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Income Tax Appellate Tribunal, MUMBAI “B” BENCH, MUMBAI
Before: SHRI SHAILENDRA KUMAR YADAV, JUDICIAL & SHRI RAJESH KUMAR.
This appeal has been filed by assessee against the order of Commissioner of Income-Tax (Appeals)-II, Thane, dated 21.06.2013 for A.Y. 2009-10 on following ground:
A.Y. 2009-10 [ACIT, Thane Vs. Shri Mahesh B. Chapekar Page 2
“The learned CIT(A) erred in deleting the addition of Rs.35,88,521/- without appreciating the fact that the assessee is following cash system of accounting and consequently amount of Rs.35,88,521/- which is of the nature of trading receipts is taxable in the year of receipt.”
The brief facts of the case are that the assessee has received advance payment of Rs.35,88,521/- in the year under consideration services for which are yet to be rendered. So, Assessing Officer made addition in question.
2.1 In appeal, the CIT(A) observed that unless service are rendered by assessee, the advance payments received remain as liability and cannot partake character of income chargeable to tax even in the cash system of accounting. Moreover, these advance receipts have been shown by the assessee as income in the subsequent assessment year and bringing the same to tax again in this assessment year would amount to double taxation which is not permitted under law. Further CIT(A) noticed that in the year under consideration net profit was 33.32% of the gross receipt as compared to 31.61% in the immediate preceding assessment year and hence the net profits during the year under consideration was better.
2.2 In view of the above, we are of the view that the CIT(A) has rightly observed the advance payment received for the services to be rendered in subsequent year cannot be treated income and accordingly, the addition made by the AO on this account at Rs.35,86,521/- was rightly deleted by him, same is uphold. A.Y. 2009-10 [ACIT, Thane Vs. Shri Mahesh B. Chapekar Page 3
In the result the appeal filed by the Revenue is dismissed.
Pronounced in the open Court on this the 19th day of August, 2016.
Sd/- Sd/- (RAJESH KUMAR) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai: Dated 19/08/2016 True Copy Prabhat kesarwani आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार, आयकर अपील�य अ�धकरण, मुंबई ।