TMI Blog2017 (1) TMI 1396X X X X Extracts X X X X X X X X Extracts X X X X ..... lated to royalty received by the assessee from the licensee. AS-9 allows deferment of royalty income. Thus, in our opinion the assessee had rightly offered the incomes in six AY's proportionately. Therefore, reversing the order of the FAA and considering the peculiar facts and circumstances of the case, we decide the effective Ground of appeal in favour of the assessee. - I.T.A./5629/Mum/2012 - - - Dated:- 6-1-2017 - Sh.Rajendra,Accountant Member, And Amarjit Singh,Judicial Member For The Revenue : Shri Suman Kumar -DR For The Assessee : Shri Birendra Dutta PER Rajendra A.M. - Challenging the order dated 20.07.12 of CIT(A)-3 Mumbai the assessee has filed the present appeal.Assessee, an individual filed his ROI on 30.09. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rment of income, that the entire consideration was received during the year. Therefore, he made addition of ₹ 41.66 lakhs (Rs.50 lakhs ₹ 8.33 lakhs offered by the assessee for the year under appeal). The AO also placed reliance on AS-9 and referred to the case of Union Land Building Society (P.) Ltd. (83ITR794). 4. Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority(FAA)before whom he made elaborate submissions.After considering the assessment order and the contentions of the assessee the FAA held that the assessee had entered into an agreement with Moser Baer for the period dt. 31.5.09 to 31.5.14, that being a licensor he was the sole and absolute owner of the Home vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, that the agreement clearly stipulated the parties as licensor and licensee and not seller and buyer, that he was following mercantile system of accounting and revenue was recognised based on accrual basis.As per Accounting Standared-9 income from royalty has to be recognized proportionately over a period of time, that the agreement proved receipt of money in advance, that receipt would not constitute income, that the time of receipt would not alter the character of receipt. DR supported the order of the FAA. 6. We have heard the rival submissions and perused the material before us. We find that the assessee had entered into an agreement with Moser Baer India Ltd., that he received ₹ 50 lakhs in pursuance of the Agreement, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration payable in respect thereof in the same proportion. If the consideration for the said Title has already been made by Licensee to the Licensor, the Licensor shall reimburse licensee with the same within 15 days along with Interest @ 12 % per annum from the date of payment of the Consideration till the date of payment and/or realization. 6.2.4. Notwithstanding the foregoing, in any Event of Default, Licensee shall have the right but not the obligation to terminate this Agreement forthwith and on such termination, the Licensor shall be liable to reimburse Licensee for the entire consideration amount paid by Licensee to the Licensor within 15 days along with interest @ 12% per annum from the date of payment of the consideration til ..... X X X X Extracts X X X X X X X X Extracts X X X X
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