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2015 (4) TMI 709 - AT - Income TaxAd-hoc addition on account of advance billing / deferred revenue - Tribunal deleted such additions in earlier years - Foreign exchange loss recongnised on capitalised assets i.e. computer software - Held that:- There is nothing like device to defer payment of taxes due but as per the recognized method of accounting of matching revenue with cost, the income accrues only in the subsequent year when such services are provided. This is in form of a provision for warranty claims which is also recognized by Hon’ble Delhi High Court in the case of Vintex Corporation P. Ltd. [2005 (5) TMI 54 - DELHI High Court], wherein it was held that provision for warranties embedded in the sale price is an ascertained liability and to that extent, revenue need not be recognized.We find no good reason to deviate from the view taken as facts remain the same. Accordingly following the precedent, we hold that the amount treated as deferred revenue is not to be brought to tax in the year under consideration and is to be taxed in the year when such services are rendered or recognised as income by the assessee. Foreign Exchange loss - Held that:- since the amount payable is in foreign currency and not in India rupees, therefore, loss occasioned due to upward revision in the rate of exchange was to be borne by the assessee was allowable. On the reading of the agreement, we find that it is rightly interpreted by the Tribunal and, therefore, no questions of law arises. - Decided in favour of assessee.
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