IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘A’: NEW DELHI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER &

SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No.4960 & 624/Del/2024 [Assessment Year: 2020-21 & 2021-22]

Bharti Telemedia Ltd. DCIT Bharti Crescent 1, Nelson Circle 4 (2) Mandela Road, Vasant Kunj, Vs New Delhi Phase-II, New Delhi-110070 PAN No.AADCB0147R Appellant Respondent ITA No.4966 & 4868/Del/2024 [Assessment Year: 2020-21 & 2016-17]

DCIT Bharti Telemedia Ltd.

Circle 4 (2) Bharti Crescent 1, Nelson New Delhi Vs Mandela Road, Vasant Kunj, Phase-II, New Delhi-110070 PAN No.AADCB0147R Appellant Respondent Appellant by Sh. Ajay Vohra, Sr. Advocate Sh. Rohit Jain, Advocate Sh. Deepesh Jain, Advocate Sh. Shivam Gupta, Advocate Respondent by Ms. Nimisha Singh, CIT DR Date of Hearing 18.09.2025 Date of Pronouncement 12.12.2025

ORDER

PER C.N. PRASAD, JM, All these appeals are filed by the assessee as well as revenue for the A.Ys 2016-17, 2020-21 and 2021-22 against different orders of the Ld. CIT(A)/NFAC, Delhi since all these appeals involve common issues, therefore, all of them were heard together and are disposed of by this common order for the sake of convenience.

2. First we take up the appeals for A.Y.2020-21 of assessee and revenue for A.Y. 2020-21 are also covers the issues in appeal of the assessee for the A.Y. 2021-22 in ITA No. 624/Del/2024 and Revenue’s appeal in ITA No. 4868/Del/2024 for the A.Y. 2016-17. The assessee and the revenue raised the following grounds of appeal for A.Y. 2020-21 : -

4960/Del/2024 A.Y. 2020-21 (Assessee’s appeal) 1) That the learned Commissioner of Income tax (Appeals)

["CIT (Appeals)"] erred on facts and in law in confirming the disallowance of variable license fee paid to Ministry of Information and Broadcasting (MIB) under section 35ABB of the Income Tax Act, 1961 ["Act"] which is applicable on companies providing telecommunication services while appellant is engage in providing Direct to Home (DTH)

services.

2) The appellant craves leave to add to, alter, amend, or vary the above grounds of appeal at or before the time of hearing.

4966/Del/2024 A.Y. 2020-21 (Revenue’s appeal)

1. Whether Ld. CIT(A) has erred in deleting the disallowance of provision for interest on outstanding license fee of Rs. 119,01,19,717/- for AY 2020-21 and mentioning it as ascertained liability. Rs. 404640704.

2. Without prejudice to the G.O.A. at S., No. 1 on provision for interest on outstanding license fee whether Ld. CIT(A) has grossly erred in considering interest on license fee (Provision) as 2 revenue expense even when the same has come into existence on the basis of license fee which has been considered to be a capital receipt by Hon'ble Supreme Court in the case of VIT vs Bharti Hexacom Ltd. (2023) 155 taxmann.com 322 (sc).

3. Whether Ld. CIT(A) has erred in upholding that the variable license fee paid by the assessee is deductible as revenue expenditure and thereby deleting the addition of Rs. 159,38,43,254/- without considering the fact that it is capital in nature and has to be amortized as per the provision of section 35ABB of the Act.

4. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.

3. The brief facts of the case are that the assessee had entered into a contract with the Ministry of Information and Broadcasting, Government of India ("MIB") for providing DTH services vide agreement dated 10.09.2007 (pages 168 to 182 of the paperbook) in terms of section 4 of the Indian Telegraph Act, 1885 ('the Telegraph Act') and Indian Wireless Telegraphy Act, 1933. In terms of the said licence agreement as clarified/ amended vide Order No. 8/12/2006-BP&L dated 6th November 2007 issued by MIB (pages 183 to 184 of the paperbook), the licencee (assessee) is required to pay licence fee; the terms related to such licence fee are as under:

"ARTICLE-3 "LICENCE FEE

3.1 The Licencee shall pay an initial non-refundable entry fee of Rs.10 crores b