DEPUTY COMMISSIONER OF INCOME TAX, CHENNAI vs. JOHNSON LIFTS PRIVATE LIMITED, CHENNAI

ITA 3401/CHNY/2025Status: DisposedITAT Chennai20 August 2026AY 2020-2112 pages
AI SummaryDismissed

What were the facts?

The Revenue appealed against the deletion of additions made on account of advance receipts for Annual Maintenance Contracts (AMCs). The assessee recognized AMC income proportionately over the contract period, while the Assessing Officer (AO) sought to tax the entire amount in the year of receipt.

What did the Tribunal hold?

The Tribunal held that Section 43CB of the Income-tax Act, applicable for the assessment years in question, mandates recognition of revenue over the contract period for service contracts. Therefore, the proportionate recognition of AMC income was legally correct.

What were the issues?

The key issue was whether advance AMC charges should be taxed in the year of receipt or spread over the contract period, considering the applicability of Section 43CB.

Which sections of the Income-tax Act were involved?

Section 43CB,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI ABY T VARKEY & SHRI S. R. RAGHUNATHA

Hearing: 28.07.2026Pronounced: 20.08.2026

PER S. R. RAGHUNATHA, AM : These two appeals have been preferred by the Revenue against the orders dated 11.09.2025 for the Assessment year (A.Y.) 2020-21 and 10.09.2025 for the A.Y. 2018-19 both passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the Ld. CIT(A)”], arising from the assessme

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