Delhi HC confirms ITAT
order holding that the amount received by assessee (engaged in providing basic
telecom services) on sale of prepaid cards to the extent of unutilized talk
time did not accrue as income in the year of sale i.e. AYs 2003-04, 2004-05
& 2009-10; Approves assessee’s mode of recognizing revenue on prepaid cards
on the basis of actual usage and carrying forward unutilized amount outstanding
on the prepaid cards to the next year in view of the matching principles for
revenue recognition as enshrined in the Accounting Standards, rejects Revenue’s
stand that assessee must account for the entire amount; However, HC states that
Revenue’s contention that the prepaid amount once paid and received by assessee
was forgone by the subscriber and accordingly appropriated by assessee is
substantially correct; At the same time, HC clarifies that “the payment was an
advance and was subject to the respondent-assessee providing basic telecom
service as promised, failing which the unutilized amount was required to be
refunded to the pre-paid subscribers” under the ordinary law of contract or
special enactments like the Consumer Protection Act; Lastly, HC rules that “unutilized
amount when the prepaid card lapses has to be treated as income or receipt of
the respondent-assessee on the date when the card had lapsed.”:HC
Subscribe to:
Post Comments (Atom)
India Tax Due Date - February 2026.
Sr No Due Date Related to Compliance to be made 1 11.02.2026 GST ...
-
A new website launched for TDS related matters www.tdscpc.gov.in TRACES – T DS R econciliation A nalysis and C orrection E nabling S yste...
-
The Income-tax Appellate Tribunal has recently notified the Income-tax (Appellate Tribunal) Amendment Rules, 2025, introducing important p...
-
Introduction Employee welfare is a cornerstone of corporate responsibility, and gratuity forms a critical part of the social security benefi...
-
The overall effective tax rate of a U.S. multinational corporation may have significant impact on the value of its stock. Therefore, it ...
-
A tax investigation is one of the most stressful events a company can face. It disrupts operations, consumes resources, and carries signific...
-
This is to update you about an important decision by Hon’ble Madras High Court (‘ HC ’/’ Court ’) in the case of ARS Steel and Alloy Inte...
-
LEASE-DEED (A brief Introduction) Lease defined. A lease of immovable property is a transfer of a right to enjoy such property, mad...
-
Mergers and Acquisitions (M&A) are no longer confined to large conglomerates. Mid-market deals, family-owned businesses, PE-backed exits...
-
In a ruling that provides crucial clarity on the taxation of foreign enterprises in India, the Delhi bench of the Income Tax Appellate Tri...
-
Clarifications from the GST Council The GST Council has recommended the following clarifications on ISD and cross charge:
No comments:
Post a Comment