Delhi ITAT deletes Rs.
1558.57 cr. capital gains addition on Telenor India for AY 2014-15, holds that
set off of non-refundable entry fee paid by group co. (UW) to DoT in 2008,
against the fresh spectrum fee payable by assessee towards allocation of
telecom licenses cannot be regarded as 'transfer' u/s 2(47); Assessee and
Unitech Wireless (Tamilnadu) Pvt. Ltd (UW) are both part of the Norwegian based
Telenor group, assessee had acquired fresh telecom licenses for a spectrum fee
of Rs. 4018 cr. in November, 2012, and had requested DoT to consider the set
off of entry fee of Rs 1658.57 cr. already paid by UW in 2008 for grant of 22
unified access service licenses (‘UASL’), which were then quashed by SC;
Subsequently in December 2012, assessee acquired UW’s business on going concern
basis and entered into business transfer agreement (BTA) and Actionable Claim
Agreement whereby UW transferred all the rights, claims, other rights against
the DoT including the payment of license fee for consideration of Rs. 100 cr.;
Rejects Revenue’s stand that the right acquired by assessee under the
actionable claim agreement constituted a ‘capital asset’ u/s. 2(14) and that
the said right was exercised by assessee in March, 2014, being the date on
which the set off was allowed by DoT; Further rejects Revenue’s stand that
consequent to the set off, capital asset acquired by assessee was extinguished
and thus there was a ‘transfer’ u/s. 2(47) of a short term capital asset (being
held for a period less than 36 months); ITAT holds that 'right' which is not
enforceable by law, cannot be regarded as a 'capital asset', thus holds that
assessee had not acquired any capital asset from UW under the Actionable Claim
agreement since UW did not hold such asset at any point of time.:ITAT
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