The Delhi Bench of Income Tax Appellate Tribunal (ITAT) while granting relief to Vodafone has allowed Rs.1,247 crore depreciation on 3G spectrum rights.
The bench of Shriyogesh Kumar U.S. (Judicial Member) and S. Rifaur Rahman (Accountant Member) has observed that spectrum qualifies as an intangible asset eligible for depreciation under Section 32 of the Income Tax Act.
The appellant/assessee, Vodafone Idea Ltd. challenged the disallowance of depreciation amounting to ₹12,47,17,47,967 on the “Right to Use 3G Spectrum,” which it had capitalized and treated as an intangible asset under Section 32 of the Income Tax Act.
The assessee argued that the spectrum fee was capital in nature and eligible for depreciation as an intangible asset. Section 35ABB applies only to license fees for telecom services, not to spectrum rights. Section 35ABA (for amortization of spectrum fee) was introduced only from AY 2017–18 and therefore did not apply to the year under consideration. Relied on earlier ITAT rulings in group cases (Vodafone India Ltd. and Idea Cellular Ltd.) and similar rulings in Tata Teleservices (Maharashtra) Ltd.
The Assessing Officer disallowed the depreciation and amortized the expenditure under Section 35ABB, with the Dispute Resolution Panel (DRP) upholding this view.
The ITAT observed that identical issues had already been decided in favour of the assessee in earlier group company cases. Respectfully following those precedents, it held that depreciation on 3G spectrum rights is allowable.
Case Details
Case Title: Vodafone Idea Ltd Versus ACIT
Case No.: ITA No. 8361/Del/2019
Date: 24/10/2025
Counsel For Appellant: Salil Kapoor, Adv
Counsel For Respondent: S. K,. Jadav, CIT DR
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