What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to delete the addition. The issue was found to be well-settled in favor of the assessee by coordinate bench orders, affirmed by the High Court, with the revenue's SLP dismissed by the Supreme Court.

The assessee company, engaged in mobile telephony services, showed un-accrued revenue from unused talk time on prepaid cards. The Assessing Officer treated this as income, following earlier assessment years.

What were the issues?

Whether un-accrued revenue from unused talk time on sale of prepaid cards can be treated as income for the year.

DCIT vs Sistema Shyam Teleservices Pvt… | ITAT Delhi 2021

Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI

Before: SH. N. K. BILLAIYA & SH. AMIT SHUKLA

For Respondent: Ms. Nidhi Srivastava, CIT DR

Hearing: 07/07/2021Pronounced: 07/07/2021

This appeal by the revenue is preferred against the order of the CIT(A)-31, New Delhi dated 06.12.2017 pertaining to A.Y. 2012-13.

The only grievance of the revenue read as under :-

1. Whether the Ld. CIT (A) was justified in deleting the addition of Rs. 21,78,55,399/- made by the AO on account of un-accrued revenue treated as income for the year under consideration form unused talk time on sale of prepaid cards, particularly when the matter is sub- judiced before the Hon’ble Delhi High Court on the departments’ appeal against the orders of the Hon’ble ITAT.

2. The appellant craves leave to add, alter or amend any of the ground(s) of appeal before or during the course of hearing of the appeal.”

Briefly stated the facts of the case are that during the year under consideration the assessee company derived income mainly from Mobile Telephony Services render on CDMA platform. The telephony services are mostly rendered through prepaid cards.

The assessee has shown Rs.86.29 crores as un-accrued revenue in the balance sheet as on 31.03.2013. The assessing officer found that the AO in the assessment order passed in earlier year disallowed this provision and treated the same as revenue.

Taking a leaf out of the finding given in the earlier assessment years the AO made addition of Rs.21.78 crores after reducing un-accrued revenue as on 31.03.2011 for Rs.64.50 crores.

Assessee successfully agitated the matter before the CIT(A).

Before us at the very outset the counsel stated that the entire issue is now well settled in favour of the assessee and against the revenue by the orders of the coordinate bench of this Tribunal which have been affirmed by the Hon’ble High Court and the SLP of the revenue has been dismissed by the Hon’ble Supreme Court.

The Ld. DR fairly conceded to this but showed her apprehension in respect of the observations given by the Hon’ble High Court.

We have given a thoughtful consideration to the orders of the authorities below. We have also considered the decisions of the coordinate bench and the Hon’ble High Court. We find force in the contention of the counsel. The impugned issue has been decided by the coordinate bench and the latest decision is dated 22.02.2021 in for A.Y.2013-14. The relevant findings of the coordinate bench read as under :-

10.

The apprehension raised by the Ld. DR has been considered by the AO himself while framing the assessment order for A.Y.2013-14 vide order dated 30.12.2016.

11.

The relevant finding of the AO read as under :-

12.

Considering the totality of the facts of the case in the light of the decisions of the coordinate bench and the Hon’ble High Court and the effect given in the subsequent years as mentioned here in above we do not find any reason to interfere with the findings of the CIT(A). The appeal filed by the revenue is accordingly dismissed.

13.

In the result, the appeal filed by the revenue is dismissed.

14.

Decision announced in the open court in the presence of both the representatives on 07.07.2021.

DCIT, CIRCLE- 23(2), NEW DELHI vs. SISTEMA SHYAM TELESERVICES PVT. LTD., NEW DELHI

What did the Tribunal hold?

What were the facts?

What were the issues?

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