The Supreme Court dismissed a review petition, challenging the judgment wherein it was held that variable licence fee paid annually by telecommunication companies to DOT is capital expenditure.
The Supreme Court in C.I.T., DELHI vs BHARTI HEXACOM LTD CITATION: 2023 TAXSCAN (SC) 265, observed that “the licence issued under Section 4 of the Telegraph Act is a single licence to establish, maintain and operate telecommunication services. Since it is not a licence for divisible rights that conceive of divisible payments, apportionment of payment of the licence fee as partly capital and partly revenue expenditure is without any legal basis.”
Further it was held that the payment of the entry fee as well as the variable annual licence fee paid by the respondents-assessees’ to the DoT under the Policy of 1999 are capital in nature and may be amortised by Section 35ABB of the Act. The nature of payment being for the same purpose cannot have a different characterisation merely because of the change in the manner or measure of payment or for that matter the payment being made on an annual basis. The Court set aside the judgment of the Division Bench of the High Court of Delhi and connected matters.
The review petition arose out of the impugned final judgment and order dated 16-10-2023 in C.A. No.11128/2016 passed by the Supreme Court of India.
A Two-Judge Bench of Justice BV Nagarathna and Justice Ujjal Bhuyan observed that “Application for oral hearing is rejected. The Review Petition is dismissed in terms of the signed order.”
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