2014 (5) TMI 442

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....be treated as income and, therefore, brought to tax." 2. With consent of the counsel for the parties, matter was heard finally. 3. The appellant showed that, during the period relevant to AY 2008-09, it had received Rs.1,66,99,360/- from two parties, i.e., Samsung India Electronics Pvt. Ltd. and a Samsung Telecommunication India Pvt. Ltd. The AO by issuing show cause asked: "why the amount should not be treated as income during the relevant year". The assessee claimed that in terms of the provisions of the Income Tax Act, 1961 the tax had to be deducted from the payer which was done. The appellant also stated that the amounts were treated as an advance, given the nature of its business which was to book and publish advertisements on b....

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....ssion in the following terms: - "13. We have heard the rival contentions in light of the material produced and precedent relied upon. We find that the parties who have paid the said advance has clearly informed that the amount in question has been treated as expenses incurred by them during the year. Hence, the plea of the assessee to treat the amount received as advance is not very cogent. However, we find that there is considerable cogency in the assessee's submissions that proper credit of pass through cost should be taken, if the amount is being treated as revenue receipt. Since we have already remitted the first issue in this case to the file of the Assessing Officer. We find that interest of justice will be served, if this issu....

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....sions, the books of accounts and other documents maintained by the assessee consistently showed that the amounts were treated as advance and the actual expenditure was appropriated as and when the occasion arose. The learned counsel submitted that for the succeeding assessment year, the revenue was recognized in the books of accounts and taxes were paid, accordingly. 8. We have considered the submissions of the parties. Even though the DRP and the Tribunal appear to have accepted the merit of the assessee's contention, they have not fully endorsed the position, consistently projected by it, that the amounts received were not in the nature of income. As to the exact arrangement that existed between the assessee and its customers, i.e., Sa....