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TMI Blog2023 (7) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee offering the aforementioned amount for the tax in the subsequent period. This position of law appears to have been, in a sense, recognized by the coordinate bench of this court in a judgment rendered in Commissioner of Income Tax-III vs Shyam Telelink Ltd. [ 2018 (12) TMI 585 - DELHI HIGH COURT ]. Thus the proposed question no. (i) in our opinion does not require consideration. Addition on account of provision for liquidated damages - We have in another appeal of the revenue [ 2023 (8) TMI 591 - DELHI HIGH COURT ], remanded the matter to the Tribunal for reconsideration. Tribunal, in the instant case, has followed decision rendered by it in AY 2004-05, which is the AY that is involved in the matter we have remanded for reconsideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder which discloses the breakup of Rs. 1,02,88,91,000/-, which is shown as unearned revenue by the respondent/assessee. For the sake of convenience, the said table is extracted hereafter: Customer Name Unearned Revenue recognized in Financial statements as on March 31, 2010 (Amount in INR) Details of Revenue deferment Bharti Airtel Limited 8,55,37,789 Tata 51,04,09,155 Refer Appendix I Vodafone 10,48,30,713 Refer Appendix II Idea 3,63,91,093 Refer Appendix III Bharat Sanchar 27,85,70,650 Other 1,31,51,655 Grand Total 1,02,88,91,055 5. Furthermore, we find that the Tribunal has returned a finding of fact that these very amounts were offered to tax in the subsequent year, as and when services were offered. This is evident on perusal of parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bench of this court in a judgment rendered in Commissioner of Income Tax-III vs Shyam Telelink Ltd., [2019] 101 Taxmann.com 218 (Delhi). The relevant observations made in the said judgement, are extracted hereafter: 15. On the question of application of the accounting principles, Section 145 of the Act and mandate of the Companies Act and paragraph 9 of the Accounting Standards, in Dinesh Kumar Goel (supra) it was observed: 28. Reading of the aforesaid (AS) 9 makes it clear that revenue is recognized only when the services are actually rendered. If the services are rendered partially, revenue is to be shown proportionate with the degree of completion of the services. This really clinches the issue in favour of the assessee. 29. Though our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this kind. But, obviously, judging from the references that come up to us every now and then, the Department appears to delight in raising points of this character which do not affect the taxability of the assessee or the tax that the Department is likely to collect from him whether in one year or the other. 17. In Bilahari Investment (P) Ltd. (supra), the Supreme Court had elucidated that revenue recognition was attainable by several methods of accounting. The same result could be attained by any one of the accounting methods. Completed contract method was one such method. Similarly, percentage of completion method was another such method. Percentage of completion method tries to attain periodic recognition of income in order to reflec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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