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2019 (1) TMI 1597 - AT - Income TaxAccrual of income - Addition on account of un-accrued revenue from the sale of prepaid cards - HELD THAT:- As decided in SHYAM TELELINK LTD. [2018 (12) TMI 585 - DELHI HIGH COURT] a right to receive a particular sum under the agreement would not be sufficient unless the right accrued by rendering of services and not by promising for services and where the right to receive is anterior to rendering of service, the income, therefore, would accrue on rendering of services. The appropriation of prepaid amount was contingent upon the assessee performing its obligation and rendering services to the prepaid customers as per the terms. If the assessee had failed to perform the services as promised, it would be liable and under an obligation to refund the advance payment received under the ordinary law of contract or special enactments, like the Consumer Protection Act. The aforesaid legal position would meet the argument of the Revenue that the prepaid amount received was not liable to be refunded or repaid, whether or not any services were rendered. - Decided in favour of assessee.
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