TaxTMI 
TaxTMI 
ICDS IV : Revenue Recognition
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....situations where other ICDS apply. 2. Revenue:- Revenue is the gross inflow of cash, receivables or other consideration arising in the course of the ordinary activities of a person from the sale of goods, from the rendering of services, or from the use by others of the person's resources yielding interest, royalties or dividends. In an agency relationship, the revenue is the amount of commission and not the gross inflow of cash, receivables or other consideration. 3. Sale of goods:- There are two cumulative criteria for recognising revenue from sale of goods: * The seller has transferred the property in the goods to the buyer for a price or significant risks and rewards associated with the ownership of the goods have been transferred....
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.... whether the transaction is a service transaction. This will depend upon the facts and circumstances of the transaction. Often a transaction involves both, sale of goods and provision of service. In such a case, one will have to examine what is the predominant aspect of the transaction, whether consideration to be received for the transaction can be split into that for sale of goods and for provision of service, etc. * Merely, because a transaction is liable to service tax it will not ipso facto mean that it is a service transaction as contemplated under this ICDS. For example, a real estate developer developing a property on his own account and not as a contractor will not be covered by this ICDS, since the predominant aspect of the tran....
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....ty is taxed under the provisions of any DTA, provisions of such DTA will prevail over the provisions of the Act and consequently, provisions of the ICDS will not apply. Dividends:- Dividends are recognised in accordance with the provisions of the Act. It has been defined inclusively by section 2(22) of the Act. It includes certain distributions and payments. Although, dividends in respect of which dividend distribution tax is paid under section 115-O of the Act are exempt under section 10(34) of the Act, dividends received from a foreign company are chargeable to tax. Similarly, the amount deemed to be dividend under section 2(22)(e) of the Act is not subject to dividend distribution tax and is chargeable to tax. Dividends, when chargeabl....