ITAT on Jio case says CWIP Is Not Capital and Technology Is Not Royalty

The ITAT dealt with two issues in Reliance Jio's case. 

It held that operational expenditure of over ₹1,100 crore, though carried as CWIP in the books, remained revenue expenditure because the business was already operational and the Revenue had not established a capital asset arising from the expenditure. 

It also held that payments to overseas telecom operators for voice termination, bandwidth and O&M were not royalty or FTS under the applicable DTAAs. Consequently, there was no withholding obligation under section 195 and no disallowance under section 40(a)(i).