Amount received for transfer of indefeasible right of connectivity for 20 years is assessable over the period of 20 years.

RI Ltd. in terms of the agreement, had only the right to use the network during the tenure of the 20 years agreement. Further, the agreement was liable to be terminated at the sole discretion of RI Ltd. and consequently, the amount received as advance for 20 years lease period would have to be returned on such termination for the balance unutilized period. Tribunal also held that the agreement dated 30th April 2003 was only in the nature/form of a lease agreement. Therefore, the assessee had in terms of AS‐19 correctly spread the entire fee of Rs.3,037 crores over the period of 20 years and to pay tax thereon over the entire period. Entire amount was not assessable during the relevant year. (A.Y. 2004 –2005)
CIT v. Reliance Communication Infrastructure Ltd. (2012) 79 DTR 198 /254 CTR 251(Bom.) (High Court)