DCIT, NEW DELHI vs. M/S. BHARTI TELEMEDIA LTD., NEW DELHI

Briefly stated facts are that the assessee company was incorporated on 30.11.2006, engaged in the business of setting up, operating and maintaining direct to home (DTH) services including digital and any other mode of interactive broadcasting service. For the AY 2010-11 they have filed their return of income declaring a loss of Rs. 3,75,55,40,000/- on 11.10.2010 and during the course of the assessment AO observed that an amount of Rs. 31,69,23,129/- was paid as license fee and spectrum charges claimed as expenditure on Revenue sharing basis. But since the claim of the assessee had been consistently disallowed in the previous assessment years in the case of other group companies and amortization has been done u/s 35ABB of the Act, the AO concluded that since the license was granted on 10.09.2007 for 10 years, only one and Ninth portion thereof i.e. Rs. 3,16,92,312/- was allowable as expenditure and the balance of Rs. 28,52,30,817/- was to be disallowed.

Appeal preferred by the assessee was allowed by the Ld. CIT (A) by way of the impugned order.

The Revenue is, therefore, in appeal before us stating that the Ld. CIT (A) has erred on facts and in law in deleting the addition of Rs. 28,52,30,817/- on amount of amortization of license fee and spectrum charges u/s 35ABB of the Act.

It is the argument of the Ld. DR that the AO noted the fact that the claim of the assessee had been consistently disallowed in previous assessment years in other group of companies and amortization has been done u/s 35ABB of the Act. He further submits that AO also considered the submission of the assessee that the similar issue was covered in other cases of group companies.

Per contra it is the submission of the Ld. AR that the issue had been dealt in batch matters of the group companies by a coordinate bench of this Tribunal and the Hon’ble High Court in confirmed the same. He prayed to dismiss the appeal.

We have carefully gone through the material papers on record and noted that in batch of cases of a coordinate bench of this Tribunal in the case of group companies held that the expenditure incurred towards license fee on Revenue sharing basis should be treated as Revenue expenditure. These findings of the Tribunal were upheld by the Hon’ble Jurisdictional High Court in ITA No. 493/Del/2014. So also while following the above decisions a coordinate bench of this Tribunal in ITA No. 6344/Del/2012 held that the expenditure incurred by the assessee on license fee and spectrum charges as Revenue expenditure. The principles laid down above are applicable to the facts of the case on all fours and in view of this settled position of law we find that the impugned order is perfectly legal and does not warrant any interference. We, therefore, uphold the same.

In the result, the appeal is dismissed.