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2019 (9) TMI 495 - AT - Income TaxAccrual of income - Addition on account of advance billings - whether the said amount has not accrued as income during the year under consideration? - Appellant prays that the change in the method of accounting adopted by the Appellant since AY 2004-05 is a bonafide change - HELD THAT:- We find that the above issue is decided against the assessee by the order in assessee’s own case for AY 2004-05 [2015 (11) TMI 995 - ITAT MUMBAI] as held there was tenure of license/product but there was no certainty that in every subsequent year some determinate service had to be provided by it, that there was no determined/committed expenditure which the assessee was required to incur in the future years towards the corresponding share of revenue, that the indeterminate event of providing of updates and services as and when the they were developed which had been in keeping with the industrial norm. The assessee had no right to postpone the revenue. Inspite of adequate opportunitie, the assessee had not filed any facts before the FAA or us, as stated earlier, in that regard. - Decided against assessee. Deduction for royalties - HELD THAT:- As in assessee’s own case for AY 2004-05 [2015 (11) TMI 995 - ITAT MUMBAI] assessee’s contention that revenue on account of advance billing should be spread over for a period of time has been rejected by the AO which has been confirmed by the Tribunal also. Once that is so, then contention of the assessee that ‘royalty’ which is payable on such advance billing in accordance with the agreement, should also consequently be allowed in this year only. The DRP has acknowledged this fact and has directed that if the assessee finally accepts the assessability of entire billing amount as revenue in the current year, then the assessee would be entitled for 30% deduction on account of royalty. Thus, AO is directed to allow the claim of deduction of royalty in this year in accordance with law Addition on account of alleged un-reconciled entries of Annual Information Report - AO finds that the assessee has not duly accounted for the above sum and offered it to tax whereas the assessee argues that it has been duly accounted for and offered to tax - HELD THAT:- The above factual matter needs verification at the level of the AO for ascertaining the facts. Therefore, we set aside the order of the Ld. CIT(A) on the above issue and restore the matter to the file of the AO to make an order afresh following the above Instruction of CBDT, after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the AO. Thus the 2nd ground of appeal is allowed for statistical purposes. As the matter has been restored to the file of the AO, we are not adverting to the case-laws relied on by the Ld. counsel.
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