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Tax Publishers (1) Payment for equipment leasing--Whether taxable as royalty under Indo-Netherlands DTAA? *Facts and Held:* (1) Assessee had paid Rs. 1.32 crores to KLM of Netherlands for leasing of rotables and repair work. It was the case of the revenue that the same was subject to TDS under section 195 under Indo-Netherlands DTAA. Assessee's plea was amended Indo-Netherlands DTAA excluded equipment leasing from the scope of royalty under the DTAA which was accepted by the CIT(A). On higher appeal by the department - Held in favour of the Assessee that as per the DTAA amended clause excluded equipment leasing from the definition of royalty thus no TDS obligations arose. (2) FCCB--Foreign Currency convertible bond issue expenses--Spreading of expenditure thereof whether required? *Facts and Held:* (2) Assessee incurred expenditure for issuing FCCB and claimed the entire issue expense during the relevant assessment year. It was the case of the lower authorities that the same ought to have been spread over the tenure of FCCB of 5 years. On higher appeal CIT(A) went in favour of the assessee. On further appeal by the revenue - Held in favour of the assessee that FCCB expenses were revenue in nature. It is not necessary to spread over the same over the tenure of the FCCB. *Applied:* Taparia Tools Ltd. v. JCIT (2015) 372 ITR 605 (SC) : 2015 TaxPub(DT) 1438 (SC) (3) Deferred revenue expense in books but claimed upfront for tax purposes? *Facts and Held:* (3) Assessee incurred substantial expenditure for training its pilots and claimed the entire spend during the asst. year. In its books the same was spread over 5 years as deferred revenue expenditure. It was the case of the revenue that the same 5 year spread over be made even for tax purposes. On higher appeal by the revenue - Held in favour of the assessee that the scheme of entries in the books are not relevant for claiming revenue expenditure. The entire expenditure is thus allowable in the year of claim itself. *Case:* Spicejet Ltd. v. Addl. CIT 2023 TaxPub(DT) 145 (Del-Trib)

Tax Publishers

(1) Payment for equipment leasing--Whether taxable as royalty under Indo-Netherlands DTAA?

Facts and Held:

(1) Assessee had paid Rs. 1.32 crores to KLM of Netherlands for leasing of rotables and repair work. It was the case of the revenue that the same was subject to TDS under section 195 under Indo-Netherlands DTAA. Assessee's plea was amended Indo-Netherlands DTAA excluded equipment leasing from the scope of royalty under the DTAA which was accepted by the CIT(A). On higher appeal by the department - Held in favour of the Assessee that as per the DTAA amended clause excluded equipment leasing from the definition of royalty thus no TDS obligations arose.

(2) FCCB--Foreign Currency convertible bond issue expenses--Spreading of expenditure thereof whether required?

Facts and Held:

(2) Assessee incurred expenditure for issuing FCCB and claimed the entire issue expense during the relevant assessment year. It was the case of the lower authorities that the same ought to have been spread over the tenure of FCCB of 5 years. On higher appeal CIT(A) went in favour of the assessee. On further appeal by the revenue - Held in favour of the assessee that FCCB expenses were revenue in nature. It is not necessary to spread over the same over the tenure of the FCCB.

Applied: Taparia Tools Ltd. v. JCIT (2015) 372 ITR 605 (SC) : 2015 TaxPub(DT) 1438 (SC)

(3) Deferred revenue expense in books but claimed upfront for tax purposes?

Facts and Held:

(3) Assessee incurred substantial expenditure for training its pilots and claimed the entire spend during the asst. year. In its books the same was spread over 5 years as deferred revenue expenditure. It was the case of the revenue that the same 5 year spread over be made even for tax purposes. On higher appeal by the revenue - Held in favour of the assessee that the scheme of entries in the books are not relevant for claiming revenue expenditure. The entire expenditure is thus allowable in the year of claim itself.

Case: Spicejet Ltd. v. Addl. CIT 2023 TaxPub(DT) 145 (Del-Trib)