9911796707
TMI Blog2020 (12) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... has raised following grounds of appeal: 1.On the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeal)-I ("CIT(A),,) erred in confirming the disallowance of license fees paid in earlier year but crystallized during year. 2.On the fact and circumstances of the case and in law the learned AO ought to have allowed the claim following the principle of consistency in not assessing such advance payment for license fees. 3.Without prejudice to above the learned CIT(A) erred in not giving full effect to the cash system of accounting as considered by the AO. 4. The Appellant humbly prays that the said disallowance be deleted. The Appellant craves leave to add / delete / modify any/ all the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee referring to the paper book and the written submissions submitted that as per the Government regulations the assessee is required to pay the licence fees in advance i.e. before the commencement of the year for which the licence is applied. In case the licence is not granted it is refunded and in case it is granted then it is claimed as an expenditure for the year to which it pertains. It was submitted that the assessee is following the cash system of accounting but since the alleged amount was an advance paid for next year and was also shown as an advance in the balance sheet and only when the licence was granted the expenditure got crystallized in the year for which it pertained and therefore the advance licence fee for Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has rightly claimed it as an expenditure against revenue of assessment year 2007-08. Issue of cash system/mercantile system of accounting is not having any impact on the issue under consideration because the amount of advance licence fees paid during Financial Year 2005-06 was just an advance and it converted into expenditure during Financial Year 2006-07 (Assessment Year 2007-08). Thus Ld. CIT(A) was not justified in confirming the addition made by Ld. A.O. We thus set aside the finding of Ld. CIT(A) and allow the claim of the assessee for the expenditure of licence fees of Rs. 12,72,096/-. The sole issue raised by the assessee is allowed. 7. In the result appeal of the assessee is allowed. Order was pronounced in the open court on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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