|The Tax Publishers2020 TaxPub(DT) 4678 (Mum-Trib)
INCOME TAX ACT, 1961
Section 263 read with Sections 32(1) & 32ABB
Detailed enquiry and examination was made by AO as regards additions made to fixed assets in relation to acquisition of right to use 3G spectrum on which depreciation was allowed under section 32(1)(ii) after examining in-depth the amortization of spectrum fee under section 32ABB order passed under section 263 was thus quashed.
Revision under section 263 - Erroneous and prejudicial order - Depreciation/amortization of 3G spectrum right - Insufficient enquiry/verification by AO
In its return of income, assessee had claimed depreciation amounting to INR 4,47,13,85,156 under section 32(1)(ii) on the right to use 3G spectrum by treating it as an intangible asset. Regarding invocation of powers under section 263 with respect to claim of depreciation on the spectrum fees and allowability of depreciation under section 32(1)(ii), the assessee had acquired the right to use 3G spectrum for providing telecommunication services and the same was installed and put to use during the financial year relevant to subject assessment year. Disclosure relating to acquisition of the asset and amortization/ depreciation claim were made by the assessee. Held: Basis the disclosure made in the financial statement and tax audit report, the AO had made specific enquiries during the course of the assessment proceedings and requisite responses were filed from the record, Tribunal found that during the course of the original assessment proceedings, the AO after perusing the basic data available in the Annual Accounts and the Tax Audit Report and after specifically calling for details / particulars from the assessee and after examining the issue, had allowed the claim of the assessee vis-Ã -vis granting of depreciation on the cost of acquisition of the 3G Spectrum. Submissions dated 25-2-2015 and 27-3-2015 were filed by assessee wherein details regarding acquisition of right to use 3G spectrum, the cost of such acquisition, additions made in the books of account, break-up of the cost for tax purposes, claim of depreciation under section 32(1)(ii), copy of the 3G spectrum and BWA spectrum license, relevant approvals from DOT, etc., were furnished during the course of the original assessment proceedings on the specific directions of the AO. The AO had specifically enquired about the working of addition to spectrum fees duly supported by evidence, as also, amortization of the spectrum fees. It is not understood as to how can it be the case of the Revenue that the AO while examining the issue and allowing the claim of depreciation vis-Ã -vis the amount in the question had not examined the provisions of section 35ABB. It can be concluded that the invocation of powers under section 263 by the PCIT was incorrect and hence, the impugned order passed under section 263 ought to be struck down.
Relied:Gabriel India Limited, (1993) 203 ITR 108 (Bombay H.C.) : 1993 TaxPub(DT) 1357 (Bom-HC) and Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC).
REFERRED : CIT v. AmritlalBhogilal& Co. (1958) 34 ITR 130 (SC) : 1958 TaxPub(DT) 184 (SC), CIT v. Annapoornamma Chandershekhar (2012) 17 Taxman. Com 120 (Karn-HC), CIT v. Nirav Modi, (2016) 390 ITR 292 (Bom-HC) : 2016 TaxPub(DT) 3506 (Bom-HC), CIT v. Max India Ltd. (2007) 295 ITR 282 (SC) : 2007 TaxPub(DT) 1548 (SC), Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC), CIT v. AmritlalBhogilal& Co. (1958) 34 ITR 130 (SC) : 1958 TaxPub(DT) 184 (SC), CIT v. Annapoornamma Chandershekhar (2012) 17 Taxman. Com 120 (Karn-HC), Idea Cellular Limited (ITA No. 360/Mum/2016) dated 6-12-2017 : 2017 TaxPub(DT) 5349 (Mum-Trib), Aircel Cellular Ltd. v. UOI & Ors. 2016, 6 MLJ 433 and Britania Industries Ltd. (2005) 278 ITR 546 (SC) : 2005 TaxPub(DT) 1850 (SC).
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