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Assistant Commissioner of Income Tax, Circle-6, Jaipur Versus M/s. Jaipur Stock Exchange Ltd.

2015 (12) TMI 281 - ITAT JAIPUR

Addition made on account of annual listing fees received from its member on accrual basis - CIT(A) deleted the addition - Held that:- As decided in assesse's own case for A.Y. 2007-08 Hon'ble Delhi High Court in the case of CIT Vs. Consultng Engg. Services (India) Ltd, [2001 (1) TMI 48 - DELHI High Court ] has held that the method of accounting consistently followed by assessee will be most relevant in the accrual system of accounting and it is not open to AO to disturb the same. In this backgro .....

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nd in that case also as per copy of assessment order u/s 145(3) dated 4-12-2008 for assessment year 2006-07 on this account no addition has been made and contrary to this case in the present case the appellant stock exchange is recognizing the listing fee as income where income is not over due for more than 3 years. With this discussion AO was not justified in making said addition which is hereby deleted - Decided in favour of assessee. - ITA No. 356 & 357/JP/2013 - Dated:- 11-8-2015 - SHRI R.P. .....

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erred in deleting the addition made on account of annual listing fees received from its member on accrual basis. 2. Similar ground of appeal was raised by revenue in the case of assessee for the A.Y. 2006-07 and 2007-08. Perusal of the assessment orders show that as per the AO, the assessee company had not accounted the annual listing fee of ₹ 79,48,500/- for A.Y. 2008-09 and ₹ 69,33,400/- for A.Y. 2009-10 as Income and had been written off. The AO held that this should not have been .....

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dated 30.04.2010 in favour of the assessee by upholding the finding of ld. CIT (A). We are reproducing para 32 & 33 of order of Tribunal as under :- 32. After having gone through the above decisions, we find that there is substance in the above contention of the ld.AR. The Hon'ble Supreme Court of India in the case of CIT Vs. Shoorji Vallabhdas & Co, (supra) has held that if any accrual system, the probability or improbability of realization has also to be considered in a realistic .....

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. CIT(A) has rightly given the following conclusion vide para 1.3 of his first appellate order which is being reproduced hereunder. 1.3 I have considered facts of the case and arguments taken by Shri Bholusariya and Shri Goyal quite carefully. It is seen that consistently in the same manner the appellant was accounting annual listing fee. As per the said method wherever for 3 years annual fee is not recovered it is not recognized as revenue and following this policy even if annual listing fee is .....

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n of prudence in the accounting system. On this issue, Hon'ble ITAT Pune Bench in the case of Wstern Maharashtra Dev. Corpn. Ltd Vs. DCIT , 114 TTJ 54 has deleted the addition made on account of accrued interest on the seed money loan since, recovery was uncertain. Hon'ble Allahabad High Court in the case of CIT Vs. Giriraj Udyog (P) Ltd , 273 ITR 495 has held that the mercantile system only recognizes the income that has accrued and where there is no chance of recovery, the assessing of .....

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