2016 (11) TMI 1702 - HC - Income Tax

Nature of expenditure - whether the payments made were capital or revenue in nature? - assessee had urged that in the light of the National Telecom Policy 1999 the payments - made on quarterly basis were not capital- that is for depreciation under Section 32 but entitled to be treated as revenue expenditure - HELD THAT - CIT (A) and ITAT accepted the assessee s contention and directed that the expenditure should be treated as falling under revenue fee by relying upon Commissioner of Income Tax vs. Fascel Limited 2008 (12) TMI 743 - DELHI HIGH COURT . There is also a subsequent judgment Commissioner of Income Tax vs. Bharti Hexacom Ltd 2013 (12) TMI 1115 - DELHI HIGH COURT in which it was held that such payments are in fact revenue and cannot be treated as capital expenditure. This court is of the opinion that having regard to Bharti Hexacom Ltd (supra) the question of law urged does not arise. No other substantial questions of law have been pleaded.

Summary

The Delhi High Court dismissed the appeal regarding whether certain payments were capital or revenue in nature. The court cited previous judgments and held that the payments should be treated as falling under revenue expenditure, not capital expenditure. The appeal was dismissed as no substantial questions of law were raised.