9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (8) TMI 1138 - AT - Income TaxReceipt of fixed deposit and the compensation of the spread-over period - Deemed to be a ccrual of Income or Not - Freezer deposit - HELD THAT - The agency agreements in the instant case are live and continuing. Accordingly, we hold that the deposits collected from vendors cannot be considered as income of the assessee so long as the agency agreement continues. Accordingly, we set aside the order of the Ld. CIT(A) on this issue and direct the Assessing Officer to delete the addition relating thereto. In the result, the appeal filed by the assessee is allowed.
Issues:
Whether the freezer deposit received from various dealers should be assessed as income of the assessee. Analysis: The appeal was against the order passed by the Ld. CIT(A)-I, Kochi, relating to the assessment year 2007-08, regarding the assessment of the freezer deposit received from dealers as income. The only issue raised in the appeal was the justification of confirming that the freezer deposit should be assessed as income. During the hearing, the Ld. Counsel for the assessee presented a previous order by the Tribunal in a similar case, where it was decided in favor of the assessee. The Tribunal observed that the deposits received were for the supply of freezers, necessary for the business, and were attached with a liability. The accrual of income would only arise upon termination of the agreement, and until then, it cannot be considered as income. The Tribunal relied on various judgments supporting the plea of the assessee and set aside the orders of the authorities, allowing the ground of the assessee. The Tribunal held that as long as the agency agreements with the vendors are live and continuing, the deposits collected from vendors cannot be treated as income of the assessee. The Ld. A.R emphasized that the agency agreements were ongoing, and in line with the previous decision, the Tribunal directed the Assessing Officer to delete the addition related to the freezer deposits. Consequently, the appeal filed by the assessee was allowed, and the order of the Ld. CIT(A) on this issue was set aside, instructing the deletion of the addition concerning the freezer deposits. The decision was pronounced on 08-08-2012 by the Tribunal.
|
