Income Recognition from Arbitral Award: Tribunal Upholds Taxpayer's Approach for 2019-20 Amid Legal Precedents.

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....The case pertains to the treatment of income received from an arbitral award in the assessment year. The AO passed an assessment order u/s 143(3) after the case was selected for scrutiny through CASS. The ITAT recorded that the AO issued a statutory notice u/s 142(1) with a specific query about the Nardana Claim-1 & Nardana Claim-2, and the assessee filed a cogent reply. The AO's approach in accepting the assessee's explanation regarding the recognition of liability for Nardana Claim-1 & Nardana Claim-2 as income in the AY 2018-19 was found sustainable. The amount was paid to the assessee in AY 2018-19 after furnishing a 100% bank guarantee on 100% margin, and it was rightly shown as a liability in the balance sheet. The income was shown in.........