TMI Blog2015 (2) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... ition 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act by ITAT was the subject matter of litigation before the Hon ble High Court and the Hon ble High Court vide judgment dated 22-03-2011 reversed the order of the Tribunal and opined that the assessee was not entitled for registration u/s. 12AA of the Act and thus the earlier order of the CIT, cancelling the registration u/s. 12AA was restored. Accordingly, the Assessing officer while passing the giving effect order to the High Court judgment, passed the impugned assessment order vide order dated 19-12-2011, denied the exemption u/s. 11 of the Act and brought into tax the amount of ₹ 1.5 crores received by the assessee as contract advance for telecasting and broadcasting the programme by M/s. Believers Church India in this as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or A.Y. 2007-08 completed u/s. 143(3) of the Act, there was no tax liability, since the company was given exemption u/s. 12A of the Act. The Ld. AR submitted that later the assessment was reopened due to cancellation of 12A registration. Thereafter, the company submitted a revised computation statement since the advance received on time slots was a liability. However, the AO did not accept the contention of the assessee. 6. The Ld. AR submitted that it is an undisputed fact that the amount of ₹ 150,00,000/- received in A.Y. 2007-08 was only an advance and the company was issued the broadcasting license only on 30-12-2010 due to which it could not recognize any income towards telecasting of programme prior to earning of such income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14) wherein the Hon ble Apex Court held that meanings and interpretations given by ICAI can be accepted. 10. The Ld. AR submitted that this is clearly applicable to this case also and income is earned only when the programme is actually aired before the public. 11. The Ld. AR also relied on AS 9 issued by ICAI on revenue recognition on completed service contract method which clearly states as follows: Revenue is recognized when the sole or final act takes place and the service becomes chargeable. Revenue should be recognized when the service is complete. For advertising agencies, media commission will normally be recognized when the related advertisement or commercial appears before the public . 12. Thus the Ld. AR submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee prior to this agreement on 30- 10-2006 as advance for telecast time slot. Further, the Believers Church India has confirmed the advance vide their letters dated 20th February, 2008, 27th February, 2008 and 29th February, 2008 and there was also a request from them for return of advance vide these letters. The Ld. AR s contention is that this amount is only received as advance for telecasting and broadcasting programmes of M/s. Believers Church India. Since there was no valid license or permission from Ministry of Information and Broadcasting to telecast and broadcast the programmes, it was kept with the assessee as advance only and being so, the income is not accrued to the assessee. The Ld. AR submitted that since the entire am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the computation of income from the income side and the monies spent for telecasting and broadcasting the programme of M/s. Believers Church India, if it is charged to the income and expenditure account, has to be taken out of the computation of income from the expenses side and the income generated from the transaction to be treated as income in the year in which the programme was telecasted and broadcasted, if so. The expenses incurred for telecasting and broadcasting the programme of M/s. Believers Church India should be treated as revenue expenditure in the year in which the programme was telecasted and broadcasted by M/s. Believers Church India. If it was for the specific purpose, the advance was received by the assessee and if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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