I run a telecom company and I have been claiming the annual revenue-share licence fee paid to the Department of Telecommunications as a business expense. The assessing officer says the Supreme Court has held it is capital and must go through section 35ABB. What did the Court actually decide?
It decided that the licence fee has one character throughout, and that the character is capital. The licensees had migrated from the telecom policy of 1994, under which the fee was fixed, to the policy of 1999, under which a one-time entry fee was payable, calculated as the licence fee dues up to 31 July 1999, and the fee thereafter was a share of gross revenue. The Delhi High Court had split the payment on that date, treating the fee up to 31 July 1999 as capital, qualifying for deduction under section 35ABB, and the revenue-share fee after 1 August 1999 as revenue. The Supreme Court framed the question as whether the variable annual licence fee paid to the Department of Telecommunications under the policy of 1999 is revenue in nature and deductible under section 37, or capital and accordingly required to be amortised under section 35ABB. It answered that the later payment is a continuation of the earlier one in an altered format, that the change of format does not take away the essence of the payment, that it is a mandatory payment traceable to the licence agreement and non-payment would put the licensee out of the trade, and that such a payment has to be treated or characterised as capital only. The date of 31 July 1999 therefore marks a change in how the fee is measured, not a change in what it is.
Decided by the Supreme Court (Supreme Court of India - B.V. Nagarathna and Ujjal Bhuyan JJ) on 2023-10-16, reported as [2023] 458 ITR 593 (SC). It bears on section 35ABB, section 35ABA, section 37(1), section 52 (Act of 2025) of the Income Tax Act 1961, in Deductions & Disallowances and How Tax Law Is Read matters.
The money in this decision is all in the timing. A revenue-share fee claimed in full in the year it is paid and the same fee amortised from that year to the expiry of the licence come to the same total and land in entirely different years, and for a licence with a long tail the deferral is most of the amount. That is why assessments went back years and why the work in a telecom file is the restatement rather than the principle. The wider point is the test the Court used, and it will be put to businesses that have never held a telecom licence. The Court did not ask whether an asset of enduring benefit came into existence. It asked whether the payment is traceable to the document that lets you trade and whether stopping the payment would put you out of the trade, and it held that a payment answering that description is capital however it is measured and however often it is made. Expect that argument wherever a recurring fee is the condition of keeping a licence, a concession, an approval or a franchise. Two mistakes are made with this case in about equal numbers. The first is to read it as holding that licence fee is capital and stop there, which misses that the decision is a refusal to apportion - the Court would not let the fee have one character before a date and another after it. The second is to read it as preserving a revenue deduction for the annual revenue share, which is the opposite of what it held. Neither reading survives paragraph 27.
Binding on every court and authority in India.
Read aloud by your device. Press again to stop.
The respondent operators held licences to provide telecommunication services granted under the national telecom policy of 1994, on which the fee payable was fixed. Under the policy of 1999 the licensees were offered a migration package, described in the proceedings as a one-time entry fee chargeable and calculated as the licence fee dues payable up to 31 July 1999, with licence fee thereafter payable on a percentage share of gross revenue. The licensees migrated. In their assessments they claimed the annual revenue-share fee as revenue expenditure deductible under section 37, while accepting that the entry fee was capital. The Revenue said the whole of it was capital and had to be amortised under section 35ABB, which allows capital expenditure incurred for acquiring a right to operate telecommunication services to be written off in equal fractions over the relevant previous years. The Delhi High Court, by a Division Bench judgment of 19 December 2013 in ITA No. 1336 of 2010 and connected matters, divided the expenditure at the migration date: licence fee payable up to 31 July 1999 was to be treated as capital expenditure qualifying for deduction under section 35ABB, and licence fee on a revenue-sharing basis after 1 August 1999 was to be treated as revenue expenditure. The High Courts of Delhi, Bombay and Karnataka followed that judgment in later matters. The appeals came to the Supreme Court in Civil Appeal No. 11128 of 2016 and a batch of connected appeals.
The Court framed the question as whether the variable annual licence fee paid by the assessees to the Department of Telecommunications under the policy of 1999 is revenue in nature and to be allowed deduction under section 37 of the Act, or is capital in nature and accordingly required to be amortised under section 35ABB. It answered that the payment is capital. Its reasoning on the migration date is in paragraph 27: "Therefore, in the ultimate analysis, the nomenclature and the manner of payment is irrelevant. The payment post 31 July, 1999 is a continuation of the payment pre 31 July, 1999 albeit in an altered format which does not take away the essence of the payment. It is a mandatory payment traceable to the foundational document i.e., the licence agreement as modified post migration to the 1999 policy. Consequence of non-payment would result in ouster of the licensee from the trade. Thus, this is a payment which is intrinsic to the existence of the licence as well as trade itself. Such a payment has to be treated or characterized as capital only." The apportionment made by the Delhi High Court was therefore rejected, and the judgment of 19 December 2013, together with the judgments of the High Courts of Delhi, Bombay and Karnataka that had followed it, no longer stands; later High Court and Tribunal decisions have proceeded on that footing. The concluding paragraphs of the judgment could not be read on any copy reached, so the Court's own words of disposal are not set out on this page. What the decision settles is the character of the fee and the provision it goes to; the arithmetic of the spread is left where section 35ABB puts it.
The competing descriptions were both plausible, which is why the case took as long as it did. On the assessees' side, a payment measured as a share of the revenue you earn, payable every year for as long as you trade, looks exactly like a running cost of the business - closer to rent than to the price of an asset. On the Revenue's side, the payment buys the right to be in the business at all, and a right to trade is not a running cost. The Court's answer works from the origin of the obligation rather than from its shape. The payment after migration is traceable to the same foundational document as the payment before it, namely the licence agreement as modified on migration to the policy of 1999. Nothing new was bought on 1 August 1999. What changed was how much was payable and how the amount was arrived at. From that the Court drew the step the decision turns on: the nomenclature and the manner of payment are irrelevant, and a payment that is a continuation of an earlier payment in an altered format does not change its essence because the format changed. So the measure moving from a fixed sum to a share of gross revenue tells you nothing about character. The test it then applied is a practical one and it is the part worth carrying away. Non-payment would result in ouster of the licensee from the trade. A payment you must keep making to stay in the business at all is intrinsic to the existence of the licence and to the trade itself, and such a payment has to be characterised as capital only. That is not an inquiry into whether an asset of enduring benefit came into existence; it is an inquiry into whether the payment is the price of the right to trade. The consequence for the two competing provisions follows without argument. Section 37(1) allows only expenditure not being of the nature described in sections 30 to 36 and not being in the nature of capital expenditure. Once the fee is capital, the second limb closes section 37(1) on its own. Section 35ABB is the special provision written for capital expenditure incurred to obtain a licence to operate telecommunication services, and the expenditure goes there. Section 35ABA does the same job for the spectrum fee from assessment year 2017-18. What the Court did not do is rework the timing. Section 35ABB fixes the years by reference to when each payment is actually made and when the licence expires, and the judgment sends the expenditure to that section rather than substituting a schedule of its own.
The payment post 31 July, 1999 is a continuation of the payment pre 31 July, 1999 albeit in an altered format which does not take away the essence of the payment. It is a mandatory payment traceable to the foundational document i.e., the licence agreement as modified post migration to the 1999 policy. Consequence of non-payment would result in ouster of the licensee from the trade. Thus, this is a payment which is intrinsic to the existence of the licence as well as trade itself. Such a payment has to be treated or characterized as capital only.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppIt decided that the licence fee has one character throughout, and that the character is capital. The licensees had migrated from the telecom policy of 1994, under which the fee was fixed, to the policy of 1999, under which a one-time entry fee was payable, calculated as the licence fee dues up to 31 July 1999, and the fee thereafter was a share of gross revenue. The Delhi High Court had split the payment on that date, treating the fee up to 31 July 1999 as capital, qualifying for deduction under section 35ABB, and the revenue-share fee after 1 August 1999 as revenue. The Supreme Court framed the question as whether the variable annual licence fee paid to the Department of Telecommunications under the policy of 1999 is revenue in nature and deductible under section 37, or capital and accordingly required to be amortised under section 35ABB. It answered that the later payment is a continuation of the earlier one in an altered format, that the change of format does not take away the essence of the payment, that it is a mandatory payment traceable to the licence agreement and non-payment would put the licensee out of the trade, and that such a payment has to be treated or characterised as capital only. The date of 31 July 1999 therefore marks a change in how the fee is measured, not a change in what it is. This was decided by the Supreme Court (Supreme Court of India - B.V. Nagarathna and Ujjal Bhuyan JJ) and bears on section 35ABB, section 35ABA, section 37(1), section 52 (Act of 2025) of the Income Tax Act 1961. It is reported as [2023] 458 ITR 593 (SC). The money in this decision is all in the timing. A revenue-share fee claimed in full in the year it is paid and the same fee amortised from that year to the expiry of the licence come to the same total and land in entirely different years, and for a licence with a long tail the deferral is most of the amount. That is why assessments went back years and why the work in a telecom file is the restatement rather than the principle. The wider point is the test the Court used, and it will be put to businesses that have never held a telecom licence. The Court did not ask whether an asset of enduring benefit came into existence. It asked whether the payment is traceable to the document that lets you trade and whether stopping the payment would put you out of the trade, and it held that a payment answering that description is capital however it is measured and however often it is made. Expect that argument wherever a recurring fee is the condition of keeping a licence, a concession, an approval or a franchise. Two mistakes are made with this case in about equal numbers. The first is to read it as holding that licence fee is capital and stop there, which misses that the decision is a refusal to apportion - the Court would not let the fee have one character before a date and another after it. The second is to read it as preserving a revenue deduction for the annual revenue share, which is the opposite of what it held. Neither reading survives paragraph 27. If it applies to you, the first step is this: Stop sorting the payments by date and start sorting them by the year each was actually paid. The character is the same either side of 31 July 1999; what decides the schedule is when the money went out and when the licence expires.
The respondent operators held licences to provide telecommunication services granted under the national telecom policy of 1994, on which the fee payable was fixed. Under the policy of 1999 the licensees were offered a migration package, described in the proceedings as a one-time entry fee chargeable and calculated as the licence fee dues payable up to 31 July 1999, with licence fee thereafter payable on a percentage share of gross revenue. The licensees migrated. In their assessments they claimed the annual revenue-share fee as revenue expenditure deductible under section 37, while accepting that the entry fee was capital. The Revenue said the whole of it was capital and had to be amortised under section 35ABB, which allows capital expenditure incurred for acquiring a right to operate telecommunication services to be written off in equal fractions over the relevant previous years. The Delhi High Court, by a Division Bench judgment of 19 December 2013 in ITA No. 1336 of 2010 and connected matters, divided the expenditure at the migration date: licence fee payable up to 31 July 1999 was to be treated as capital expenditure qualifying for deduction under section 35ABB, and licence fee on a revenue-sharing basis after 1 August 1999 was to be treated as revenue expenditure. The High Courts of Delhi, Bombay and Karnataka followed that judgment in later matters. The appeals came to the Supreme Court in Civil Appeal No. 11128 of 2016 and a batch of connected appeals. The matter was decided on 2023-10-16 by the Supreme Court (Supreme Court of India - B.V. Nagarathna and Ujjal Bhuyan JJ). On those facts the Supreme Court held as follows. The Court framed the question as whether the variable annual licence fee paid by the assessees to the Department of Telecommunications under the policy of 1999 is revenue in nature and to be allowed deduction under section 37 of the Act, or is capital in nature and accordingly required to be amortised under section 35ABB. It answered that the payment is capital. Its reasoning on the migration date is in paragraph 27: "Therefore, in the ultimate analysis, the nomenclature and the manner of payment is irrelevant. The payment post 31 July, 1999 is a continuation of the payment pre 31 July, 1999 albeit in an altered format which does not take away the essence of the payment. It is a mandatory payment traceable to the foundational document i.e., the licence agreement as modified post migration to the 1999 policy. Consequence of non-payment would result in ouster of the licensee from the trade. Thus, this is a payment which is intrinsic to the existence of the licence as well as trade itself. Such a payment has to be treated or characterized as capital only." The apportionment made by the Delhi High Court was therefore rejected, and the judgment of 19 December 2013, together with the judgments of the High Courts of Delhi, Bombay and Karnataka that had followed it, no longer stands; later High Court and Tribunal decisions have proceeded on that footing. The concluding paragraphs of the judgment could not be read on any copy reached, so the Court's own words of disposal are not set out on this page. What the decision settles is the character of the fee and the provision it goes to; the arithmetic of the spread is left where section 35ABB puts it.
The competing descriptions were both plausible, which is why the case took as long as it did. On the assessees' side, a payment measured as a share of the revenue you earn, payable every year for as long as you trade, looks exactly like a running cost of the business - closer to rent than to the price of an asset. On the Revenue's side, the payment buys the right to be in the business at all, and a right to trade is not a running cost. The Court's answer works from the origin of the obligation rather than from its shape. The payment after migration is traceable to the same foundational document as the payment before it, namely the licence agreement as modified on migration to the policy of 1999. Nothing new was bought on 1 August 1999. What changed was how much was payable and how the amount was arrived at. From that the Court drew the step the decision turns on: the nomenclature and the manner of payment are irrelevant, and a payment that is a continuation of an earlier payment in an altered format does not change its essence because the format changed. So the measure moving from a fixed sum to a share of gross revenue tells you nothing about character. The test it then applied is a practical one and it is the part worth carrying away. Non-payment would result in ouster of the licensee from the trade. A payment you must keep making to stay in the business at all is intrinsic to the existence of the licence and to the trade itself, and such a payment has to be characterised as capital only. That is not an inquiry into whether an asset of enduring benefit came into existence; it is an inquiry into whether the payment is the price of the right to trade. The consequence for the two competing provisions follows without argument. Section 37(1) allows only expenditure not being of the nature described in sections 30 to 36 and not being in the nature of capital expenditure. Once the fee is capital, the second limb closes section 37(1) on its own. Section 35ABB is the special provision written for capital expenditure incurred to obtain a licence to operate telecommunication services, and the expenditure goes there. Section 35ABA does the same job for the spectrum fee from assessment year 2017-18. What the Court did not do is rework the timing. Section 35ABB fixes the years by reference to when each payment is actually made and when the licence expires, and the judgment sends the expenditure to that section rather than substituting a schedule of its own. In the words reproduced by the source cited on this page: "The payment post 31 July, 1999 is a continuation of the payment pre 31 July, 1999 albeit in an altered format which does not take away the essence of the payment. It is a mandatory payment traceable to the foundational document i.e., the licence agreement as modified post migration to the 1999 policy. Consequence of non-payment would result in ouster of the licensee from the trade. Thus, this is a payment which is intrinsic to the existence of the licence as well as trade itself. Such a payment has to be treated or characterized as capital only."
It was decided by the Supreme Court on 2023-10-16 and is reported as [2023] 458 ITR 593 (SC). Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 35ABB, section 35ABA, section 37(1), section 52 (Act of 2025), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The Court framed the question as whether the variable annual licence fee paid by the assessees to the Department of Telecommunications under the policy of 1999 is revenue in nature and to be allowed deduction under section 37 of the Act, or is capital in nature and accordingly required to be amortised under section 35ABB. It answered that the payment is capital. Its reasoning on the migration date is in paragraph 27: "Therefore, in the ultimate analysis, the nomenclature and the manner of payment is irrelevant. The payment post 31 July, 1999 is a continuation of the payment pre 31 July, 1999 albeit in an altered format which does not take away the essence of the payment. It is a mandatory payment traceable to the foundational document i.e., the licence agreement as modified post migration to the 1999 policy. Consequence of non-payment would result in ouster of the licensee from the trade. Thus, this is a payment which is intrinsic to the existence of the licence as well as trade itself. Such a payment has to be treated or characterized as capital only." The apportionment made by the Delhi High Court was therefore rejected, and the judgment of 19 December 2013, together with the judgments of the High Courts of Delhi, Bombay and Karnataka that had followed it, no longer stands; later High Court and Tribunal decisions have proceeded on that footing. The concluding paragraphs of the judgment could not be read on any copy reached, so the Court's own words of disposal are not set out on this page. What the decision settles is the character of the fee and the provision it goes to; the arithmetic of the spread is left where section 35ABB puts it. It arises in Deductions & Disallowances and How Tax Law Is Read matters, on section 35ABB, section 35ABA, section 37(1), section 52 (Act of 2025) of the Income Tax Act 1961, and was decided by Supreme Court of India - B.V. Nagarathna and Ujjal Bhuyan JJ. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Build a separate schedule for each payment. Section 35ABB spreads each tranche from the year it is actually paid to the year the licence is in force, so the later the payment the shorter the run and the larger the annual fraction. Check each schedule by adding its instalments back to the payment. If they do not come to the payment, the count of relevant previous years is wrong. Where you have been claiming the revenue share in full, restate rather than write it off. The deduction is deferred, not lost, and the unallowed balance keeps running against later years. Keep section 37(1) out of the argument once the fee is accepted as capital. That provision reaches only expenditure not of the nature described in sections 30 to 36 and not being capital in nature, and it fails on the second limb by itself. Take limitation year by year where earlier assessments are being reopened or rectified to give effect to this decision. A year that is out of time does not come back merely because the point is now settled. For spectrum, look at section 35ABA rather than this judgment. It was inserted with effect from 1 April 2017 and it carries its own rule about what counts as paid where the Department of Telecommunications has allowed deferred payment. For tax years from 2026-27, read section 52 of the Income-tax Act, 2025 alongside the old sections and check how a schedule that began under the 1961 Act carries forward.
The judgment itself could not be reached, so no check was possible. This status is about the document, not about the law. The decision is a 2023 judgment of the Supreme Court, it is applied every week in the Tribunal, and its result is not in doubt. What could not be done was read the judgment to its end. Several separate copies were opened - the Court's own published file, the copy in the general case-law index and two further mirrors. Each stops at a different point and none reaches the concluding paragraphs, which is what a length limit looks like rather than anything missing from the judgment. The full-text index over the same copy confirms the position from the other side: it returns the passages of the judgment that exist, including passages well past the point at which the page views stop, and it returns nothing at all for the words of the disposal. So the Court's concluding sentence of holding, and its operative order, are not set out on this page. One Tribunal order, at Mumbai, reproduces the closing paragraph, and it gives its effect as setting aside the Delhi High Court's judgment of 19 December 2013 and the judgments of the High Courts of Delhi, Bombay and Karnataka that had followed it. That is the substance stated everywhere else as well. But it is a single document, and where a form of words rests on one document this library states the substance and leaves the words alone. What is corroborated stands on its own footing. Paragraph 27, quoted in full on this page, was reproduced word for word by the Delhi High Court on 23 January 2024 in ITA 660/2018 and ITA 634/2019, and again by the Tribunal at Mumbai in 2025. Those are courts and tribunals, not publishers, and that is the reason the passage is quoted here while the disposal is not. What is settled beyond argument is that the apportionment at 31 July 1999 did not survive, that the fee is capital and goes to section 35ABB, and that the High Court decisions the other way no longer stand. Every later High Court and Tribunal decision that could be read proceeds on that footing. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
This record was built under an unusual constraint and the constraint has shaped what it says. The Supreme Court's judgment could not be read to its end. Four copies were opened - the Court's own published file, the copy in the general case-law index, and two further mirrors - and each stops short of the concluding paragraphs, at a different place in the text. The full-text index over the same copy was then used from the other direction, and it gives the same answer: it returns the passages of the judgment that exist, including passages well past the point at which the page views stop, and it returns nothing for the words of the disposal. So the position is not that the concluding paragraphs are missing from the judgment; it is that no copy that could be reached carries them. The search for a court reproducing them was then run in both directions - through the decisions citing this judgment, of which there are well over a hundred, and by phrase across the whole index. Exactly one document carries the closing paragraph: an order of the Tribunal at Mumbai of 24 July 2025, which the index holds twice under two case names, so it is one order and not two. Its reproduction sets aside the Delhi High Court's judgment of 19 December 2013 and the judgments of the High Courts of Delhi, Bombay and Karnataka that followed it, which is the substance stated on this page. A form of words resting on a single document is not a corroborated text, so no disposal is quoted here and no paragraph number is given for one. What is quoted is paragraph 27, and it is quoted because a court reproduced it. The Delhi High Court set it out word for word on 23 January 2024 in ITA 660/2018 and ITA 634/2019, and the text on this page is that reproduction, which is why the quotation is sourced to the High Court's judgment rather than to a copy of the Supreme Court's. The same paragraph, in the same words, appears in the Mumbai Tribunal's order of 2025, so the passage rests on two bodies and not one. The Delhi High Court judgment of 19 December 2013 that was under appeal, and its apportionment at 31 July 1999, were read on their own page and checked against the Supreme Court's description of them. One caution for anyone citing it. Quote paragraph 27 and describe the rest. A submission that puts the Court's disposal in quotation marks, on the strength of one Tribunal order, is taking a risk that does not need taking, because the substance can be stated without quoting anything and is not disputed by anyone. The concluding part of the judgment could not be read. The copies opened - the Court's own published file, the copy in the general case-law index and two further mirrors - each stop before the concluding paragraphs, at different points. So this page does not quote the Court's concluding sentence of holding, the sentence dealing with the High Court's apportionment, or the operative order, and it gives no paragraph number for any of them. The substance of all three is beyond argument: the apportionment was rejected, the fee is capital, the decisions below no longer stand, and every later court has proceeded on that basis. The words are a different matter. A Tribunal order at Mumbai reproduces the closing paragraph, and no second court reproducing it could be found, so its wording is not repeated here as the Court's own. The passage that is quoted, paragraph 27, is reproduced word for word by the Delhi High Court and is safe to use. Nothing else on this page is offered as the Court's language. Other things that could not be established. The neutral citation assigned to the judgment was not seen on any copy read and is therefore not given. The full list of the connected appeals, the assessment years, the amounts in dispute in each appeal, and the dates and numbers of the Bombay and Karnataka High Court judgments that followed the Delhi judgment of 19 December 2013 are not set out here. Whether a review petition was dismissed, and whether the Court in any later order in the same batch restricted or waived interest on the resulting demands, are both widely reported but were not verified against any order, so nothing on this page depends on either. The judgment decides the character of the licence fee under the policy of 1999 and the provision it goes to. It does not decide how a licence acquired before 1 April 1998 interacts with the intangible-assets limb of section 32(1), it does not decide how spectrum acquired before section 35ABA took effect on 1 April 2017 is to be treated, and it does not decide how a schedule begun under section 35ABB carries into section 52 of the Income-tax Act, 2025, which covers the licence fee and the spectrum fee together. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Court framed the question as whether the variable annual licence fee paid by the assessees to the Department of Telecommunications under the policy of 1999 is revenue in nature and to be allowed deduction under section 37 of the Act, or is capital in nature and accordingly required to be amortised under section 35ABB. It answered that the payment is capital. Its reasoning on the migration date is in paragraph 27: "Therefore, in the ultimate analysis, the nomenclature and the manner of payment is irrelevant. The payment post 31 July, 1999 is a continuation of the payment pre 31 July, 1999 albeit in an altered format which does not take away the essence of the payment. It is a mandatory payment traceable to the foundational document i.e., the licence agreement as modified post migration to the 1999 policy. Consequence of non-payment would result in ouster of the licensee from the trade. Thus, this is a payment which is intrinsic to the existence of the licence as well as trade itself. Such a payment has to be treated or characterized as capital only." The apportionment made by the Delhi High Court was therefore rejected, and the judgment of 19 December 2013, together with the judgments of the High Courts of Delhi, Bombay and Karnataka that had followed it, no longer stands; later High Court and Tribunal decisions have proceeded on that footing. The concluding paragraphs of the judgment could not be read on any copy reached, so the Court's own words of disposal are not set out on this page. What the decision settles is the character of the fee and the provision it goes to; the arithmetic of the spread is left where section 35ABB puts it.
TaxSphere, “CIT v Bharti Hexacom Ltd”, https://taxnotice.vittsphere.com/caselaw/case/cit-v-bharti-hexacom-the-telecom-licence-fee-has-one-character-and-it-is-capital/ (validity last checked 2026-09-23)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
I paid a foreign firm a lump sum for technical know-how that raised the yield of a product I was already making. The Assessing Officer says section 37(1) is shut because I bought an asset of enduring benefit. Is the payment capital?
Can a pharmaceutical company deduct the cost of gifts given to doctors?
I pay an annual fee to keep competitors out of my area. It recurs every year, so is it revenue expenditure?
My employee embezzled money from the business bank account. Can I write that off for tax?
