Vodafone India Ltd. Vs ACIT (ITAT Mumbai)
The Income Tax Appellate Tribunal, Mumbai Bench, considered two appeals filed by Vodafone India Ltd. for Assessment Years 2006-07 and 2007-08. ITA No.216/Chandi/2011 concerned the assessment order dated 05/02/2011 for AY 2006-07, while ITA No.1173/Chandi/2011 concerned the order of the Commissioner of Income Tax (Appeals), Chandigarh dated 17/11/2011 for AY 2007-08. Since the grounds in both appeals arose from the same set of facts, the Tribunal adjudicated them together and dealt with the issues year-wise.
For AY 2006-07, the assessee challenged, among other matters, denial of deduction under Section 80IA of the Income Tax Act, 1961, treatment of “Other Incomes” for Section 80IA purposes, depreciation on Asset Retirement Cost (ARC), disallowance under Section 14A, interest on loans advanced to subsidiaries, interest on capital work-in-progress and External Commercial Borrowings (ECB), expenditure incurred for raising loans, roaming charges under Section 40(a)(ia), book-profit computation under Section 115JB, initiation of penalty under Section 271(1)(c), and interest under Sections 234B, 234C and 234D.
On the Section 80IA issue, the assessee relied upon the Tribunal’s decision in its own case for AY 2005-06. The Tribunal noted that the earlier order had held that the assessee commenced telecommunication services after 01/04/1995 and was consequently eligible for deduction under Section 80IA(4). The earlier Tribunal had also held that formation of the undertaking after merger/reconstruction did not prevent the deduction in view of CBDT Circular No.5 of 2005. Following its own earlier decision, the Tribunal allowed Ground No.1.
