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TMI Blog2015 (12) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... R, is in support to the addition by contending that relief was granted to the assessee without appreciating the fact that the expenditure incurred is of capital in nature, therefore, is inadmissible u/s 37(1) of the Income Tax Act, 1961. Reliance was also placed upon the decision in 221 taxman 323 (Del.) On the other hand, the ld. counsel for the assessee, Shri Ronak G. Doshi, defended the conclusion arrived at in the impugned order by placing reliance upon the decision in ACIT vs Fascel Ltd. 120 TTJ 289 (Del. Trib.) and Bharti Airtel Ltd. vs ACIT 41 SOT 175 (Mum. Trib.). 2.1. We have considered the rival submissions and perused the material available on record. Before coming to any conclusion, we are reproducing hereunder the relevant fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is incurred in relation to a capital asset. The law is well-settled that interest on borrowings whether for acquiring a capital asset or stock-in-trade is allowable as a deduction. In view of this, the interest payable on licence fee cannot be equated with that of a licence fee as contemplated by section 35ABB. Since section 35ABB is inapplicable in respect of interest payable for delay in payment of licence fee to operate telecommunication services, the claim for deduction by the assessee on accrual basis had to be allowed. The Commissioner (Appeals) was fully Justified in allowing the claim of the assessee" In view of the above decision of Hon'ble ITAT it is clear that interest payment relates to the business of the assessee and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pto July 1999 and new policy came into picture with effect from01/08/1999. The present licence fee is for financial year 2003-04, which is post July, 1999, therefore, the basic licence fee is allowable. It is also noted that for earlier year, even the Assessing Officer allowed the same as revenue expenditure. The allotment was under the old policy as is evident from page 10, schedule 13 (of the paper book). Rs. 4,43,611/- was allowed as revenue deduction and book entry was amortized as revenue fees. Even otherwise, the ratio laid down in CIT vs Bharti Hexacom Ltd. (2014) 221 taxman 323 (Del.) order dated 19/12/2013 supports the cse of the assessee, thus, we find no infirmity in the conclusion drawn by the ld. Commissioner of Income Tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese items at the same rate at which it is allowed to computers. The assessee's view finds support from various decisions of Hon'ble High Courts and Hon'ble ITAT as relied by the assessee and as reproduced above. Hon'ble Delhi High Court has held that UPS to be eligible for depreciation @ 60% in the case of Orient Ceramic and Industries Ltd. (supra). Hon'ble ITAT has found printers, scanners and servers as integral part of computer system and entitled for deduction @ 60% in the case of Omni Globe Information Technologies India Pvt. Ltd. (supra). Similar is the decision of Hon'ble ITA T in the case of Expeditors In International (India) Pvt. Ltd. (supra) and Datacraft (India) Ltd. (supra). Therefore, respectfully followin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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