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2014 (8) TMI 239 - AT - Income TaxRevenue recognition - Method of accounting – Mismatch between purchases and reflection in stock - Assessee neither followed neither mercantile system nor cash system of accounting – Held that:- As decided in assessee’s own case, it has been held that the advances were required to be utilized for the purpose of executing contract and as per the terms of the contract, the advances were adjusted as per actual progress of the contract - CIT(A) has recorded that no advance is adjusted in full in the first bill for the work done as the entire contract was not complete and that if the contract is not completely fulfilled the assessee has to return the amount of advances – the system of accounting of the assessee was followed by the assessee for the last 35 years i.e. from the year of its inception and all along has been accepted by the department - there is nothing wrong on the part of the assessee in not considering the amount representing work advances as income accruing or arising to it until a regular bill for work done is submitted and accepted by its clients - the order of the CIT(A) is correct in accepting the method of accounting followed regularly for the last 35 years – there was no reason to interfere in the order of the CIT(A) – Decided against Revenue.
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