Case Law Details
ACIT vs. Noida Toll Bridge Co. Ltd. (Delhi ITAT)
Mercantile based accounting requires income and expenditure of a financial year has to be taken in account in the same, concerned financial year. In ACIT vs. Noida Toll Bridge Co. Ltd. & vice versa [ITA Nos. 5246, 5247, 5248, 5249 and 5286/Del/2012, decided on10.04.2017], the brief facts of the case (relating to above-mentioned topic) as emanating from the order of the Assessing Officer were as follows:
“12. On perusal of the balance sheet, it is seen that assessee has shown a sum of Rs.2,00,57,868/- as Advance Payment and unexpired discounts shown under the head current liability. Accordingly, assessee was asked to explain the nature of this unexpired discounts shown under the head liability. In response to the query, assessee has stated that this pertains to the toll receipts, which the customer has not used during the year under consideration. Assessee was further asked to explain as to why the receipts received from the customer have been kept aside in the balance sheet. In response assessee stated that customer purchases card of tolls which is consumed on to and fro basis, and when the customer utilized full to and fro the receipts is taken into consideration. The assessee has also submitted the copy of refund being made by the company to the customer. The submission of the assessee is not tenable and convincing because the assessee received the tolls through electronic cards as revenue receipt and thereafter treatment thereof as ITAs No.5246, 5247, 5248, 5249, 5286/Del/2012 15 liability is clear deferment of tax incidence on the ground of unutilization of to and from and other submission of refund to be made to customer in case the customer intends to take refund. The other submission is not acceptable because if a customer intends to take refund, which can be adjusted against the concerned year’s receipt and after adjusting refund, net revenue toll receipts will be taxable. Thus the entire submission of the assessee is not tenable, but is a clear cut avoidance of tax incidence. Accordingly, a sum of Rs.2,00,57,868/- is added to the income of assessee, for which penalty proceedings u/s.271(1)(c) are being initiated separately.”
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