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| The Tax Publishers2020 TaxPub(DT) 4259 (Del-Trib) INCOME TAX ACT, 1961
Section 145
Where assessee had been consistently following AS--9 dealing with revenue recognition issued by ICAI then, assessee's submission was tenable in as much as it had not accounted for the claim against Contractors/Third Parties for Rs. 3 crores pending its realization due to inherent uncertainty in the ultimate realization of said amount. Accordingly, disallowance could not be sustained.
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Accounting method - Revenue recognition - AO made disallowance on account of claim against Contractors/Third Parties - Assessee following AS-9
Assessee was a Corporation incorporated under section 3 of the Warehousing Corporation Act, 1964 for the purpose of marketing of commodities. AO made disallowance of Rs. 3 crores on account of claim against Contractors/Third Parties. Assessee's case was that amount under question had been duly disclosed by assessee corporation in its notes to accounts in Point No. 18 wherein it has been stated that Corporation had not accounted its claim against Contractors/Parties for Rs. 3 crores lakhs pending its realization. Held: Assessee had been consistently following AS--9 dealing with revenue recognition issued by ICAI. Thus, assessee's submission was tenable in as much as it had not accounted for the claim against Contractors/Third Parties for Rs. 3 crores pending its realization due to inherent uncertainty in the ultimate realization of said amount. Accordingly, disallowance could not be sustained.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2007-08
INCOME TAX ACT, 1961
Section 37(i)
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