TaxTMI 
TaxTMI 
2010 (7) TMI 1157
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....in shipping business and is owner of one inland going ship. During the year under consideration the Assessing Officer called for details of receipts of freight and he found that the assessee has received Rs. 37,43,300 from M/s. Ajmera Cement Pvt. Ltd. on this account. The Assessing Officer called for a copy of report of M/s. Ajmera Cement Pvt. Ltd. u/s. 133(6) of Income-tax Act, 1961 and compared the same with the ledger account of this party as appearing in the books of account of the assessee. The Assessing Officer found that the assessee has not accounted for bill No. PLS/12 dated 31.3.2004 of Rs. 3,38,250/- in its books of account. According to the Assessing Officer this bill has been issued by the assessee and received by M/s. Ajmera C....
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....d for at the time of issue, this particular bill was not accounted for on the same basis. The appellant also could not explain that it has accounted for bills on same basis in the earlier year or in the subsequent year. The bill has been issued by the appellant on 31.3.04. The same has also been received by M/s. Ajmera Cement P. Ltd. on the same date and treated as expenses by M/s. Ajmera Cement P. Ltd. in the financial year 03-04. Accordingly the Assessing Officer has rightly held that the income has accrued to the appellant at the time of issue of this bill. The action of the Assessing Officer is upheld. This ground of appeal not allowed. Aggrieved with such order of the CIT(A), the assessee is in appeal before us. 6. The learned co....
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....sted in the assessee it is said to accrue or arise. Referring to the decision of the Hon'ble Bombay High Court in the case of CIT vs. Ace Builders Pvt. Ltd. reported in 202 ITR 324, she submitted that the Hon'ble Court in the said decision has held that income is held to accrue only when the assessee acquires a right to receive that income. In other words, income can be said to accrue on the date when the debt becomes due. Unless the right to profit comes into existence there is no accrual of profit. She submitted that the assessee in the instant case has received the amount as an advance against future services. Since the amount received does not accrue till such services are rendered the same has to be shown as advance and not as revenue ....
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....ril, 2004, the amount was rightly treated as advance as on 31st March, 2004 and has been declared as income only in the subsequent assessment year. Therefore, the question involved in the impugned case is as to whether the amount of Rs. 3,38,250 should be included in the total income for A.Y. 2004-05 or for A.Y. 2005-06. On being questioned by the Bench, the learned counsel for the assessee filed copies of the return of income for the A.Y. 2005-06 to substantiate that the above receipt of Rs. 3,38,250 has been declared as income in the said assessment year. Further we find the assessee has filed its return for A.Y. 2004-05 declaring loss of Rs. 20,91,860 and for A.Y. 2005-06 declaring loss of Rs. 40,44,340. Therefore, whether the above amou....