TaxTMI 
TaxTMI 
2025 (2) TMI 221
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....ble income of Rs. 51,14,000/-. Later, the RoI was selected for scrutiny and the AO noted that the assessee had entered into an agreement with M/s. Lexis Nexis Butterworths India (hereinafter in short "M/s. Lexis Nexis" or M/s LN) on 19.05.2011 for providing judgments of various Courts/Tribunals. And for the said service, the assessee was to receive total compensation of Rs. 10,49,86,877/- and out of which, the assessee has received only Rs. 7,35,00,000/- in AY 2012-13 and during the relevant AY 2013-14, the assessee didn't receive the balance amount of Rs. 3,14,86,877/- but received only Rs. 1,13,09,280/-. The AO was of the view that as per the agreement between the assessee and M/s. Lexis Nexis for the services rendered, the assessee ought to have received Rs. 3,14,86,877/- and since the assessee has only offered Rs. 1,13,09,280/- during the year under consideration from M/s. Lexis Nexis, the balance amount of Rs. 2,01,77,597/- needs to be added by the AO as income accrued to the assessee since it was following mercantile system of accounting and added it. 4. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who was pleased to delete the addition by holding as unde....
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....o the appellant only when it becomes a liability of the other party (LN). The fact that the LN has not deducted the tax on any amount over and above Rs. 1,13,09,280/-, no other income has accrued to the appellant though there is a provision in the agreement but the appellant has been able to prove that the provision in the agreement is subjective in nature and comes into play only if entire data submitted by the appellant is inspected and accepted by LN. As LN has accepted only 47,122 judgments for which the appellant has invoiced and the same has been accepted by LN, there is no further scope for addition only on the basis of provision in the agreement. Accordingly, the addition of Rs. 2,01,77,597/- made by the AO stands deleted. Ground No.2 is allowed. 5. Aggrieved, the Revenue is in appeal before this Tribunal. 6. We have heard both the parties and perused the material available on record. The assessee is the sole proprietor of "Cyber Law Journal" which provides legal assistance to lawyers and other similar professionals and business houses by way of publication of case laws. For the AY 2013- 14, he filed his RoI on 30.09.2013 admitting taxable income of Rs. 51,14,000/-, and t....
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.... materials and Clause 4 deals with compensation which clauses are relevant for adjudication of the issue before us and it would be gainful to reproduce Clause 4 which reads as under: 4. COMPENSATION 4.1. As payment in full for the perpetual license granted to LN and its Affiliates, including LexisNexis, for their use of the Licensed Materials and for Licensor's obligations under this Agreement, LN will pay to Licensor a one-time fee of up to INR 10, 49, 86, 877 (Ten Crore forty nine lakhs eighty-six thousand, eight hundred seventy seven Indian Rupees) ("One- Time Fee") and the taxes thereon as specified herein, payable as set out below. 4.2. LN shall pay the one-time fee as follows: (a) Upon LN's completion of its review of the Enhanced Data portion of the Licensed Materials under Section 2 above and related acceptance of such Enhanced Data portion of the Licensed Materials as provided in that Section, Licensor will - using the form of invoice set out on Schedule C - invoice LN for a portion of the One-Time Fee equal to INR 7, 35, 00, 000 (Seven Crore thirty five lakhs Indian Rupees) plus applicable Service Tax (10.3%) and VAT (4%). LN shall, within 24 hours after its recei....
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....o the above mentioned Agreement. iii) The licensed materials covered by sub-clause i) and ii) above are to be loaded in a laptop in the format and in compliance with the specifications set out in Schedule B to the above referred Agreements between the parties. iv) The next step is for LN to carry out inspection by performing tests of the licensed materials on the laptop to satisfy itself with respect to all aspects of the Licensed materials including quality, quantity, completeness, format, consisting in thẻ matter of description, etc., compliance with specifications/requirements set out in schedule B to agreement under reference. v) Communicating to Licensor acceptance and/or rejection of Licensed Materials in the prescribed form (Schedule D to the Agreement under reference) after completion of inspection. Clause 2.4 emphasises that LN should provide its acceptance and/or rejection to the Licensor in writing after its review duly stating the reasons for rejection. 9. And the next step is for the Licensor (assessee) to- 1) Raise the invoice for the accepted materials in the prescribed form on LN for the fee due as per Clause 4 dealing with "Compensation" in the Agr....
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....Year 2013-14. The Ld.CIT(A) rightly appreciated that clause 4.2(a) provided for payment of Rs. 7,35,00,000/- as one-time fee for Enhanced Data which was paid to the assessee in previous year (AY 2012-13) whereas for the relevant AY 2013-14, only on satisfaction of conditions under clause 4.2 (b) payment of one-time fee for the subsequent data of Rs. 240/- per judgment delivered to the satisfaction of M/s. Lexis Nexis. The assessee received Rs. 1,13,09,280/- for 47,122 judgments after inspection/review & acceptance of the materials by M/s. Lexis Nexis. Therefore, the Ld.CIT(A) corrected the error of the AO based on terms of clause 4.2(a) instead of Clause 4.2(b). Moreover, the Ld.AR has filed the copy of the M/s. Lexis Nexis letter dated 27.03.2012, wherein, in no uncertain terms it was stated by it that the subsequent data that has been provided by assessee didn't meet the requirement of the agreement, including the specification in Schedule-B and as such payment is not due Considering the discussion supra, we concur with the Ld CIT(A) that the AO erred in concluding that Rs. 2,01,77,597/- accrued to the assessee in the facts of the case. And it is well settled that income can be s....