Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (7) TMI 955 - AT - Income TaxRevenue for services on unused prepaid cards - Revenue recognition relating to unused talk time remaining available as at the end of the year - Held that:- As long as assessee company is under obligation to provide talk time, it cannot be said that a debt has accrued in favour of assessee company against the subscriber. The assessee company cannot appropriate the charges relating to available talk time to the exclusion of subscribe as long as it is under obligation to provide said services. Therefore, we are of the opinion that learned CIT(A) in principle has rightly accepted the mode of revenue recognition by assessee. DR has submitted that from the system followed by the assessee, there is every likelihood of revenue leakage. In this regard learned counsel has submitted that the matter can be restored to the file of AO for verification of this aspect only. We, therefore, restore the matter to the file of AO for the limited purpose of verification whether in the subsequent year the assessee has declared the revenue in respect of expired prepaid cards or not. In case no discrepancy is found in this regard, no adjustment is called for with the assessee's mode of revenue recognition. In terms of aforementioned observation this ground is partly allowed for statistical purposes. Addition on excess commission paid by the assessee - Held that:- It is true that AO cannot sit in the judgment of a businessman but at the same time he has to examine that assessee has claimed the expenditure in accordance with commercial considerations and not as per its whims and fancies. The terms of contract fix the reasonableness of amount payable by the assessee and, therefore, any amount paid over and above the same cannot be treated wholly and exclusively for business purposes. However, in the present case, we find that learned CIT(A) had duly referred the addendum for AO's comment and he has only disputed the admission of the said addendum but not the veracity of the addendum per se. We, therefore, do not find any reason to interfere with the order of learned CIT(A). Addition on account of late payment of PF and ESI - Held that:- No reason to interfere with the order of learned CIT(A) because admittedly in respect of disallowance deleted by learned CIT(A) the payment was made before the due date of filing the return.
|