VODAFONE MOBILE SERVICES LTD. vs DEPUTY COMMISSIONER OF INCOME TAX

Judgment text excerpt

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment reserved on: March 04, 2025 Judgment pronounced on: March 11, 2025 + ITA 660/2018 VODAFONE MOBILE SERVICES LTD. .....Appellant Through: Mr. Sachit Jolly, Sr. Adv. with Ms. Soumya Singh, Ms. Disha Jham and Mr. Abhyudaya Shankar Bajpai, Advs. versus DEPUTY COMMISSIONER OF INCOME TAX .....Respondent Through: Mr. Indruj Singh Rai, SSC with Mr. Sanjeev Menon, Mr. Rahul Singh, JSCs with Mr. Anmol Jagg, Mr. Gaurav Kumar and Ms. Varsha Sharma, Advs. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR JUDGMENT YASHWANT VARMA, J. 1. The assessee as well as the Revenue seek to assail the correctness of the judgment dated 14 March 2018 rendered by the Income Tax Appellate Tribunal1 and in terms of which the two cross appeals of parties have come to be decided. We had in terms of our order of 23 January 2024 admitted these two appeals on the following questions of law: “ITA No. 660/2018 A. Whether on the facts and in the circumstances of the case and in law, the ITAT erred in upholding the disallowance of depreciation 1 Tribunal Signature Not Verified Digitally Signed ITA 660/2018 Page 1 of 70 By:KAMLESH KUMAR Signing Date:11.03.2025 16:21:28 to the tune of Rs.5,10,79,752/- claimed on account of Asset Reconstruction Cost [“ARC‟] being an ascertained liability, or alternatively allowing deduction for such expenditure in the year of execution of lease agreements or over the period of the lease? B. Whether on the facts and in the circumstances of the case and in law, the ITAT erred in holding that installation of cell site towers amounted to „extension of existing business‟ as stipulated in proviso to Section 36(1)(iii) of the Income Tax Act, 1961 [“Act”] and, thereby warranting proportionate