Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (11) TMI 995 - AT - Income TaxDisallowance of bad debts - Held that:- Assessee had reversed the entry with regard to the amount written off during the year i.e.it had brought the amount in question under the head bad debts from the head provision for bad debts.The FAA without considering the above argument had decided the issue.Therefore,in the interest of justice we are remitting back the matter to the file of the FAA for verification purposes.He would allow the claim of the assessee with regard to the bad debts written off during the year under appeal amounting to ₹ 69.45 lakhs,if same have been transferred from the provisions of bad debts to bad debts - Decided in favour of assessee in part. Addition on account of change in the method of accounting - Held that:- In the case under appeal the assessee had changed method of accounting deferring more than 75% of its revenue to future period perpetually. Such a change in our opinion is not a bona fide change. With regard to other cases relied upon we find that the F AA has thoroughly distinguished them and has given a finding that facts of the case under consideration are different from those cases.We agree with him.Therefore,we hold that the order of the F AA does not suffer from any legal or factual infirmity. Thus confirming FAAs order - Decided against the assessee. While determining the income of an assessee for a particular income all the necessary facts have to considered. Income offered by an assessee cannot be taxed twice i.e.same income cannot be taxed in two A Y.s.Seocndly,if the assessee has offered portion of its income for taxation then while determining the total income for that year such income it has to be taken in to consideration. The claim made by the assessee has to be verified in light of the above observations. Decided in favour of the assessee in part. TPA - AO held that the royalty should not be allowed to be written off to the extent of the unpaid invoices during the year itself - Held that:- Such cases ought to be dealt with on the basis that no sales had occurred and that therefore, there was no question of payment of any royalty to that extent, as the payments were not received by the respondent and were written off in its books of account had not paid for the same, it would make no difference to the determination of the Arm's Length Price of the transaction. Once it is accepted that the ALP of the royalty is justified, there can be no reduction in the value thereof on account of the assessee's customers failing to pay the assessee for the product purchased by them from the assessee. Absent a contract to the contrary, the vendor or licensor is not concerned with whether its purchaser / licensee recovers its price from its clients to which it has in turn sold / licensed such products. The two are distinct, unconnected transactions. The purchaser's / licensee's obligation to pay the consideration under its transaction with its vendor / licensor is not dependent upon its recovering the price of the products from its clients. - Decided in favour of the respondent - assessee.
|