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2015 (2) TMI 574 - AT - Income TaxAccrual of income - advances received against time slots - denial of exemption u/s. 11 - assessee is a company registered u/s. 25 of the Companies Act engaged in broadcasting of television programs - Held that:- The income of the assessee should be computed on strict commercial principles. Though the assessee is not entitled for exemption u/s. 11 of the I.T. Act, the main charging section is sec. 4(1) of the I.T. Act which levies income tax as only one tax, on the ‘total income’ of the assessee as income u/s. 2(45) of the I.T. Act. The income, in order to come within the purview of the definition must satisfy two conditions. Firstly, it must ‘comprise the total amount of the income referred to in sec. 5 and secondly, it must be paid in the manner laid down in this Act’. If either of these conditions fails, the income will not form part of the total income that can be brought to tax as held in the case of CIT vs. Harprasad & Co. (1975) (1975 (2) TMI 2 - SUPREME Court & 125) and treatment given by the assessee in its books of accounts is not conclusive or decisive so as to bring it into tax and in order to be computed in accordance with the provisions of the Act as held in the case of Kedarnath Jute Mfg. Co. Ltd. vs. CIT (1971 (8) TMI 10 - SUPREME Court). We are of the opinion that the Assessing officer shall not include the amount received as advance as income of the assessee if it does not contain the income element in it. With these observations, we are inclined to direct the Assessing officer to examine the above issue in the light of the above observations and decide accordingly. - Decided in favour of assessee for statistical purposes.
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