TaxTMI 
TaxTMI 
2015 (2) TMI 574
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....ed as income in it's accounts originally, was not an income at all but was repayable to be adjusted as and when the time slots invoices were raised. 3. The brief facts of the case are that the assessee is engaged in TV broadcasting. The assessment was originally completed u/s. 143(3) of the I.T. Act on 11-11-2009 wherein exemption was granted on the basis of registration granted to the assessee u/s. 12AA of the Act by CIT, Kottayam vide order C.No. 305/Tech/(83)/12AA/CIT-KTM/205-06 dated 19-11-2008 which is in consequent to Tribunal's order. In the meantime, the granting of registration u/s. 12AA of the Act by ITAT was the subject matter of litigation before the Hon'ble High Court and the Hon'ble High Court vide judgment dated 22-03-2011 r....
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....bmitted that the assessee went in appeal against this order of the ITO assessing the total income at Rs. 2,42,76,690/- and the total tax demanded together with interest was Rs. 1,28,08,160/- for A.Y. 2007-08. 5. The Ld. AR submitted that the company maintained the books of accounts on cash basis. During the A.Y. 2007-08, the company received Rs. 1,50,00,000/- as advance for Time Slots for telecasting programme. in the accounts of the company it was shown as income as the company was following cash basis and the company was having 12A registration. In the original assessment for A.Y. 2007-08 completed u/s. 143(3) of the Act, there was no tax liability, since the company was given exemption u/s. 12A of the Act. The Ld. AR submitted that late....
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....ve of the nature of receipt and cannot be the sole determinant, when other circumstances show that no income whatsoever was earned and no effort whatsoever was expended by the company for earning any income. R.S. Surya vs. DCIT (2 ITR 746), wherein the Chennai Bench of the ITAT held that even when assessee is following cash system of accounting advance received could not be treated as income, unless an event had happened which would show that there was actual earning of income. CIT vs. Punjab Stainless Steel Industries (CA No. 5592 of 2008 dated 5/05/2014) wherein the Hon'ble Apex Court held that meanings and interpretations given by ICAI can be accepted. 10. The Ld. AR submitted that this is clearly applicable to this case also and inco....
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....parties and perused the record. According to the Ld. AR the assessee received an amount of Rs. 1.5 crores as advance from M/s. Believers Church India, Manjadi Thirvalla to fund day to day administrative operations and running expenses for production and development of TV-Video programmes of the assessee that it would broadcast and telecast the programme after obtaining the broadcast and telecast license from the Ministry of Information and Broadcasting, New Delhi. As per agreement dated 1st January, 2009, , the amount was advanced to the assessee prior to this agreement on 30- 10-2006 as advance for telecast time slot. Further, the Believers Church India has confirmed the advance vide their letters dated 20th February, 2008, 27th February, ....
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.... credited the amount of Rs. 1.5 crores as advance receipt and it should be recognized as income of the assessee only after carrying out the activity for which it was advanced. The incomings and outgoings need not be reflected in the income and expenditure account of the assessee for this assessment year. At the end of the completion of the programme, the amount has to be credited to the income and expenditure account of the assessee and it should be treated as income of the assessee. The amount received as advance has to be taken out of the computation of income from the income side and the monies spent for telecasting and broadcasting the programme of M/s. Believers Church India, if it is charged to the income and expenditure account, has ....