The DCIT(OSD), Circle-8, Ahmedabad V. M/s. Vodafone West Limited(Earlier Known asVodafone Essar Gujarat Ltd.,), Ahmedabad

ITA 2024/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8909 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-01-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 29-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ ITA NO. 2024/AHD/2013 / ASSESSMENT YEAR : 2006-07 DCIT (OSD), CIRCLE-8, AHMEDABAD VS M/S. VODAFONE WEST LTD, (EARLIER KNOWN AS VODAFONE ESSAR GUJARAT LTD.) VODAFONE HOUSE, CORPORATE ROAD, PRAHLADNAGAR, OFF. CG ROAD, AHMEDABAD PAN : AAACF 1190 P / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI K. MADHUSUDAN, SR DR ASSESSEE BY : SHRI S. N. SOPARKAR, AR / DATE OF HEARING : 25/01/2017 / DATE OF PRONOUNCEMENT: 20/03/2017 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD DATED 16.05.2013, PASSED FOR ASSESSMENT YEAR 2006-07. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER:- 1A). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-X IV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 108,52,90,000/- MADE ON ACCOUNT OF ADVANCE INCOME (PRE-PAID SERVICE S) ON THE GROUND OF CONSISTENT ACCOUNTING POLICY BUT IGNORE THE PRINCIP LES OF MERCANTILE SYSTEM OF ACCOUNTING ACCORDING TO WHICH, IN ASSESSE E'S OWN CASE FOR A.Y:2005-06, THE HON'BLE ITAT HAS HELD THAT THE AMO UNT WAS RECOGNIZED AS INCOME OF THE YEAR IN WHICH RIGHT TO RECEIVED ACCRUES TO ASSESSEE. ITA NO. 2024/AHD/2013 DCIT VS. VODAFONE WEST LTD AY : 2006-07 2 1B). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-X IV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS TO IGNORE THE FACT THAT THE AMOUNT RECEIVED BY ASSESSEE ON RECHARGES OF PRE-PAID SERVICES BEING UN-REFUNDABLE HAD ACCRUES TO ASSESSEE IN THE YEAR OF RECEIPT ITSELF & HENCE TAXABLE IN ASSESSEE'S HAND. 1C). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-X IV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 108,52,90,000/- MADE ON ACCOUNT OF ADVANCE INCOME (PRE-PAID SERVICE S) ON THE GROUND OF CONSISTENT ACCOUNTING POLICY BUT IGNORING THE FACT THAT ASSESSEE DID CLAIM EXPENSES PERTAINING TO SUCH ADVANCE INCOME WH ICH OUGHT TO HAVE BEEN DISALLOWED BY FOLLOWING THE SAME ACCOUNTING P OLICY. 2). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD OUGHT TO HAV E UPHELD THE ORDER OF THE ASSESSING OFFICER. 3). IT IS THEREFORE, PRAYED THAT THE ORDER OF TH E LD. COMMISSIONER OF INCOME- TAX (APPEALS)-XIV, AHMEDABAD MAY BE SET-A-SIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THIS ISSUE TO BE COVERED IN FAV OUR OF THE REVENUE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR ASS ESSMENT YEAR 2009-10 VIDE CONSOLIDATED ORDER DATED 17.11.2016 IN ITA NOS .909/AHD/2014 AND 944/AHD/2014, WHEREIN THE ITAT HELD AS UNDER:- 24. THE REVENUE'S NEXT SUBSTANTIVE GROUND NO.7 PLE ADS THAT THE DRP HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF R S.1,21,82,00,000/- MADE IN THE COURSE OF THE IMPUGNED DRAFT ASSESSMENT ON ACCO UNT OF RECEIPT OF PREPAID SERVICES CRYSTALLIZED IN THE IMPUGNED ASSESSMENT YE AR. THE SOLE ISSUE BETWEEN THE PARTIES IS ABOUT INCOME ARISES FROM SAL E OF PREPAID CARDS. THE REVENUE TREATS THE SAME TO BE A MERE RECHARGE TAXAB LE IN THE YEAR OF PURCHASE. THE ASSESSEE'S STAND AS AGAINST THIS IS T HAT AS-9 MANDATES REVENUE RECOGNITION ONLY WHEN THE CORRESPONDING SERVICES AR E ACTUALLY RENDERED. WE NOTICE FROM THE CASE FILE THAT A CO-ORDINATE BENCH OF THIS TRIBUNAL IN (2013) 31 TAXMANN.COM 239 (DELHI-TRIB.) ACIT VS. SHYAM TELELI NKS LTD. UPHOLDS THE SAID ASSESSEE'S IDENTICAL CONTENTION ON THE PRINCIP LE OF RECOGNITION OF INCOME OF ACCRUAL BASIS PERTAINING TO SALE OF PREPAID SIM CARDS. WE FURTHER NOTICE THAT THE SAID CO-ORDINATE BENCH IN PARA 16 REMITS T HE ISSUE BACK TO THE ITA NO. 2024/AHD/2013 DCIT VS. VODAFONE WEST LTD AY : 2006-07 3 ASSESSING OFFICER FOR FACTUAL VERIFICATION TO PREVE NT REVENUE LEAKAGE. WE ALSO FOLLOW SUIT IN THIS LEGAL AND FACTUAL BACKDROP AND DIRECT THE ASSESSING OFFICER TO VERIFY AS TO WHETHER THE ASSESSEE HAS DECLARED T HE REVENUE IN RESPECT OF THE EXPIRED PREPAID CARDS OR NOT IN THE SUCCEEDING ASSE SSMENT YEAR. THIS REVENUE'S GROUND IS THUS PARTLY ACCEPTED FOR STATIS TICAL PURPOSES. 4. ADMITTEDLY, THE FACTS OF THE YEAR UNDER CONSIDER ATION ARE IDENTICAL. IN VIEW OF ABOVE, WE, RESPECTFULLY FOLLOWING THE DE CISION OF ITAT IN ASSESSEES OWN CASE FOR AY 2009-10, ALLOW THE GROUN DS OF APPEAL OF THE REVENUE ON SIMILAR LINES. 5. IN THE RESULT, REVENUES APPEAL IS DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 20 TH MARCH, 2017 AT AHMEDABAD. SD/- SD/- N.K. BILLAIYA (ACCOUNTANT MEMBER) MAHAVIR PRASAD (JUDICIAL MEMBER) AHMEDABAD; DATED 20/03/2017 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD