License fees paid to government whether allowable?
This query is : Resolved
16 February 2013
Can any one tell me case in support of this
License fees paid to government under an act by a fully owned government company is allowable as revenue expenditure.
License fees paid to government under an act by a fully owned government company is allowable as revenue expenditure.
16 February 2013
Dear Khilesh,
Its hard to argue your case as licence is a recognised depreciable asset. If the licence is for a period more than 1 year, it is not only a question of tax law but also of sheer accounting principle that the same should be subjected to depreciation.
To give you an idea how the ICAI also views it, below is a opinion by Expert Advisory Committee:
https://220.227.161.86/eac/eacfinal/vol16/1.htm
However, you may consider the judgment in the case of Supreme Court in CIT v. Bombay Dyeing and Manufacturing Co. Ltd. [1969] 219 ITR 521, and see whether the same applies to the factual matrix of your case or not.
Its hard to argue your case as licence is a recognised depreciable asset. If the licence is for a period more than 1 year, it is not only a question of tax law but also of sheer accounting principle that the same should be subjected to depreciation.
To give you an idea how the ICAI also views it, below is a opinion by Expert Advisory Committee:
https://220.227.161.86/eac/eacfinal/vol16/1.htm
However, you may consider the judgment in the case of Supreme Court in CIT v. Bombay Dyeing and Manufacturing Co. Ltd. [1969] 219 ITR 521, and see whether the same applies to the factual matrix of your case or not.
Message likes :
2 times
18 February 2013
Thanks Nikhil, but I want to clarify 1 more thing is License fees is paid by the assessee every year to the government.
18 February 2013
in that case, Bombay dyeing judgment may be helpful.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- ITDS U/S.194T of Firm
- Unregistered suppliers utility
- Difference between Date of Payment and Date of Deduction?
- Non-Compliance documents have not been submitted by the contractors debited
- The TDS balance for March 26 shows a mismatch between the books and the portal; what should be done
- EXPORT COMMERCIAL INVOICE HSN CODE
- GST Rate for Catering Services
- FCRA 6 E- Intimation
- Bank details not Visible on Traces Portal
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
