Where amount received in advance for a service which is to be performed in subsequent year, the advance could not be taken as income in the year of receipt

CIT Vs. Dinesh Kumar Goel (2011) 331 ITR 10 (Delhi)(High Court) The assessee running coaching classes followed mercantile system of accounting. Total fees for the entire course, which may be of two years duration was taken in advance at the time of admission of the students. For the A.Y. 1997-1998, the assessee claimed that the fees received in the relevant year were to be carried forward to the next assessment year as they related to the next financial year. The Assessing Officer rejected the claim on the ground that the assessee was following the mercantile system of accounting. The Tribunal...