CL Educate Ltd., Delhi V. DCIT, New Delhi

ITA 1697/DEL/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9951 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-01-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 24-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEKAR
• Assessee Lawyers: SHIKHA SHARMA
• Keywords: Depreciation; Question of law
• Section: 142(1); 260A; 194C; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO.1697/DEL/2014 (ASSESSMENT YEAR - 2010 - 11) CL EDUCATE LTD., R - 90, GREATER KAILASH, PART - 1, DELHI - 110048 PAN - AAACC3885C (APPELLANT) VS DCIT, CIRCLE - 3(1), NEW DELHI. (RESPONDENT) APPELLANT BY SH. AJAY VOHRA, ADV. & MS. SHIKHA SHARMA, ADV. RESPONDENT BY SH. VIVEK WADEKAR, CIT DR ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 14.02.2014 OF CIT(A) - VI, NEW DELHI PERTAINING TO 2010 - 11 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: - 1. ADDITION OF RS.16,16,61,424/ - ON ACCOUNT OF NON - REFUNDABLE PORTION OF ADVANCE FEE OF BY THE ASSESSING OFFICER AND CONFIRMATION OF THE SAME BY THE CIT(A) IS CONTRARY TO FACTS AND LAW AND THEREFORE, THE ADDITION IS LIABLE TO BE DELETED. 2. ADDITION OF RS.1 6, 16,61,424/ - ON ACCOUNT OF NON - REFUNDABLE PORTION OF ADVANCE FEE OF BY THE ASSESSING OFFICER AND CONFIRMATION OF THE SAME BY THE CIT(A) HAS RESULTED IN DOUBLE ADDITION OF RS.16, 16,61,424/ - , WHICH HAS ALREADY BEEN OFFERED BY THE APPELLANT FOR TAXATION IN THE FOLLOWING ASSESSMENT YEAR I.E. AY 2011 - 12 ON ACCOUNT OF RECOGNITION OF THE AMOUNT BY THE APPELLANT AS INCOME IN THAT YEAR AND THE DEPARTMENT ALSO HAS ACCEPTED IT AS INCOME IN ASSESSMENT IN AY 2011 - 12. 3. THE FINDING OF THE COMMISSIONER OF INCOME TAX (APPEAL) IN PARA 5.1 AT PAGE 9 OF HIS ORDER THAT 'THE PRINCIPLES OF RES JUDICATA ARE NOT APPLICABLE TO INCOME TAX PROCEEDINGS AND MOREOVER, THIS ISSUE IS YET TO ATTAIN ITS STAGE OF FINALITY IN THE JUDICIAL FORUM' IS CONTRARY TO FACTS AND LAW AS FAR AS (A) THAT THE JUDICIAL RULING OF THE HON'BLE SUPREME COURT IN CASE OF RADHASOAMI SATSAG VS CIT 193 ITR 321 HAS NOT BEEN CONSIDERED, WHEREIN IT HAS BEEN HELD THAT THE DEPARTMENT CANNOT TAKE A U TURN ON A CONSISTENT POLICY FOLLOWED BY THE ASSESSEE FOR DATE OF HEARING 3 1 .03.2015 DATE OF PRONOUNCEMENT 10 .0 4 .2015 2 I.T.A .NO. - 1697 /DEL/201 4 NUMBER OF YEARS AND ACCEPTED BY THE DEPARTMENT IN SPITE OF THE FACT THAT THE PRINCIPLE OF RES JUDICATA IS NOT APPLICABLE TO INCOME TAX PROCEEDINGS. APPELLANT HAS BEEN FOLLOWING THIS CONSISTENT POLICY OF OFFERING THE REVENUE FOR TAXATION, IN THE YEAR IN WHICH SERV ICES ARE RENDERED BY HIM TO THE CUSTOMERS, SINCE 1995. (B) THAT THE FOLLOWING PRECEDING JUDICIAL RULINGS, IN THE CASE OF THE APPELLANT ITSELF, HAVE NOT BEEN CONSIDERED TO JUDGE THE FINALITY OF THE ISSUE IN THE JUDICIAL FORUM (I) ORDERS OF THE HON'BLE ITAT IN AY 2006 - 07, WHEREIN THE ISSUE WAS DEALT IN DETAIL AND WAS DECIDED IN FAVOR OF THE APPELLANT, WHICH WAS FOLLOWED BY THE HON'BLE ITAT IN AY 2007 - 08, 2008 - 09 AND 2009 - 10. (II) ON AN APPEAL FILED BY THE DEPARTMENT U/S 260A FOR AY 2006 - 07, THE HON'BLE DELH I HIGH COURT DID NOT ADMIT THE QUESTION OF LAW ON THIS ISSUE (III)THE DEPARTMENT DID NOT FILE AN APPEAL WITH THE HON'BLE SUPREME COURT AGAINST THE NON ADMITTANCE OF THE QUESTION OF LAW ON THIS ISSUE BY THE HIGH COURT. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY OF THE GROUNDS OF APPEAL. 2. THE RELEVANT FACTS OF THE CASE IN THE YEAR UNDER CONSIDERATION ARE , THAT THE ASSESSEE COMPANY AS IN THE EARLIER YEARS CONT INUES TO BE ENGAGED IN PROVIDING EDUCATION AND TRAINING FOR VARIOUS PREPARATORY EXAMINATION LIKE IIM, IIT ETC. THROUGH EDUCATIONAL CENTRES RUN BY ITSELF OR BY THE FRANCHISEE ON ITS BEHALF ACROSS THE COUNTRY . I NCOME OF RS.7,66,99,443/ - W AS RETURNED BY FILING OFF A RETURN. THE SAID RETURN WAS SUBJECTED TO SCRUTINY ASSESSMENT BY WAY OF ISSUANCE OF NOTICE U/S 143(2) & 142(1) ETC WHEREIN THE ADDITION OF RS.16,16,61,424/ - W AS MADE IN VIEW OF THE FACT THAT IN SCHEDULE 8 OF THE BALANCE SHEET THE ASSESSEE HAD SHOWN UNEARNE D REVENUE AS CURRENT LIABILITY. THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE SAME . CONSIDERING THE EXPLANATION OF THE ASSESSEE DATED 08.03.2013 WHICH IS EXTRACTED IN THE ASSESSMENT ORDER ITSELF THE AO REJECTED THE SAME FOR THE FOLLOWING REASONS : - THE REP LY OF THE ASSESSEE CO. HAS BEEN CONSIDERED AND THE SAME IS NOT ACCEPTABLE BECAUSE OF THE FOLLOWING REASONS: I) THE ASSESSEE HAS STATED THAT CONSISTENTLY THE ASSESSEE IS FOLLOWING THE POLICY OF NOT SHOWING THE ADVANCE FEE AS INCOME AND THE SAME IS SHOWN I N THE SUBSEQUENT YEAR. IN THIS REGARD IT IS STATED THAT THE PRINCIPAL OF RE - JUDICATA DOES NOT APPLY TO THE INCOME TAX PROCEEDINGS AND, THEREFORE, THE AO IS AT LIBERTY TO COMPUTE INCOME OF THE ASSESSEE. II) THE ASSESSEE HAS STATED THAT THE ASSESSEE IS REGU LARLY FOLLOWING THIS METHOD OF ACCOUNTING AND, THEREFORE, THE SAME IS AS PER SECTION 145 OF THE LT. ACT, 1961, THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION CAN NOT BE RIGHTLY COMPUTED AS PER THE ACCOUNTING POLICIES FOLLOWED BY THE ASSESSEE. THE ACCOUNTING SYSTEM AND PROVISION OF THE I.T ACT, MAY NOT MARCH STEP BY STEP TOGETHER AS PER THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME 3 I.T.A .NO. - 1697 /DEL/201 4 COURT IN THE CASE OF TUTICORIN ALKALIS CHEMICALS & FERTILIZERS LTD. VS CIT (SC) 227 1TR 172. III) THE ASSESSEE HAS STATED THAT THE ADVANCE FEE RECEIVED DURING THE YEAR HAS BEEN OFFERED FOR TAXATION IN THE NEXT YEAR. EACH ASSTT. YEAR IS A SEPARATE UNIT AND, THEREFORE, THE INCOME OF THE ONE ASSTT. YEAR CANNOT BE DEFERRED TO THE SUBSEQUENT YEAR. THE TAXABILITY NORMALL Y DEPENDS ON THE METHOD OF THE ACCOUNTING POLICY EMPLOYED BY THE ASSESSEE. NOW IN THE INSTANT CASE OF THE ASSESSEE, THE ASSESSEE HAS BEEN REGULARLY FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND, THEREFORE, THE TAXABILITY OF THE ASSESSEE IS TO BE ASCERTAINE D ON ACCRUAL BASIS. THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE ASSESSEE WILL INCLUDE ALL INCOME, WHICH ACCRUES OR ARISES OR THE ASSESSEE ACQUIRED THE RIGHT TO RECEIVE INCOME. AS PER THE TERMS AND CONDITIONS OF THE ADMISSION AND THE REFUND POLICY, THE SAI D AMOUNT OF RS.16,16,61.424/ - IS THE NON - REFUNDABLE PORTION OF THE FEE AND, THEREFORE, THE INCOME HAS ACCRUED DURING THE YEAR. IV) THE ASSESSEE HAS STATED THAT FOLLOWING THE MATCHING PRINCIPLES OF ACCRUAL SYSTEM OF ACCOUNTING, THE REVENUE IS CONSIDERED I N THE NEXT YEAR AS THE COST OF IMPARTING SUCH EDUCATION WILL BE BORNE IN NEXT YEAR. IN THIS REGARD, IT IS STATED THAT CERTAIN EXPENSES INCURRED DURING THE YEAR LIKE EXPENSES DIRECTLY OR INDIRECTLY ATTRIBUTABLE TO STAFF INVOLVED IN THE ADMISSION COUNTER, AD VERTISEMENT EXPENSES, PROFESSIONAL FEES AND OTHER EXPENSES INCURRED FOR MATERIAL DEVELOPMENT FOR THE COURSE ARE PERTAINING TO THE ADVANCE FEE RECEIVED BY THE ASSESSEE. V) AS FAR AS ASSESSEE S ARGUMENT FOR SET OFF OF ADVANCE DURING THE SUBSEQUENT YEAR IS CO NCERNED, THE SAME CANNOT BE ALLOWED BECAUSE THE ASSESSEE HAS CONTESTED THE TAXABILITY OF ADVANCE FEE DURING THE CURRENT YEAR AS WELL AS THE PRECEDING YEARS. IF THE ASSESSEE WITHDRAWS THE APPEAL OR AGREES TO THE ADDITION THE SET OF SHALL BE PROVIDED SUBJEC T TO VERIFICATION OF ACCOUNTING OF ADVANCES IN THE SUBSEQUENT YEARS. VI) THE LD. CIT(A) HAS CONFIRMED THE ADDITIONS MADE DURING THE PRECEDING YEARS HOLDING THAT THE NON REFUNDABLE AMOUNT IS AN ASCERTAINED AMOUNT ON WHICH INCOME HAS ACCRUED. IT HAS FURTHER BEEN HELD THAT THE ASSESSEE HAS ATTAINED THE LEGAL RIGHT TO RECEIVE THE AMOUNT AND THE AMOUNT IS N OT REFUNDABLE AND PAYABLE BY THE ASSESSEE. THE SAME THEREFORE CANNOT BE SHOWN AS LIABILITY AND SHOULD BE CONSIDERED AS PART OF INCOME OF THE YEAR. IN VIEW O F THE ABOVE SAID DISCUSSION, THE NON - REFUNDABLE PORTION OF ADVANCE FEE OF RS.16,16,61,424/ - IS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. (ADDITION :R S.16,16,61,424/ - ) 3. AGGRIEVED BY THIS THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). HOWEVER THE CIT(A) AFTER DELIBERATING ON THE ISSUE CHOSE TO FOLLOW THE VIEW TAKEN BY THE RESPECTIVE CIT(A) S VI D E RESPECTIVE ORDERS DATED 13.06.2011 (200 8 - 09 ASSESSMENT YEAR) , 17.07.2012 IN 2009 - 10 ASSESSMENT YEAR CONCURRING WITH THE VIEW TAKEN B Y THE CIT(A) IN 2006 - 07 ASSESSMENT YEAR BY WHICH THE ACTION OF THE AO HAD BEEN UPHELD . 4. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4 I.T.A .NO. - 1697 /DEL/201 4 5. THE LD. AR REFERRING TO THE MATERIAL AVAILABLE ON RECORD INVITED ATTENTION TO THE COPY OF THE OR DER OF THE TRIBUNAL IN 2005 - 06, 2006 - 07 ASSESSMENT YEARS WHICH IS PLACED AT PAGES 12 TO 51 , I NVIT ING SPECIFIC ATTENTION TO PAGE 43 TO 50 IT WAS SUBMITTED THAT THE ITAT IN 2006 - 07 ASSESSMENT YEAR VIDE PARAS 12 TO 13.4 WAS PLEASED TO REVERSE THE FINDING OF T HE CIT(A) BY ALLOWING THE CLAIM OF THE ASSESSEE. INVITING ATTENTION TO PAGES 52 - 64 OF THE PAPER BOOK IT WAS SUBMITTED THAT THE ITAT VIDE ITS ORDER DATED 27.12.2010 C ONSIDERING THE DEPARTMENTAL S APPEAL ON IDENTICAL FACTS IN 2007 - 08, 2008 - 09 & 2009 - 10 ASSE SSMENT YEARS DISMISSED THE APPEAL WHILE DISCUSSING GROUND NO. - 4 RAISED BY THE DEPARTMENT AS WOULD BE EVIDENT FROM PAGE 57 OF THE PAPER BOOK PARA 9 WHEREIN FOLLOWING THE VIEW TAKEN IN 2006 - 07 ASSESSMENT YEAR THE DEPARTMENTAL APPEAL WAS DISMISSED. THE SPEC IFIC FINDING OF THE CO - ORDINATE BENCH IS REPRODUCED HEREUNDER FOR READY - REFERENCE : - 9. GROUND NO. 4 RELATES TO THE DELETION OF THE ADDITION OF RS.13,14,00,000/ - . THE FACTS RELATES TO THIS ISSUE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPARTING COACHING FOR VARIOUS ENTRANCE EXAMINATION. SOME OF THE COURSES OFFERED BY THE ASSESSEE ARE SPREAD OVER TWO ACCOUNTING PERIODS. THUS, PART OF THE FEES WHEN RECEIVED IS BOOKED AS ADVANCE FEE IN THE ACCOUNTING YEAR IN WHICH THE STUDENT IS ENROLLED. THE ADVANCE FEE PRESENTS THE FEE PERTAINING TO THE PERIOD FALLING IN THE NEXT ACCOUNTING YEAR WHEN THE EDUCATION/COACHING WAS ACTUALLY IMPARTED TO THE STUDENTS. THE ASSESSING OFFICER, HOWEVER, ADDED THE AFORESAID AMOUNT OF FEE BOOKED AS ADVANCE FEE AS INCO ME FOR THE RELEVANT ASSESSMENT YEAR. CIT(A) DELETED THE ADDITION FOLLOWING THE DECISION OF THE ASSESSEE S OWN CASE OF THIS TRIBUNAL IN ITA NO. 4924 AND 4925/DEL/2009 AS PER PARA 21 OF ITS ORDER BEFORE US. EVEN THOUGH, LD. DR VEHEMENTLY ARGUED BUT WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A) AND WE ARE OF THE VIEW THAT THIS ISSUE IS DULY COVERED BY THE DECISION OF THIS TRIBUNAL AND ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2006 - 07. WE ACCORDINGLY DISMISS THIS GROUND. 5. 1. INVITIN G ATTENTION TO PAPER BOOK PAGE - 3 TO 11 WHICH CONTAINS A COPY OF THE APPEAL FILED BY THE REVENUE U/S 26 0A BEFORE THE HON BLE HIGH COURT IN 2006 - 07 ASSESSMENT YEAR WHEREIN THE REVENUE SOUGHT FOR ADMISSION AND ADJUDICATION ON VARIOUS QUESTIONS OF LAW INCLUDIN G THE FOLLOWING QUESTIONS (V) AT PAGE 5 FOR ADMISSION : - (V). WHETHER THE ITAT RIGHTLY DELETED THE ADDITION OF RS.12,01,0000/ - MADE BY THE ASSESSING OFFICER ON THE RECEIPT OF NON REFUNDABLE ADMISSION FEE BY THE RESPONDENT FROM THE STUDENTS IN THE RELEVANT YEAR? 5 I.T.A .NO. - 1697 /DEL/201 4 5.2. REFERRING TO THE SAME IT WAS SUBMITTED THAT IT WAS NOT ADMITTED BY THE HON BLE HIGH COURT VIDE THEIR ORDER DATED 14.11.2011 AS PER PAPER BOOK PAGE 1 & 2 AS THE HON BLE HIGH COURT WAS PLEASED TO ADMIT ONLY THE FOLLOWING 2 QUESTIONS OF LAW: - 1. W HETHER THE RESPONDENT HAD FAILED/NEGLECTED TO DEDUCT TAX AT SOURCE UNDER SECTION 194C AND ACCORDINGLY SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 IS ATTRACTED? 2. WHETHER THE INCOME TAX APPELLATE TRIBUNAL IS RIGHT IN DELETING ADDITION OF RS.37,44,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF BONUS PAID TO THE DIRECTORS IN TERMS OF SECTION 36(1)(II) OF THE INCOME TAX ACT, 1961? 5.3 . IN THESE AFORESAID FACTS AND CIRCUMSTANCES, IT WAS HIS PRAYER THAT THE CONSISTENT VIEW ON THE ISSUE TAKEN BY THE ITAT ON FACTS SHOULD HAVE BEEN FOLLOWED BY THE CIT(A) AND HE HA D INSTEAD CHOSEN TO RELY UPON THE ORDER OF THE CIT(A ) IN 2006 - 07 ASSESSMENT YEAR WHICH WAS REVERSED BY THE IT AT VIDE ITS ORDER DATED 27.12.2010 COPY OF WHICH IS PLACED AT PAGES 12 TO 51 WHEREIN REVENUE HAS REFERRED THE MATTER BEFORE THE HON BLE HIGH COURT IN THE AFORE - MENTIONED QUESTION OF LAW WHICH HAS NOT BEEN ADMITTED , I N VIEW OF THE FACT THAT ON SIMILAR ISSU ES THE HON BLE HIGH COURT WAS CONSCIOUS O F THEIR VIEW TAKEN IN CIT VS. DINESH KUMAR GOEL 331 ITR 10 (DELHI) . INVITING ATTENTION TO PAPER BOOK PAGE - 65 FOR THE SA K E OF COMPLETENESS IT WAS HIS SUBMISSION THAT THE AMOUNTS MENTIONED IN COLUMN NO. - 3 OVER THE Y EARS HAVE BEEN OFFERED IN THE SPECIFIC YEAR AS WOULD BE EVIDENT FROM THE AMOUNT MENTIONED IN COLUMN NO. - 2 OF THE PAPER BOOK AND HE WOULD HAVE NO OBJECTION IF THIS FACT IS V ERIFIED . FOR READY - REFERENCE, WE EXTRACT THE FOLLOWING TABLE FROM PAGE 65: - CL EDUCATE LIMITED FINANCIAL YEAR FEE BILLING ADVANCE FEE REVENUE AS PER P&L A/C ADDITION MADE IN ASSESSMENT REMARKS 1 ST APRIL 31 ST MARCH (1) (2) (3) (4)=(1)+(2) - (3) (5)=(3) 2008 - 09 65,52,19,856 14,28,89,909 18,59,18,030 61,21,91,735 2009 - 10 57,97,23,970 18,59,18,030 16,16,61,424 60,39,80,576 16,16,61,424 ASSESSEE HAS TAKEN THIS AMOUNT AS HIS INCOME AND HAS PAID TAX THEREON IN SUCCEEDING FY (2010 - 11) AS SHOWN IN (2). 2010 - 11 60,18,24,076 16,16,61,424 15,00,32,898 61,34,52,602 15,00,32,898 ASSESSEE HAS TAKEN THIS AMOUNT 6 I.T.A .NO. - 1697 /DEL/201 4 AS HIS INCOME AND HAS PAID TAX THEREON IN SUCCEEDING FY (2011 - 12) AS SHOWN IN (2). 2011 - 12 67,41,10,776 15,00,32,898 17,74,81,162 64,66,62,512 2012 - 13 73,04,06,242 17,74,81,162 12,56,77,943 78,22,09,461 2013 - 14 81,67,50,725 12,56,77,943 12,98,10,726 81,26,17,942 NOTE: - ADVANCE FEE IS SHOWN AS UNEARNED REVENUE UNDER THE HEAD CURRENT LIABILITIES IN BALANCE SHEET 6 . ATTENTION WAS ALSO INVITED TO PAPER BOOK PAGE 88 WHICH CONTAINS SCHEDULE Q N OTES TO THE FINANCIAL STATEMENT WHICH THE BACKGROUND IS FOUND ADDRESSING IN THE COPY OF THE COPY OF THE AUDITED ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDING 31.03.2009 SO AS TO EMPHASIZE THAT CAREER LAUNCHER (INDIA) LIMITED ( THE COMPANY ) WAS INCORPORATED IN INDIA ON APRIL 25, 1996 TO CONDUCT VARIOUS EDUCATIONAL AND CONSULTING PROGRAMMERS. THE COMPANY IS A CLOSELY HELD COMPANY WITH 73.81% OF THE SHARES BEING HELD BY THE DIRECTORS OF THE COMPA NY AND THE BALANCE 26.19% OF THE SHARES BEING HELD BY OTHER INDIVIDUALS AND COMPANIES. 6 .1. INVITING FURTHER ATTENTION TO THE SAME IT WAS SUBMITTED THAT IN THE SUMMARY OF SIGNIFICANT ACCOUNTING P OLICIES AND QUA THE ISSUE THE FOLLOWING DISCLOSURE ON REVEN UE RECOGNITION HAS BEEN MADE : - (III) REVENUE RECOGNITION REVENUE IN RESPECT OF EDUCATIONAL AND TRAINING FEES RECEIVED FROM STUDENTS IS RECOGNIZED OVER THE PERIOD OF THE COURSE. FEES ARE RECORDED AT INVOICE VALUE, NET OF DISCOUNTS IF ANY. WHERE THERE IS AN UNCERTAINTY IN RECOVERY OF THE FEES, THE SAME IS CHARGED TO THE PROFIT & LOSS ACCOUNT ON COMPLETION OF THE COURSE. 7. THE LD. CIT DR, SH. VIVEK WADEKAR WHILE REFERRING TO THE ORDERS OF THE TRIBUNAL IN 2006 - 07 ASSESSMENT YEAR AT PAGE 43 TO 51 WHICH HA S BEEN FOLLOWED IN 2007 - 08, 2008 - 09 & 2009 - 10 ASSESSMENT YEARS , I NVITING ATTENTION TO PARA 5.1.4 SUBMITTED THAT THE CIT(A) HAS ALSO COME TO THE CONCLUSION HOLDING THAT THE ASSESSEE HAS FAILED TO SHOW REASONABLE LIMITS OR OTHERWISE OF ITS REVENUE RECOGNITIO N FROM INCOME FROM NON - REFUNDABLE PORTION OF ADVANCE FEE BECAUSE IN THE FACTS OF THE PRESENT CASE THERE WAS NO UNCERTAINTY AS THERE WAS NO OCCASION TO CONSIDER THE FAILURE TO DELIVER THE DESIRED SERVICES. THE CIRCUMSTANCE UNDER WHICH THE REVENUE RECOGNIT ION HAS BEEN POSTPONED HAS NOT BEEN SHOWN AND IN VIEW OF THE FACT THAT CERTAIN EXPENSES INCURRED FOR THE 7 I.T.A .NO. - 1697 /DEL/201 4 COURSE CONTENT MATERIAL DEVELOPMENT AND OTHER EXPENSES ALSO PERTAINING TO ADVANCE FEES RECEIVED BY THE COMPANY HAD ALSO BEEN SHOWN. ACCORDINGLY ON ACC OUNT OF MATCHING PRINCIPLE OF RECEIPT AND EXPENDITURE IT WAS NOT JUSTIFIED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION OF THE ARGUMENTS ADVANCED BY THE LD. CIT DR AND THE FINDINGS OF THE AO UPHE LD BY THE LD. CIT(A), IT IS SEEN THAT THE ISSUE HAS BEEN FULLY CONSIDERED ON SIMILARITY FACTS IN 2006 - 07 ASSESSMENT YEAR WHEREIN THE ITAT CONSIDERING THE SAME REVENUE RECOGNITION POLICY OF THE ASSESSEE ALLOWED THE CLAIM OF THE ASSESSEE . THE SAID VIEW ON FACTS HAS CONSISTENTLY BEEN FOLLOWED BY THE ITAT IN 2007 - 08; 2008 - 09; AND 2009 - 10 ASSESSMENT YEARS WHEREIN EITHER ASSESSEE S APPEAL HAS BEEN ALLOWED AND WHERE THE CIT(A) ALLOWED THE RELIEF FOLLOWING THE VIEW TAKEN BY THE ITAT AND THE DEPARTMENT HAS COME IN APPEAL, THE DEPARTMENTAL APPEAL HAS BEEN DISMISSED. IT IS ALSO SEEN THAT THE REVENUE AGITATED THE ISSUE BEFORE THE HON BLE HIGH COURT U/S 260A FOR 2006 - 07 ASSESSMENT YEAR WHEREIN ASSAILING THE CORRECTNESS OF THE ORDER DATED 27.12.2010 IN ITA NO. - 4924 & 4925/DEL/2009 FOR 2005 - 06 & 2006 - 07 ASSESSMENT YEARS, THE FOLLOWING QUESTIONS OF LAW CANVASSED AS CONTAINING SUBSTANTIAL LEGAL ISSUES FOR ADMISSION WERE RAISED BY THE REVENUE: - 1. W HETHER THE RESPONDENT WAS NOT LIABLE TO DEDUCT THE TAX AT SOURCE FOR THE RELEVANT YEAR ON ACCOUNT OF THE PAYMENT MADE BY IT TO ITS FRANCHISEES U/S 194C OF THE ACT, AS HELD BY THE ITAT IN THE IMPUGNED ORDER? II. WHETHER THE ASSESSING OFFICER DID NOT RIGHTLY REJECT THE CLAIM OF THE RESPONDENT MAKING THE ADDITION OF RS.11,24,07079 / - TO INCOME OF THE RESPONDENT FOR THE RELEVANT YEAR ON ACCOUNT OF NON DEDUCTION OF TDS IN TERMS OF SECTION 40(A)(IA) OF THE ACT? III. WHETHER THE ITAT HAS RIGHTLY DELETED THE ADDITION OF RS.37,44,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWA NCE OF BONUS PAID TO ITS DIRECTORS WITHOUT PAYMENT OF THE DIVIDEND IN TERMS OF SECTION 36(1)(II) OF THE ACT? IV. WHETHER THE CLAIM OF THE RESPONDENT FOR EXTRA DEPRECIATION ON COMMUTERS PERIPHERALS AMOUNTING TO RS.1,65,115/ - @ 60% V. W HETHER THE ITAT RIGHTLY DELETED THE ADDITION OF RS.12,01,0000/ - MADE BY THE ASSESSING OFFICER ON THE RECEIPT OF NON REFUNDABLE ADMISSION FEE BY THE RESPONDENT FROM THE STUDENTS IN THE RELEVANT YEAR? 9. IT IS SEEN THAT T HE HON BLE HIGH COURT VIDE ITS ORDER DATED 14.11.2 011 IN ITA NO. - 926/DEL/2011 WAS PLEASED TO ADMIT ONLY TWO OF THE FOLLOWING QUESTIONS: - 8 I.T.A .NO. - 1697 /DEL/201 4 (1) WHETHER THE RESPONDENT HAD FAILED/NEGLECTED TO DEDUCT TAX AT SOURCED UNDER SECTION 194C AND ACCORDINGLY SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1061 IS ATTRACTED? (2) WHET HER THE INCOME TAX APPELLATE TRIBUNAL IS RIGHT IN DELETING ADDITION OF RS.37,44,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF BONUS PAID TO THE DIRECTORS IN TERMS OF SECTION 36(1)(II) OF THE INCOME TAX ACT, 1961? 10. IN VIEW OF THE AF ORESAID PECULIAR FACTS AND CIRCUMSTANCES OF LAW, THE ISSUE CAN NO LONGER BE SAID TO BE RES INTEGRA AS FAR AS THE PRESENT FORUM IS CONCERNED . A CCORDINGLY IN VIEW OF THE FACTUAL POSITION PLEADED BEFORE THE BENCH AS PER THE PAGE NO. - 65 EXTRACTED IN THE EARLIE R PART OF THIS ORDER , W E DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE SUBJECT TO VERIFICATION OF THE AMOUNTS SET OUT IN THE SAID PAGE WHICH THE AO SHALL VERIFY. ACCORDINGLY IN THE LIGHT OF THE ABOVE, THE APPEAL OF THE ASSESSEE IS ALLOWED. 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 0 T H OF APRIL 2015. S D / - S D / - (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 0 /04 /2015 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI