TaxTMI 
TaxTMI 
2022 (4) TMI 1459
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.... issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in treating the advance received from customers as income of the previous year relevant to this assessment year without considering the fact that it did not accrue to the assessee during the relevant year. For this, assessee has raised following Ground No.2:- 2. Advance from customers 2.1 The CIT(A) erred in confirming the treatment of advance received from customers amounting to Rs.32,46,007 as income of the previous year relevant to the above assessment year without considering the fact that it did not accrue to the Appellant during the relevant year. 2.2 The CIT(A) ought to have appreciated that the revenue recognition has been made by the Appellant in accordance with the method prescribed by Accounting Standard 9 issued by the Institute of Chartered Accountants of India and the same method has been regularly employed by the Appellant. 2.3 The CIT(A) ought to have appreciated that merely because the Appellant has received the entire amount in advance shall not mean that the Appellant is entitled to such income during the relevant assessment y....
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....held as advance received. To this extent, the representation made by the assessee is held as incorrect and self-serving. The explanation is rejected and the revenue received of Rs.32,46,007/- is brought to tax in the assessment year 2012-13 itself on account of the corresponding services already rendered in the same assessment year. The grounds of appeal are rejected on this issue." Aggrieved, assessee is in appeal before the Tribunal. 6. Before us, the ld.counsel for the assessee stated that exactly identical issue is covered in assessee's favour in assessee's own case for assessment year 2007-08 in ITA No.2560/Chny/2017, order dated 17.10.2018, vide para 7 and the relevant portion reads as under:- "However we are of the considered view that the views adopted by the Ld.AO as well as the views of the Ld.CIT(A) is erroneous. As per the provisions of the Act, there is no concept with respect to deferred expenditure. Therefore the entire expenditure incurred for earning revenue for the relevant assessment year and the revenue spilled over to the succeeding assessment year is allowable as deduction for the relevant assessment year when the expenditure incurred in the rel....
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.... from the previous assessment years for set-off against the income computed under normal provisions of the Act. 10. At the outset, the ld.counsel for the assessee took us through the statement of facts and grounds of appeal raised before CIT(A). The ld.counsel for the assessee subsequently drew our attention to ground nos. 5.1 & 5.2 raised before CIT(A), which reads as under:- Set off of loss of earlier years 5.1 Without prejudice to the above grounds raised, the AO having arrived at assessed income of Rs.3,84,07,949 erred in not setting off the brought forward business losses against the assessed income. 5.2 The AO failed to appreciate that the Appellant had huge brought forward loss from the earlier assessment years and if the same is set off there will not be any taxable income and consequently there will not be any tax demand. Subsequently, the ld.counsel stated that these two grounds were not at all adjudicated by CIT(A) or not at all considered. He took us through the order of CIT(A) but we noted that CIT(A) has not adjudicated this issue. 11. When these facts were confronted to ld. Senior DR, he stated that the issue can be remanded back t....
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....dering the fact that the said amount has already been offered in the assessment year 2012-13 and therefore the addition amounts to taxing the income twice. 2.2 The CIT(A) ought to have appreciated that there is a change in the revenue recognition policy during the year with respect to subscription received from customers whereby the subscription received has been recognised in proportion to the services rendered from month on month to day by day basis. 2.3 The CIT(A) failed to appreciate that the change in the method of accounting is necessitated to adhere to the Generally Accepted Accounting Principles and there is no violation of principles of accountancy. 2.4 The CIT(A) failed to appreciate that the revenue has been included in two financial years i.e. FY 2011-12 and 2012-13 (relevant AY 2012-13 and AY 2013-14) and only to remove the cascading effect the amount has been reversed and excluded from the profits of the above assessment year. 2.5 The CIT(A) ought to have appreciated that the amount of Rs.7,01,42,914 has been offered as income in AY 2012-13 hence there is no revenue loss. 2.6 The CIT(A) failed to consider the details of the....
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....s to disallowance of advertisement expenses for nondeduction of TDS u/s.195 of the Act, i.e., payment made to nonresident by invoking the provisions of section 40(a)(i) of the Act. For this, assessee has raised identically worded grounds in both the years and the facts are exactly identical in both the years except the quantum. Hence, we will take the facts from assessment year 2014-15 in ITA No.1393/CHNY/2019. The relevant ground raised reads as under:- 2. Disallowance of advertisement charges 2.1 The CIT(A) erred in upholding disallowance of advertisement charges of Rs.2,45,32,108 paid to Facebook Ireland Limited under section 40(a)(i) of the Income-tax Act, 1961 ("Act"). 2.2 The CIT(A) erred in concluding that tax should be deducted on any payment to non-resident without appreciating that tax is required to be deducted only if the same is chargeable to tax in India under section 195 of the Act. 2.3 The CIT(A) ought to have appreciated that the income did not accrue or arise to the non-resident in India. 2.4 The CIT(A) ought to have appreciated that the payment is for online advertisement and the services provided by the non-resident d....
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....A Nos.615 to 620/Bang/2020 considered the decision of Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt. Ltd., vs. CIT, Civil Appeal Nos.8733-8734 of 2018, dated March 02, 2021 (125 taxmann.com 42) wherein the Hon'ble Supreme Court exactly on same facts held that there is no requirement to deduct tax at source from the advertisement payments made for using the information technology facility u/s.195 of the Act. The ITAT, Bangalore in the case of Urban Ladder Home Décor Solutions Pvt. Ltd supra has considered this issue vide para 20 to 25 as under:- 20. In the case of Engineering Analysis Centre of Excellence (P) Ltd (supra), the issue related to "issuing of license to use software", i.e., the software purchased by a person shall be used by the buyer for his own business purposes. Since the license was granted without parting the copy rights attached to the software, the Hon'ble Supreme Court held that the payments received by the non-resident software companies cannot be taxed as "royalty" under the provisions of DTAA and hence there is no requirement to deduct tax at source from the payment made to them by a resident assessee. ....