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2015 (11) TMI 339 - AT - Income TaxAccrual of income - Advances received from various producers - whether assessable as income for the respective assessment years or not? - Held that:- The amounts received by the assessee from various producers towards advances cannot be assessed as income of the assessee. Therefore, we set aside the orders of the lower authorities and delete the additions in respect of the advances treated as income of the assessee. These token amounts were received by the assessee for giving preference to the parties for making himself available for future assignments, if finalised after deliberations and consideration of various factors and criteria. Which means that by receiving these advances as token amounts, the assessee is binding not to take up any other assignment prior to finalising the proposed assignment. It is also important to note that on accepting the amounts, the assignments itself is not finalised but the finalisation of the assignment is also dependant on acceptance of the terms and conditions mutually by both the parties. When the assessee has returned these amounts in the subsequent years as the proposed assignment were not materialised then it would not be proper and appropriate to treat these amounts as income of the assessee.See S. Priyadarsan. Versus Joint Commissioner Of Income-tax [2001 (7) TMI 298 - ITAT MADRAS-B] - Decided in favour of assessee.
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