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2013 (2) TMI 558 - AT - Income TaxRevenue recognition - Applicability of AS-9 - Accrual basis of accounting - held that:- profits for the purpose of taxation have to be determined as per commercial principles, subject to specific provisions of the Act. Accounting practices and standards, which are widely accepted and adopted, would be a good guide to the determination of commercial profits. However, though accounting standards and practices are relevant, they cannot override specific provisions of the Act. The Supreme Court in Challapali Sugars Ltd. V. CIT, [1974 (10) TMI 3 - SUPREME COURT] had laid down that pronouncements of accounting bodies are relevant in determining commercial profits. In Tuticorin Alkali Chemicals & Fertilizers Ld., V. CIT, [1997 (7) TMI 4 - SUPREME COURT], it was held that : ‘The argument based on accountancy practice has little merit if such practice cannot be justified by any provision of the Statute or is contrary to it’. CIT Vs. Bokaro Steel Ltd., [1998 (12) TMI 4 - SUPREME COURT] the subsequent decision in case of reiterated the same principle. The case of Hindustan Housing and Land Development Trust Ltd. [1986 (7) TMI 10 - SUPREME COURT] has been distinguished by the Hon’ble AP High Court in the case of CIT Vs. KCP Ltd., [1994 (12) TMI 21 - ANDHRA PRADESH HIGH COURT] wherein it was held that the assessee’s collection was acceptable as a trading receipt in the relevant year. The Hon’ble Supreme Court at [ 2000 (8) TMI 3 - SUPREME COURT] affirmed the decision of the AP High Court [1994 (12) TMI 21 - ANDHRA PRADESH HIGH COURT]. Therefore, the amount of Rs. 95,40,000/- which is due from M/s Param Power Projects Pvt. Ltd. is to be treated as income of the assessee company. - Decided in favor of revenue.
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