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TMI Blog2017 (12) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... by this common order for the sake of convenience and brevity. 2. The revenue, in all the three present appeals, has raised common grounds of appeal except for the quantum of addition. 3. First we are taking up the appeal in ITA No. 5002/DEL/2014 for adjudication. Grounds raised in this appeal are as under: 1. On the facts and in the circumstances of the case the Ld CIT(A) has erred in deleting the addition of ₹ 1,26,58,244/- made by the Assessing Officer, without considering that the assessee has not withdrawn its claim for total deduction of the license fee. In the A.Y. 2006- 07, which is pending for adjudication before the Ld ITAT, and without giving a specific direction that the claim should be withdrawn m case the time is decided by the Ld IT AT in favour of the assessee in that year 2. The appellant craves to leave, to add, alter or amend any ground of appeal raised above at the time of the hearing. 3. The order of the Ld CIT(A), being contrary to the facts on record and the settled position of law, be set aside and that of the Assessing Officer be restored. 4. Brief facts of the case are that the assessee is engaged in the business of radio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the submissions made by the Id. AR. It is not in dispute that the appellant was entitled to claim license fee expenditure as actually paid under Phase-1 license regime on proportionate basis over the 10 year license fee term commencing from A.Y. 2004-05 as per section 35ABB of I.T. Act, as allowed by the AO vide assessment order for 2004-05. The issue for consideration therefore is the allowability of the remaining license fee expenditure of ₹ 12,65,82,440/- as paid during the A.Ys. 2004-05 and 2005-06 under Phase- I license regime. The appellant has claimed the above amount for deduction in full as revenue expenditure u/s 35ABB of the Act basing on the cutoff date of 01.04.2005 for migration to Phased! license regime. The AO has disallowed the same by treating it as a capital loss. On careful examination, I find that the migration of license from Phase-1 license regime to Phase-II license regime does not per-se amount to 'transfer' of license by the appellant as required under sub-section (2) of section 35ABB of I.T. Act in order to justify the appellant's claim for allowing the remaining entire license fee expenditure of ₹ 12,65,82,440/- under Phase- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t account. On exercising your option to automatic migration to Phase II, and payment of OTEF within prescribed period, you shall be required to sign a fresh Grant of Permission Agreement with Government on the same Terms and Conditions as for the successful Bidders of Phase II In other words, payment of license fee dues under Phase- I license regime was made a precondition by the Govt, in order to permit the appellant to migrate to Phase-II license regime. 5.8 In view of the above, the remaining expenditure on account of Fixed License Fee-as actually incurred by the appellant under Phase-1 license regime becomes part and parcel of all the payments as made in order to become eligible for Further, copy of letter dated 21.12.05 as issued by the Ministry of Information and Broadcasting to the appellant also clearly vide para- 4 specifies the amounts due and payable by the appellant under Phase-1, license fee regime and vide para 5 states as under: obtaining Phase-ll license. As OTEF (migration fee) of ₹ 22,22,52,219/- has been accepted by the AO to be allowed over the 10 year term of Phase-ll license under sub-section (1) of section 35ABB, on the same basis, I am of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 6. We have heard the rival submission and perused the facts of the case. At the outset, on perusal of the order of the ld. CIT(A), we do not find any infirmity in directing the Assessing Officer to allow 1/10th deduction at ₹ 1,26,58,244/- for the reasons mentioned in the well reasoned order reproduced hereinabove. Moreover, this issue is also covered by the decision of ITAT B Bench in assessee s own case vide order dated 24.11.2015 for assessment year 2006-07. The relevant finding of the ITAT is reproduced hereinbelow for ready reference: We have also carefully perused the reason given by CIT (A) for allowing the deduction of fees paid by assessee under PHASE -I over the remaining life of the license granted under PHASE-II of the regime. We do not find any infirmity in the finding as well as reasoning given by CIT (A) as in substances the reason canvassed by CIT (A) are similar to what we have propounded in our order. In view of this we confirm the order of CIT(A) in granting deduction of ₹ 1,26,58,244/- being 1/1Oth of ₹ 12,65,82,440/- being fees paid by assessee in Phase I as deductible expenditure u/s 35ABB(1) during the year under considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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