Payment of interest and penalty due to default in payment of license fee is revenue expenditure

Bharti Airtel Ltd. Vs PCIT (ITAT Delhi)

ITAT Delhi held that interest and penalty due to default in payment of license fee is merely compensatory in nature and hence the same is revenue expenditure. Accordingly, PCIT classifying them to be capital expenditure is not sustainable.

Facts- The assessee is engaged in the business of providing cellular mobile telephone services and landline services and other associated value added services and internet service. The case of the assessee was selected for complete scrutiny assessment.

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