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TMI Blog2018 (2) TMI 1773X X X X Extracts X X X X X X X X Extracts X X X X ..... in the month of March 2010, had actually been received by the appellant during the next financial year and booked as purchases by the appellant. Even otherwise, the assessee has offered the income in the subsequent year and the company does not have differential rate of taxation for both the years. Therefore, as such the issue is tax neutral. However, despite the tax neutrality factor, we do not find any infirmity in the order of the Ld. CIT (A) in deleting the above disallowance on its own merit. In the result, the solitary ground of appeal of the revenue is dismissed. - ITA No. 5878/Del/2015 - - - Dated:- 7-2-2018 - SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For the Appellant : Shri Arun Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not been offered for taxation. The Ld. AO raised the query that as assessee is following the mercantile system of accounting why the above advance amount should not be treated as a commission income accrued. The assessee submitted a note on advance commission income in which it has been stated that the company accounts for credit note with full amount and reduced by the amount of incentive commissions for which material is not received in the financial year. The amount, which is reduced from the incentive commission, is credited to advance commission received account. The Ld. assessing officer rejected the explanation of the assessee, as on perusal of the purchase details filed by the assessee does not reflect any such system. He therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion that the right to receive commission accrues in respect of those purchases which were received in the subsequent years in the preceding year in the case of the assessee , the Ld. CIT (A) has recorded a conflicting opinion and taken opposite stand that the advance commission is to be taxed on Mercantile basis. However the Ld. CIT (A) deleted the above addition in view of the accounting treatment regularly followed by the appellant. He also took the support of the decision of the Hon ble Delhi High Court in Dinesh Kumar Goel 197 Taxmann 375 wherein it was held that the relevant yardstick is the time of accrual or receipt for the purpose of its taxation. 6. The Ld. departmental representative vehemently supported the order of the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he orders of the lower authorities. The only issue involved in this appeal is whether the amount shown as advance commission income of ₹ 5418000/ is chargeable to tax in this year or in the subsequent year as offered by the assessee. The brief facts of the case shows that assessee is earning commission income in respect of goods which are in transit which accrues in the year in which the goods are actually received and booked as purchases by the company. It is in consonance with the accrual system of accounting and the matching concept followed by the assessee. Naturally, the income accrues in the year in which there is a right to receive such income and not when it is actually received. It is not in dispute that the goods are receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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