WEIR MINERALS (INDIA) PRIVATE LTD,NEW DELHI V. DCIT CIRCLE-27(1), NEW DELHI

ITA 4713/DEL/2019

AI Insights

The case involves M/s. Weir Mineral (India) Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)-9, New Delhi, confirming an addition of Rs.79,81,999/- as undisclosed professional income for the assessment year 2012-13. The addition was initially made by the Assessing Officer under section 143(3) of the Income-tax Act, 1961. The appellant argued that the royalty income from a sub-license agreement was not recognized in the books due to uncertainty in its collectability, despite TDS being deducted. The Tribunal examined the principles of revenue recognition under Accounting Standard 9 and the implications of TDS deductions on income recognition. The Tribunal concluded that the income was not realized and thus should not be taxed in the year it was accrued, leading to the decision to delete the addition of Rs.79,81,999/-. However, the TDS amount of Rs.7,98,200/- was to be treated as income due to the credit claimed by the appellant.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398021 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs. Anjum M.H Ghaswala, CIT v. Shoorji Vallabhdas & Co., Godhra Electricity Co. Ltd. v. CIT, CIT v. Birla Gwalior (P.) Ltd, Poona Electric Supply Co. Ltd. v. CIT, Brahamputra Capital & Financial Services Ltd. v. ITO, H.M. Kashiparekh & Co. Ltd. v. CIT, CIT v. Motor Credit Co. (P.) Ltd., Nutan Warehousing Co. Pvt. Ltd v. ACIT, Essar Steel Metal Trading Limited v. DCIT, Satellite Television Asian Region Ltd. v. DDIT, Vishwaroop Infotech Pvt. Ltd. v. ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: VISHAL KALRA; SUMISH MURGAI
• Keywords: Bad and doubtful debts; Tax effect; Gift; TDS; FORM 26AS
• Section: 143(3); 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘F’: NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI KHETTRA MOHAN ROY, ACCOUNTANT MEMBER ITA No.4713/DEL/2019 [Assessment Year 2012-13] M/s. Weir Mineral (India) Pvt. Ltd. Office Unit No.912 and 914, 9th Floor, DLF Tower, A Plot No.-10, Jasola District Centre, New Delhi-110025 Vs Deputy Commissioner of Income Tax, Circle-27(1), New Delhi PAN-AAACI0519D Appellant Respondent Appellant by Shri Vishal Kalra, Adv. & Ms. Sumish Murgai, AR and Shri Kashish Gupta, CA Respondent by Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 29.05.2025 Date of Pronouncement 06.06.2025 ORDER PER KHETTRA MOHAN ROY, AM This appeal by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-9, New Delhi, dated 07.03.2019 pertaining to Assessment Year 2012-13. 2. The assessee has raised following grounds of appeal:- 1. Addition on account of undisclosed professional Income - Rs. 7,981,999 (Tax effect - Rs.25,89,759) 1.1 The learned Commissioner of Income-tax Appeals (‘CIT(A)') erred in law and on facts in confirming the addition 2 ITA No.1489/Del/2024 towards royalty made by the learned Assessing Officer ('AO') as undisclosed professional income. 1.2 The learned CIT(A) and learned AO ought to have appreciated that as per the Accounting Standard 9- Revenue Recognition, recognition of revenue shall be postponed when there is uncertainty in ultimate collection of the same. 1.3. The learned CIT(A) and the learned AO ought to have appreciated that the Appellant did not recognize the royalty income since there was no certainty regarding ultimate collection of the same. 1.4 The learned CIT(A) and the learned AO ought to have appreciated that the customer had not paid the royalty to the Appellant for past years as well as current year and hence, it was not reasonably certain that the ultimate collection would be made. 1.5 The learned CIT(A) erred in not considering the documentary evidences furnished by the Appellant which clearly demonstrated that subsequently the Appellant was failed to collect the royalty and has actually written-off the same as amount no longer receivable. 1.6 The learned CIT(A) and AO erred in making the addition stating that there is no uncertainty about collectability of revenue as the customer is depositing the TDS. 1.7 The learned CIT(A) and learned AO ought to have appreciated that deposit of TDS to government by the customer and payment of royalty the Appellant are two independent transactions and deposit of TDS does not assure receipt of royalty by Appellant. 1.8 The learned CIT(A) erred in upholding the disallowances made by the learned AO on the ground that the TDS was claimed without offering the underlying receipts to tax was admitted by the Appellant only during the assessment proceedings. 1.9 Notwithstanding and without prejudice to the above, if the addition towards royalty is made during the year, the same shall be allowed as deduction in subsequent year since the same was actually written-off during the subsequent year but no deduction is claimed for the same. 3 ITA No.1489/Del/2024 2. Levy of interest under section 234B of the Act- Rs.1,330,289 (Tax effect – Rs.13,30,289). 2.1. The learned Assessing Officer has erred in levying excess interest under section 234B of the Act which is consequential to the above addition made in the assessment order. 3. Brief facts of the case are that the Appellant is a company incorporated in India and engaged in the business of manufacturing and marketing of slurry pumps, valves and spare parts, and related design support services. The Appellant filed its return of income for the subject assessment year on 30.11.2012 declaring an income of Rs.19,38,19,758/-. The case was taken up for scrutiny assessment proceedings and such proceedings was completed under section 143(3) of the Income-tax Act, 1961 ('the Act') vide order dated 23.03.2016, wherein the learned Assessing Officer (\"AO\") made an addition amounting to Rs.79,81,999/- on account of undisclosed Professional income. 4. Aggrieved with the order of the Assessing Officer, the Appellant filed appeal before the Ld. CIT(A). The Ld. CIT(A) confirmed the addition made by the Assessing Officer by holding as under:- “4.2 I have perused the impugned assessment order and submission of the AR of the appellant. The Appellant submitted that it had not accounted the royalty income in FY 2011-12 on account of uncertainty in its recoverability. It further submitted that even in subsequent year i.e., F.Y. 2012-13, the Appellant had written-off the said royalty income upon realizing non-recoverability of the same. 4 ITA No.1489/Del/2024 4.3 The issue regarding claim made for TDS without offering to tax the underlying the royalty income to tax was admitted by the Appellant in the course of the assessment proceedings only when the AO directed the Appellant to furnish the reconciliation for TDS as per ITR and Form 26AS. The appellant had claimed credit of TDS being fully conversant of the fact that the said income had accrued to it and the same was appearing in its Form 26AS. 4.4 Further, the claim of the appellant company that the TDS credit was inadvertently claimed is a vague & lame excuse. The assessee company had deposited \"self Assessment Tax after reducing the credit of alleged TDS from the tax liability computed. In case the same would have been inadvertently claimed in ITR, the assessee company would have paid Self Assessment Tax excluding the alleged TDS and would have claimed refund to that extent. However, it is not the fact of the case. 4.5 From the above stated facts of the case it is evident that the appellant company had willfully avoided to include the alleged amount of professional income in its return of income. Accordingly, the claim of the Appellant is not admissible since it has claimed credit of TDS on royalty income. Hence, i find no infirmity in the order of the AO and therefore, this ground of appeal is dismissed. 5. Ground no.2 is directed against charging of interest u/s 234A, 234B and 234C. Since charging of interest is mandatory and procedural in nature as has been held by Hon'ble Supreme court in the case of CIT vs. Anjum M.H Ghaswala, 119 taxman 352/252 TR 1 (SC), the AO is directed to compute the same as per law.” 5. Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before us. 6. The ld. Counsel for the assessee filed a written submission, which is reproduced as under:- 1. Brief background 1.1 The Appellant is a company incorporated in India and engaged in the business of manufacturing and marketing of 5 ITA No.1489/Del/2024 slurry pumps, valves and spare parts, and related design support services. 1.2. Appellant filed its return of income for the subject AY on 30 November 2012 declaring an income of INR 19,38, 19,758/-. 1.3 Appellant's case was taken up for scrutiny assessment proceedings and such proceedings was completed under section 143(3) of the Income-tax Act, 1961 ('the Act) vide order dated 23 March 2016, wherein the learned Assessing Officer (\"AO\") made an addition amounting to INR 79,81,999/- on account of undisclosed Professional income. 1.4 On July 22, 2016, Appellant filed an appeal before the commissioner of Income Tax (Appeals), Delhi-9 (\"CIT(A)\") against the order of assessment passed by AO. During the Appellate proceedings, Appellant filed its response against the addition made by AO which was duly supported by the relevant documentary evidence. 1.5 On March 07, 2019, the CIT(A) issued its order under section 250 of the Act wherein the CIT(A) has upheld the addition made by AO and Appellant's appeal was dismissed. 1.6 Aggrieved by such order, the Appellant has filed an appeal before your Honour's on the following grounds of appeal: 2. Submissions: 2.1 Re: Grounds No. 1.1 - General ground 2.2. Re: Grounds No. 1.2 to 1.9 - Addition on account of undisclosed professional income amounting to INR 79,81,999/- ignoring the fact that ultimate collection of such receipts was uncertain and therefore, the same was not recognized by the Appellant in its books of accounts. 2.3. Revenue's contentions: 2.3.1 The AO has held that TDS credit has been availed by the Appellant and corresponding income has not been offered to tax. Further, it was held that when the concerned party is deposition TDS on behalf of the Appellant then there appears no question about collectability of such income. 6 ITA No.1489/Del/2024 2.3.2. Such findings of the AO were upheld by the CIT(A), without appreciating/ considering the submissions made by the Appellant, by stating the Appellant had willfully avoided to include the alleged amount of professional income in its return of income. Accordingly, the claim of the Appellant is not admissible since it has claimed credit of TDS on the royalty income. Appellant's submissions: Brief Facts 2.3.3. It is respectfully submitted that during the course of its business, the Appellant entered into a sub- license agreement with The Indure Limited ('TIL' whereby TIL was granted the right to manufacture and sell a restricted range of Warman Pumps and parts. Pursuant to this agreement, in consideration of grant of a non-exclusive license by the Appellant, TIL was required to pay royalty to Appellant for use of the brand name. Copy of sub-license agreement entered between the Appellant with TIL is at pages 120 to 147 of the paperbook. 2.3.4 For AY 2012-13, TIL withheld taxes amounting to INR 7,98,200/- on the royalty income that TIL was liable to pay to the Appellant. However, no royalty was paid by TIL to the Appellant. Copy of Form 26AS of the Appellant is at pages 110 to 119 of the paperbook. 2.3.5. During AY 2012-13 (year under consideration) no royalty income was accrued in the books of Appellant as there was uncertainty regarding realization of the same. In other words, royalty income was not recognized by the Appellant in its books of accounts for the subject assessment year in line with Accounting Standard -9 dealing with \"Revenue Recognition\" as there was uncertainty regarding its receipt and thus, its booking/ accrual was deferred/ postponed. 2.3.6. During AY 2013-14 Appellant recognized royalty income of Rs. 79,81,999 in the books and issued the invoice. At the end of the year a provision amounting to Rs. 79,81,999 was created since there was an uncertainty regarding ultimate collection of the amount. Since the provision was grouped with royalty income in the financial statements no royalty income is reflected on the financial statement for AY 2013-14. Refer pages 9 to 13 of the paperbook. 7 ITA No.1489/Del/2024 2.3.7. In AY 2017-18 Appellant wrote-off the receivable of Rs. 79,81,999 due to ultimate failure to realize the invoice value, by raising a credit note and actually writing off the receivable. Refer pages 14 to 21 of the paperbook. 2.3.8. However, while filing the return of income for AY 2012-13, the Appellant had inadvertently claimed the TDS credit corresponding to the unrecognized royalty income. 2.3.9. During the assessment proceedings, on realizing that TDS credit is claimed without offering to tax the underlying receipt, the Appellant had suo-moto requested the learned AO to disregard the TDS credit arising from the subject transaction. However, the AO without considering the Appellant's submissions proceeded to consider such royalty income (which Is not received) as Appellant's undisclosed professional income. When there is uncertainty regarding receipt of income - Income recognition should be made only upon actual receipt or collection. 2.3.10. In this regard, it is respectfully submitted that the concept of 'accrual of income' needs to be considered in the hue of the 'real income theory'. Where accrual of an income takes place but its realization becomes impossible, such hypothetical income cannot be charged to tax. In the case of mercantile system of accounting, an accruing income can be charged to tax only when it is likely to be received under the given circumstances. In a case where receipt of income, after its accrual, is marred with complete uncertainty as to its realization, such an accrual gets deferred to the point of clearing of the clouds of uncertainty over it. 2.3.11 It is well settled principle by the Apex court in various judgements that \"Income-tax is a levy on income. No doubt, the Income-tax Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of the income or its receipt; but the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a Hypothetical income, which does not materialize\". 2.3.12. Further, it is submitted that the income can be brought to tax only when the Appellant has actually received or likely to receive or certainty of receiving the income in the near future. Income cannot be recognized when there in uncertainty regarding its ultimate collection. 8 ITA No.1489/Del/2024 Deduction of TDS alone cannot be the reason to sustain the royalty income. 2.3.13. In the Appellant's case, royalty income pursuant to the sub license agreement, which has theoretically accrued in favor of Appellant, but has not factually resulted or materialized at all to an Appellant during the accounting year, should be regarded as hypothetical income and not the real income. 2.3.14 It is well settled that, in order that income should accrue, it should not merely fall due or become legally recoverable but should also be factual and practically realizable. Factual or practical unrealizability thereof, may prevent its accrual, depending upon the facts and circumstances attending upon the transaction. 2.3.15 Further, despite, the Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of income or its receipts, but the substance of the matter is the income. If the income does not result at all, there cannot be a tax, even though the bookkeeping entry is made about hypothetical income which does not materialize. The instant case is on a better footing, wherein after realizing and establishing the bad financial position of TIL and no chance of realization of royalty income, the Appellant had not even passed any entry in the books of account for such income. 2.3.16 The AS-9 issued by the ICAl lays down that where the ultimate collection with reasonable certainty is lacking, the revenue recognition is to be postponed to the extent of uncertainty involved. In terms of the guidance note, it is appropriate to recognize revenue in such cases only when it becomes reasonably certain that ultimate collection will be made. 2.3.17 Therefore, if the income does not result at all, there cannot be a tax, even though in book keeping, an entry is made about a 'hypothetical income' which did not materialize. 2.3.18. Reliance in this regard is placed on following judicial precedents wherein it was held that \"If income does not result at all, there cannot be a tax, even though in book- keeping, an entry is made about a \"hypothetical income\", which does not materialise\" 9 ITA No.1489/Del/2024 • CIT v. Shoorji Vallabhdas & Co. [1962] 46 ITR 144 (SC), wherein the Hon ble supreme court has held as under: \"Income-tax is a levy on income. No doubt, the Income- tax Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of the income or its receipt; but the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a \"hypothetical income\" which does not materialise. Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account. This was exactly what had happened in instant case. Here the agreements within the previous year replaced the earlier agreements, and altered the rate in such a way as to make the income different from what had been entered in the books of account. A mere book-keeping entry cannot be income, unless income has actually resulted, and in the instant case, by the change of the terms the income which accrued and was received consisted of the lesser amounts and not the larger. This was not a gift by the assessee firm to the managed companies. The reduction was a part of the agreement entered into by the assessee firm to secure a long-term managing agency arrangement for the two companies which it had floated. The High Court was right in coming to the conclusion that on the facts of this case the larger income neither. accrued nor was received by the assessee firm.\" • Godhra Electricity Co. Ltd. v. CIT: [1997) 225 ITR 746 (SC) • CIT v. Birla Gwalior (P.) Ltd : [1973] 89 ITR 266 (SC) • Poona Electric Supply Co. Ltd. v. CIT: [1965) 57 ITR 521 (SC) • Brahamputra Capital & Financial Services Ltd. v. ITO [2009] 119 ITD 266 (Delhi) 10 ITA No.1489/Del/2024 • H.M. Kashiparekh & Co. Ltd. v. CIT : [1960) 39 ITR 706 (BOM.) • CIT v. Motor Credit Co. (P.) Ltd.: [1981] 6 Taxman 63 (Madras) • M/s. Nutan Warehousing Co. Pvt. Ltd v. ACIT: IT No.471/PUN/2018 • Essar Steel Metal Trading Limited v. DCIT: I.T.A. No. 140/Mum/2023 • Satellite Television Asian Region Ltd. v. DDIT : [2013] 58 SOT 109 (Mumbai) 2.3.19 Reliance in this regard is also placed on the following judicial precedents, wherein it was held that \"unrealized income should not brought to tax even when the TDS on such income was deducted on accrual basis\". • Vishwaroop Infotech Pvt. Ltd. v. ACIT: I.T.A. No. 633/Mum/2019, wherein is was held as under: \"The rental income can be brought to tax only when the assessee has actually received or likely to receive or certainty of receiving in the near future. In the given case, the assessee has no certainty of receipt of any rent and as and when assessee reaches an agreement to settle the dispute, it is equal to satisfying the forth conditions in the Rule 4 of the I. T. Rules, 1962. Therefore, in our considered view, the addition of rent is unjustified. Accordingly, we direct AO to delete the addition. Resultantly, Ground no. 1(i) is allowed. 19. With regard to Ground No. 1(ii), Ld. CIT(A) has sustained the addition solely on the ground that licensee has deducted TDS on the unrealised rent. Yes, the licensee has deducted TDS and declared the same in the TDS return. They have complied with the advance tax provisions and did not pay any rent to the assessee and it is fact on the record. This alone cannot be the reason to sustain the rental income. As discussed in the earlier para, it is fact on record that assessee has no certainty of receiving any rent. Therefore, we reject the contention of Ld. CIT(A). However, we notice that assessee has taken the TDS credit to the extent of Rs. 38.58 lakhs. The AO can 11 ITA No.1489/Del/2024 treat the amount of Rs. 38.58 lakhs as the income from head \"Income from House Property\". • Essar Steel Metal Trading Limited v. DCIT: I.T.A. No. 140/Mum/2023 • ACIT v. Shri Rajeev Tandon ITA No. 461/LKW/2013 2.3.20 Based on above, it is submitted that the AO as well CIT(A) has erred in concluding the royalty arising out of sub- license agreement is the undisclosed professional income, ignoring the fact that such amount was never recognised by the Appellant in its books of accounts and thus it was not the real income of the Appellant. Mere deduction of the TDS on such amount by TIL would, in any manner, not lead to the conclusion that such income to be taxed in hands of Appellant. 2.4 Re: Ground of appeal no.2: Consequential.” 7. The ld. AR relied upon the above written submission as submitted that the entire addition of Rs.79,81,999/- may be deleted. Further, the following evidences were also submitted by way of a paper book, which is as under:- 1. Copy of submissions dated December 18, 2018 filed by the Appellant with the Commissioner of Income Tax (Appeals) (\"CIT(A)\") along with the following documents • Copy of journal entry in the Appellant's books of account indicating the recognition of royalty income during AY 2013- 14. • Copy of journal entry in the Appellant's books of account indicating creation of provision due to non-receipt of royalty income during AY 2013-14. • Copy of journal entry in the Appellant's books of account indicating reversal of provision during AY 2017-18 • Copy of journal entry in the Appellant's books of account where the Appellant has written off the royalty receivable upon ultimate failure to realize the invoice value during AY 2017-18 12 ITA No.1489/Del/2024 2. Copy of invoice raised by the Appellant upon The Indure Limited (\"TIL\") 3. Copy of credit note raised by the Appellant along with the copy of approval received to write off the royalty receivable in AY 2017-18 4. Copy of submissions dated March 16, 2016 filed by the Appellant with the Assessing Officer (\"AO\") along with statement indication Reconciliation of Form 26AS with the financial statements 5. Copy of ledger account of royalty income in books of the Appellant 6. Copy of Appellant's Tax Audit Report (\"TAR\") for the subject AY 7. Copy of Appellant's audited financial statements for the subject AY 8. Copy of Form 26AS for the subject AY 9. Copy of sub-license agreement entered by the Appellant with TIL 10. Copy of Accounting Standard-9 8. Per contra, the ld. Sr. DR vehemently submitted that once the credit of TDS of Rs.7,98,200/- has been granted to the assessee, the income should also be brought under the ambit of taxation u/s 199 in accordance with Rule 37BA(3) of the IT Rules, 1962. 9. We have perused the entire materials on record and meticulously gone through the arguments and the submission placed before us. It is a matter of record that the impugned sum of Rs.7981999/- did not reach the company at all because the same remained uncollected and the assessee ultimately wrote the sum of from his books by way of bad debts. It is beyond doubt that there 13 ITA No.1489/Del/2024 was no ultimate collection of the sum; in fact, it is the assessee had recognised the income in the subsequent Financial Year 2012-13. Thus, it cannot be the case that the income has already escaped from the exchequer because at the most there is timing difference in the accounting of the income and the tax rates were uniform for both years. In fact, invoices were also raised in the subsequent financial year. The payee company on the other hand may have deducted tax at source but ipso facto it does not tantamount to have crystallized the income in the hand of the appellant company in view of the fact that the ultimate collection with reasonable certainty was lacking and the revenue recognition was postponed to the extent of certainty involved. In the accounting standards prescribed by the Institute of the Chartered Accountant of India are binding upon the preparation of financial statements u/s 211 of the Companies Act 1956. The relevant portion of AS9 is extracted below:- 8. The Use by Others of Enterprise Resources Yielding Interest, Royalties and Dividends 8.1 The use by others of such enterprise resources gives rise to: (i) interest charges for the use of cash resources or amounts due to the enterprise; (ii) royalties charges for the use of such assets as know- how, patents, trademarks and copyrights; (iii) dividends rewards from the holding of investments in shares. 8.2 Interest accrues, in most circumstances, on the time basis determined by the amount outstanding and the rate 14 ITA No.1489/Del/2024 applicable. Usually, discount or premium on debt securities held is treated as though it were accruing over the period to maturity. 8.3 Royalties accrue in accordance with the terms of the relevant agreement and are usually recognised on that basis unless, having regard to the substance of the transactions, it is more appropriate to recognise revenue on some other systematic and rational basis. 8.4 Dividends from investments in shares are not recognised in the statement of profit and loss until a right to receive payment is established. 8.5 When interest, royalties and dividends from foreign countries require exchange permission and uncertainty in remittance is anticipated, revenue recognition may need to be postponed. 9. Effect of Uncertainties on Revenue Recognition 9.1 Recognition of revenue requires that revenue is measurable and that at the time of sale or the rendering of the service it would not be unreasonable to expect ultimate collection. 9.2 Where the ability to assess the ultimate collection with reasonable certainty is lacking at the time of raising any claim, e.g., for escalation of price, export incentives, interest etc., revenue recognition is postponed to the extent of uncertainty involved. In such cases, it may be appropriate to recognise revenue only when it is reasonably certain that the ultimate collection will be made. Where there is no uncertainty as to ultimate collection. revenue is recognised at the time of sale or rendering of service even though payments are made by instalments. 9.3 When the uncertainty relating to collectability arises subsequent to the time of sale or the rendering of the service, it is more appropriate to make a separate provision to reflect the uncertainty rather than to adjust the amount of revenue originally recorded. 9.4 An essential criterion for the recognition of revenue is that the consideration receivable for the sale of goods, the rendering of services or from the use by others of enterprise resources is reasonably determinable. When such 15 ITA No.1489/Del/2024 consideration is not determinable within reasonable limits, the recognition of revenue is postponed. 9.5 When recognition of revenue is postponed due to the effect of uncertainties, it is considered as revenue of the period in which it is properly recognised.” 10. Therefore, the financial statements are subject to statutory audit and the auditors have not qualified the accounts thereby contemplating the preparation of accounts is correct and free from any technical infirmities and also compliant with Accounting Standards.. We have no hesitation in overturning the order of the Ld. CIT(A) and directing that the addition of Rs.79,81,999/- be deleted. However, there is no doubt to the fact that the assessee has taken credit of Rs.7,98,200/- towards tax deducted at source. As per section 198 of the Income Tax Act, any tax deducted shall for the purpose of computing the income of the assessee, be deem it to be income received. There is no laid down process in law to withdraw claim of TDS altogether. Therefore, a sum of Rs.7,98,200/- should be added as income. In fact, the assessee is entitled to relief of Rs.71,83,799/- i.e. Rs.79,81,999 as reduced by Rs.7,98,200/-. 11. In the result, the appeal of the assessee is party allowed. Order pronounced in the open court on 06th June, 2025. Sd/- Sd/- [MADHUMITA ROY] [KHETTRA MOHAN ROY] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 06.06.2025 f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ 16 ITA No.1489/Del/2024 Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "