TaxTMI 
TaxTMI 
2025 (6) TMI 1375
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.... has General grounds 1. erred in determining the total income of the Appellant at Rs 66,36,26,680 as against revised total income of Rs 57,28,77,760 offered by the Appellant during the rectification proceedings under Section 154 of Act. Income wrongly offered to tax twice of Rs 9,07,48,926 is required to be reduced from total income 2. erred in rejecting the Appellant's claim that Rs 9,07,48,926 was inadvertently offered to tax twice which was intimated to the Learned Assessing officer during the rectification proceedings under Section 154 of Act. 3. Without prejudice to Ground 2 above, erred in rejecting the fresh and additional claim submitted by the Appellant during the course of the appellate proceedings on the ground that....
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.... under consideration. The assessee made the following submissions before the CIT(A) with regard to inadvertent offering of excess income - "The appellant prays that income of Rs 9,07,48,926 (which has been inadvertently offered to tax twice) ought to be allowed as deduction while computing business income of the subject AY. The appellant in it's submissions stated that income of Rs 9,07,48,926 has been inadvertently offered to tax twice. The appellant submitted that in respect of unbilled revenue recorded in the books of accounts that it follows a mercantile method of accounting for the purpose of maintaining its books of accounts and hence on a year on year basis, the Appellant accrues unbilled revenue with respect of the contracts....
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.... FY 2018-19 thereby offering the same income to tax twice i.e. one at the time of accrual in the respective years as specified at point 15 and second time at the time of raising the invoice i.e. FY 2018- 19. 18. Given the above, your goodself would appreciate that once an income has been taxed on accrual basis, it should not be once again taxed at the time raising the invoice. Reversal of accrued revenue in FY 2019-20 (AY 2020-21) 19. We wish to inform to your goodself that the said error was identified at the time of preparation of books of accounts for FY 2019-20. Further, since the statutory accounts of FY 2018-19 were already closed, the amount of Rs 9,07,48,926 was reversed from the revenue of FY 2019-20 i.e. the year in which su....
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....ring the Financial Year (FY) 2018-19 and accordingly reduced the revenue to the tune of Rs. 9,07,48,926/- (page 55 of PB) from the revenue of FY 2019-20. The ld. AR further submitted that the amount thus reduced is added to the income in the statement of computation and accordingly offered to tax for AY 2020-21. The ld. AR in this regard drew our attention to the computation of total income in page 43 of PB. The ld. AR accordingly submitted that the revenue offered to tax in AY 2019-20 i.e. the year under consideration excess stated to the tune of Rs. 9,07,48,926 since the assessee failed to reverse the unbilled revenue once the invoice is raised on the party. Therefore, the ld. AR submitted that the amount of Rs. 9,07,48,926/- has been tax....
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....s submitted that this error is noticed while finalising the accounts for the subsequent FY i.e. year ending 31.03.2020. The relevant observations of the auditors in this regard is extracted below - "Note 22: Unbilled revenue written off The Company had accounted for the unbilled revenue in respect of the contract with the customer viz., Hindustan Thompson Pvt. Ltd. ('HTPL') as follows: Financial Year ('FY') to which accrued revenue relates Amount INR 2016-17 7,27,30,790 2017-18 41,89,092 2018-19 2,23,46,370 Total 9,92,66,252 Against the aforesaid unbilled revenue, the Company raised invoices on HTPL, amounting to INR 9,07,48,926/-in the FY 2018-19. However, on raising the invoices, the entries towards unbilled revenue i....