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2015 (11) TMI 751 - AT - Income TaxAddition u/s 41(1) - CIT(A) deleted the addition - Held that:- the assessee was simply acting on behalf of its customers/clients and Government and getting consultancy fee from the client on account of services rendered. The sundry creditors as appearing in its books are actually on account of clients and not of the assessee. In such circumstances, the provisions of section 41(1) cannot be applied. It is further a matter of record that the assessee furnished details about the disputes going on between the two sides for which the payments were not made. The Executive Director of the assessee in his certificate has confirmed that all the outstanding sundry creditors treated as cessation of liability by the Assessing Officer continue to be part of the assessee's outstanding as per records. The ld. CIT(A) after entertaining the Assessing Officer's report on additional evidence, in our considered opinion, was right in deleting the addition. - Decided against revenue. Disallowance on account of decrease in income due to change in method of accounting relating to consultancy fees - CIT(A) deleted the disallowance - Held that:- With the changed method of depicting consultancy fee, the assessee started recognizing income on the basis of work/stage completed as scheduled in agreement with clients as against the earlier policy of recognizing income on work done even in respect of incomplete stages. This change in the method has resulted in the understatement of income for the current year to the extent of ₹ 1.35 crore. This change was necessitated because of advice given by the statutory auditors. This advice was given by the auditors on the reason that in past same fees was taken as income, but, had to be reversed in the subsequent years. It is not the case of the Revenue that this revised practice of recognizing income has not been consistently followed by the assessee in future. In our considered opinion, the ld. CIT(A) was justified in deleting the addition made by the Assessing Officer on the basis of this better way of recognizing the income. - Decided against revenue. Depreciation @ 60% on computer peripherals like UPS, printers, etc. - Held that:- This issue is no more res integra in view of the judgment of the Hon'ble jurisdictional High Court in CIT vs. BSES Yamuna Powers Ltd., [2010 (8) TMI 58 - DELHI HIGH COURT] deciding the issue in the assessee's favour entitling assessee to depreciation at the higher rate of 60%.- Decided against revenue.
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