Relief to Vodafone Idea: ITAT allows Depreciation on Spectrum Fee [Read Order]
![Relief to Vodafone Idea: ITAT allows Depreciation on Spectrum Fee [Read Order]](https://www.taxscan.in/wp-content/uploads/2022/01/Relief-Vodafone-Idea-ITAT-Spectrum-Fee-taxscan.jpg "Relief to Vodafone Idea: ITAT allows Depreciation on Spectrum Fee [Read Order]")
The Income Tax Appellate Tribunal (ITAT), Mumbai bench has allowed relief to Vodafone Idea and held that the depreciation under section 32 of the Income Tax Act, 1961 shall be allowable for payment of spectrum fee. The company amortized amount spent on acquiring 3G spectrum and claimed 1/20th of the expenditure for the year as fee paid for spectrum. However, for the income tax purposes...
The Income Tax Appellate Tribunal (ITAT), Mumbai bench has allowed relief to Vodafone Idea and held that the depreciation under section 32 of the Income Tax Act, 1961 shall be allowable for payment of spectrum fee.
The company amortized amount spent on acquiring 3G spectrum and claimed 1/20th of the expenditure for the year as fee paid for spectrum. However, for the income tax purposes the assessee company capitalized the item and claimed depreciation @ 25% treating the spectrum as an ‘intangible asset’.
The Tribunal bench comprising Accountant Member Mr. Amarjith Singh and Judicial Member Mr. Kuldip Singh held that “since the issue as to the allowability of depreciation on spectrum fee as claimed by the assessee under section 32 of the Act and the provisions contained under section 35ABB are not applicable has already been decided in favour of the assessee by the Tribunal, the order of the Tribunal cannot be allowed to be disobeyed by Ld. PCIT merely on the pretext that the department has not accepted the said decision and appeal has already been filed before the Hon’ble High Court. In order to maintain judicial discipline Ld. PCIT had no option but to follow the order.”
Allowing the plea of the assessee, the Tribunal held that “following the order passed by the co-ordinate Bench of the Tribunal, we are of the considered view that even on merits the assessee’s claim for depreciation on “spectrum fee” is allowable under section 32 of the Act as the provisions contained under section 35ABB of the Act being not applicable to the issue at hand. Hence, the order passed by the AO is not erroneous. So we are of the considered view that the AO has rightly allowed the claim by virtue of the assessment order framed under section 143 of the Act. So the question No.II framed is also decided in favour of the assessee and against the Revenue.”
To Read the full text of the Order CLICK HERE
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