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2018 (5) TMI 1082 - AT - Income TaxAddition on account of income not offered to tax - revenue recognition - AS -9 issued by ICAI - Held that:- The relevant clause relied upon by the ld. AO from AS-9 on revenue recognition pertains to the sale of goods where the risk and reward incidental to the ownership of the product has been transferred by the seller to the buyer. But in the instant case, the assessee has not made any sale of goods instead it only received a consideration in the form of royalty for enabling the usage of its trade mark “ Vibes”. Hence as per the revenue recognition prescribed under AS-9 of ICAI in respect of royalties, the same has to be recognized only over the validity of tenure of the agreement which has been rightly done by the assessee. Hence we have no hesitation to direct the AO to delete the addition - Decided in favour of assessee.
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