 1973, deduction was admissible for A.Y.1996-97. Applying the proposition laid down in these case laws to the facts of the case we hold that such bills were received during the current financial year. The first Appellate Authority has rightly held that the expenditure crystallized during the year and hence was rightly claimed during the year. Thus, we dismiss ground No. 2,3 4 of the revenue. 13. Ground No. 5 is on the issue of depreciation on indefeasible righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt has placed reliance on the definition of the word ownership as per the Black s Law Dictionary (6 th Edition) as meaning, inter alia, a Collection of Rights to use and enjoy property, including right to transmit it to other The right of one or more persons to possess and use a thing to the exclusion of others. The right by which a thing belongs to someone in particular, to the exclusion of all other persons. The exclusion of possession, enjoyment and disposal, involving as an essential attribute the right to control, .and dispose. The appellant is undoubtedly the de facto owner of the capacity in the cable network purchased by it. The duration of the agreement is also long enough stretching to 25 years which infact is the total operational life span of the cables. The appellant also has right to transfer its share to others and also has the right to share the sale proceeds of decommissioning of the system in proportion to the rights held by it. In the light of all these facts, the appellant has to be treated as the owner of the indefeasible rights held by it in the consortium and thereby the appellant can be said to be the owner of the asset which is a depreciable natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer in treating this expenditure as being capital in nature and the disallowance made in this regard is hereby confirmed. However, the appellant s alternate request regarding grant of depreciation on this capital expenditure is reasonable and the Assessing Officer is directed to grant depreciation on the capitalized value of this expenditure. Hence, this ground of appeal is partly allowed. 19. The revenue disputes the direction for grant of depreciation. In our considered opinion, the findings of the first appellate authority call for no interference. The assessee has capitalised his foreign travel expenses on the asset i.e. undersea cables and he has entitled to depreciation on the same. In the result, ground No. 6 is dismissed. 20. Ground No. 7 is on the issue of amortization of leasehold land. Learned CIT(A) at page 11 brought out, the facts, findings of the Assessing Officer, as well as submissions of learned AR which are extracted for ready reference. Amortisation of leasehold land of Rs. 1,25,124/- has been claimed in the return. Such amortization is to all intents and purposes acquisition of the land in question. Therefore, this amount cannot be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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