Case Law Details
Vodafone Idea Limited Vs PCIT (ITAT Mumbai)
ITA allows depreciation @ 25% on spectrum fee and held that provisions contained under section 35ABB are not applicable to spectrum fee and it further held that PCIT cannot keep an issue alive on the pretext that the order passed by the Tribunal is not accepted by the Department.
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.
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.
we are of the considered view that the AO has allowed the depreciation @ 25% claimed by the assessee company on spectrum fees by treating the same as ‘intangible assets’ under section 32 of the Act by making a discreet enquiry and as such it is neither a case of non application of mind on the part of the AO nor a case of inadequate enquiry. Hence, invoking revisionary jurisdiction by the Ld. PCIT under section 263 of the Act is not sustainable in the eyes of law and the question No.I framed in the preceding para is answered in favour of the assessee, that the assessment order passed by the AO under section 143(3) of the Act allowing depreciation claimed by the assessee @ 25% on “spectrum fee” under section 32 of the Act was not erroneous in so far as prejudicial to the interest of revenue.
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