TMI Blog2011 (7) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... ells collected from new born babies for a period of 21 years. Parents come forward to use the facility provided by the assessee-company to preserve and store the blood stem cells of their wards so that the cells can be used to combat against major diseases till their wards attain the age of 21 years. This is the benefit of modern technology. The assessee is carrying on business in that line. The assessee is making three types of collections from its clients. The three categories of collections are enrolment fee, processing fee and storage fee. The collections made under enrolment fee and processing fee are accounted by the assessee as income of the year of receipt and offering for taxation in the relevant assessment year. In other words, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue receipt attributable to the period of storage undertaken by the assessee and yearly distributed on a proportionate manner. The reason for this accounting treatment is that the assessee is bound to store the blood stem cells for the entire period of contract entered into with the parents and therefore the lump sum collection has to be distributed over the period of liability. Then only the assessee can satisfy the matching principle of income and expenditure. Moreover, as per the terms of the agreement, whenever a parent terminates the contract with the assessee, the assessee is liable to make refund of the storage fee collected from that parent pertaining to the unexpired period of contract. Therefore the assessee is providing for f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance collection of storage fee from parents of babies. As far as enrolment fee is concerned, there is no dispute. In the case of processing fee there is no dispute. In the case of storage fee paid on yearly basis, again, there is no dispute. All these three collections are treated as revenue receipts of the concerned previous year. The dispute is only in respect of the storage fee collected by the assessee in advance. It is to be seen that the assessee is storing the blood stem cells for a period of 21 years. When the assessee is collecting storage fee in advance from the parents in a lump sum, the assessee is undertaking the liability of providing the services of storing the blood stem cells not for the year of receipt alone, but also fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. Secondly, as far as section 263 is concerned, the same cannot be invoked if the assessing authority has followed one of the possible views. In the present case even if any other view is possible, still the assessing authority has followed a view possible in law. Therefore, on that ground also the revision order passed by the Commissioner of Income-tax is not sustainable. The reason pointed out by the Commissioner of Income-tax that the assessing authority has not examined the issue, has now become an academic issue for the reason that on the merit of the issue, the assessing authority has decided the issue in accordance with law. But, as a matter of fact, we have to state that the assessee has furnished the details of collections ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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