Ambika R.Kushwaha, Ahmedabad v. The Income tax Officer,Ward-2(4),, Baroda

ITA 973/AHD/2011 | 2007-2008
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 97320514 RSA 2011
Assessee PAN AFQPK2920L
Bench Ahmedabad
Appeal Number ITA 973/AHD/2011
Duration Of Justice 11 month(s) 29 day(s)
Appellant Ambika R.Kushwaha, Ahmedabad
Respondent The Income tax Officer,Ward-2(4),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-03-2012
Date Of Final Hearing 01-03-2012
Next Hearing Date 01-03-2012
Assessment Year 2007-2008
Appeal Filed On 01-04-2011
Judgment Text
ITA NO973/A HD/2011 A.YR. 2007- 08. 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI MUKUL KR.SHRAWAT JM & SHRI ANIL CHATUR VEDI A.M.) I.T.A. NO. 97 3/AHD/2011. (ASSESSMENT YEAR: 2007 -08) SMT. AMBIKA R.KUSHWAHA 307 ADITYA OPP. SARDAR PATEL SEVA SAMAJ HALL MITHAKHALI CIRCLE AHMEDABAD-380 006 (APPELLANT) VS. INCOME TAX OFFICER WARD 2(4) AAYAKAR BHAVAN NEAR RACE COURSE CIRCLE BARODA. (RESPONDENT) PAN: AFQPK 2920L APPELLANT BY : SHRI S.N.DIVATIA. RESPONDENT BY : SHRI BHUVNESH KULSHRESTHA SR. DR ( )/ ORDER DATE OF HEARING : 1-3-2012 DATE OF PRONOUNCEMENT : 30-3-2012 PER: SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER. THE ABOVE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A)-II BARODA DATED 12-1-2011 FOR THE ASSESSME NT YEAR 2007-08. 2. THE ASSESSEE IS RUNNING A PROPRIETARY CONCERN IN THE NAME & STYLE OF AVENUE OVERSEAS AND ENGAGED IN PROVIDING EDUCATIO NAL CONSULTANCY TO STUDENTS FOR HIGHER STUDIES ABROAD. ASSESSEE HAS FI LED HER RETURN OF INCOME ON 19-2-2008 DECLARING TOTAL INCOME OF RS.2 92 410/ -.RETURN WAS TAKEN FOR ITA NO973/A HD/2011 A.YR. 2007- 08. 2 SCRUTINY AND ASSESSMENT U/S.143(3) WAS COMPLETED ON 4-12-2009 BY DETERMINING TOTAL INCOME OF RS.8 42 944/-. 3. ON PERUSAL OF AUDIT REPORT FURNISHED U/S.44AB. A SSESSING OFFICER (AO) NOTICED THAT ASSESSEE WAS FOLLOWING CASH SYSTE M OF ACCOUNTING. BALANCE SHEET OF THE ASSESSEE REVEALED THAT SHE HAD SHOWN ADVANCE FOR COMMISSION INCOME OF RS.4 55 044/-.THIS ADVANCE FOR COMMISSION WAS NOT INCLUDED IN THE TOTAL COMMISSION OF RS.62 47 110/- SHOWN IN PROFIT AND LOSS ACCOUNT FOR THE REASON THAT ACCORDING TO HER IN VI EW OF THE UNDERSTANDING WITH THE FOREIGN UNIVERSITIES THE COMMISSION BECOM ES DUE TO HER ON THE COMPLETION OF 3 MONTHS STUDY OF THE STUDENT WHO HAS MIGRATED FROM INDIA. IF IN ANY CASE STUDENT LEAVES IN BETWEEN 3 MONTHS THE ASSESSEE WAS NOT ENTITLED TO GET ANY COMMISSION FROM UNIVERSITIES. A .O. OBSERVED THAT ASSESSEE HAS NOT OFFERED THE ADVANCE COMMISSION BUT AT THE SAME TIME THE EXPENSES INCURRED TO EARN AFORESAID INCOME HAS ALREADY BEEN BOOKED BY THE ASSESSEE ON CASH BASIS. HE ALSO OBSERVED THA T SOME OF THE EXPENSES LIKE INTEREST ON LOAN VISA FEES ETC. HAVE BEEN CLAIMED BY ASSESSEE THOUGH PAYMENT WAS MADE IN SUBSEQUENT YEAR . HE THEREFORE CONCLUDED THAT ASSESSEE WAS FOLLOWING HYBRID SYSTEM OF ACCOUNTING AND SINCE HYBRID SYSTEM OF ACCOUNTING WAS NOT PERMITTED AS PER PROVISIONS OF SEC 145 HE REJECTED THE BOOKS OF ACCOUNTS UNDER TH E PROVISIONS OF SECTION 145 (3) AND THEREBY ESTIMATED NET PROFIT AT 12.5% O F TOTAL TURNOVER OF RS.67 64 321/- (RS. 63 09 267/- + RS. 4 55 054 COMM ISSION INCOME NOT SHOWN IN P & L ACCOUNT) I.E. RS.8 45 540/-. SINCE A SSESSEE HAD DISCLOSED NET PROFIT OF RS.2 95 006/- AN ADDITION OF BALANCE RS.5 50 534/- WAS MADE. ITA NO973/A HD/2011 A.YR. 2007- 08. 3 4. AGGRIEVED BY ORDER OF A.O ASSESSEE PREFERRED AP PEAL BEFORE THE CIT (A). BEFORE CIT (A) ASSESSEE REITERATED THE SUBMISS IONS MADE BEFORE A.O. ASSESSEE CONTENDED THAT COMMISSION ACCRUES TO HER O NLY AFTER COMPLETION OF 3 MONTHS STUDY BY THE STUDENT MIGRATED FROM INDI A. SHE FURTHER CONTENDED THAT ADVANCE COMMISSION WAS NOT HER REAL INCOME. CIT (A) DID NOT ACCEPT THE CONTENTIONS OF ASSESSEE AND UPHELD T HE ORDER OF AO BY HOLDING AS UNDER: 3.3. I HAVE GIVEN CAREFUL CONSIDERATION TO THE SUB MISSIONS MADE AND THE FACTS ON RECORD. IT IS UNDISPUTED THAT THE APPE LLANT IS FOLLOWING CASH SYSTEM OF ACCOUNTING. IT IS ALSO UNDISPUTED TH AT THE APPELLANT HAD RECEIVED AN AMOUNT OF RS.4 55 054/- DURING THE YEAR WHICH WAS NOT SHOWN AS INCOME DURING THE YEAR. THE ONLY DEFEN CE OF THE APPELLANT IN THIS REGARD IS THAT THE AMOUNT OF RS.4 55 054/- WAS NOT THE REAL INCOME OF THE APPELLANT. IN VIEW OF THE AR GUMENT WITH THE FOREIGN UNIVERSITY THE AMOUNT RECEIVED FROM THEM A CCRUED AS INCOME ONLY WHEN A STUDENT IN RESPECT OF WHOM THE COMMISSI ON IS PAID COMPLETED A MINIMUM THREE MONTHS STUDY IN THAT FORE IGN UNIVERSITY. FOR SEVERAL REASONS THE CONTENTION OF THE APPELLANT IS NOT FOUND TENABLE. IN THE CASE OF THE APPELLANT IT IS NOT HYP OTHETICAL INCOME AS IT HAS BEEN CANVASSED. THE AMOUNT HAS ACTUALLY BEEN RE CEIVED AS INCOME. FROM THE COPY OF AGREEMENT FILED WITH BILLY BLUE GROUP AGENCY OF AUSTRALIA THE FOLLOWING IS THE SO CALLED RESTRICTIVE CLAUSE:- PROVIDED THAT THE AGENT COMPLIES WITH ALL ITS OBLI GATIONS AS HEREIN CONTAINED BILLY BLUE WILL PAY TO THE AGENT IN RESPECT OF ALL ENROLMENTS ARRANGED BY THE AGENT THOSE FEES AS SET OUT IN SCHEDULE THREE HERETO SUCH FEES BECOMING DUE AND P AYABLE ON PRESENTATION OF THE AGENTS INVOICE AND ONE MONT H AFTER THE STUDENT HAS COMMENCED THE COURSE. IN THE EVENT THAT FULL PAYMENT OF TUITION FEES IS NOT RECEIVED BY BILLY BL UE OR BEING RECEIVED ARE SUBSEQUENTLY REFUNDED BY BILLY BLUE N O FEE SHALL BE PAYABLE TO THE AGENT IN RESPECT OF THAT ENROLMEN T AND IN THE EVENT THAT THE FEE HAS ALREADY BEEN PAID TO THE AGE NT BILLY BLUE SHALL BE ENTITLED TO DEDUCT THE AMOUNT PAID FROM AN Y AMOUNTS SUBSEQUENTLY INVOICED BY THE AGENT. THE AGENT ACKNO WLEDGES ITA NO973/A HD/2011 A.YR. 2007- 08. 4 AND AGREES THAT THE FEES AS SET OUT IN SCHEDULE. TH REE MAY BE VARIED BY BILLY BLUE UPON THE GIVING OF ONE MONTHS NOTICE IN WRITING TO THE AGENT. IN COPY OF AGREEMENT WITH HOLMESGIEN INSTITUTE FOLL OWING IS THE CLAUSE:- 1. COMMISSION IS PAID ON THE TUITION FEE AS QUOTED IN THE PROSPECTUS. STUDENTS CAN TAKE ADVANTAGE OF THE 5% DISCOUNT OFFERED FOR THE PAYMENT OF 1 YEAR IN ADVAN CE FOR A MAINSTREAM COURSE. HOWEVER COMMISSION IS PAID ON THE FULL TUITION FEE. 2. COMMISSION IS ONLY PROCESSED ONCE HOLMESGLEN HAS RECEIVED THE APPROPRIATE TUITION AND STUDENT HAS COMPLETED ONE YEAR AT HOLMESGLEN IN THE INTERIM COMMISSION IS PAID AS ADVANCE. WITH THE UNIVERSITY OF SOUTH AUSTRALIA THE CONDITIO N LAID DOWN IS THAT PAYMENT WOULD BE MADE WITHIN 30 DAYS OF THE START O F SEMESTER. IT IS FURTHER STIPULATED IF LESS THAN 20 INTERNATIONAL ST UDENTS ENROLL THE COMMISSION WOULD BE CONSIDERED AS ADVANCES. FROM TH E ABOVE IT CAN BE SEEN THAT DEADLINE OF THREE MONTHS IS NOT A CONDITION IN ANY OF THESE AGREEMENTS AND THEREFORE THE APPELLANTS CON TENTION THAT THE AMOUNT RECEIVED WOULD BECOME INCOME AFTER THREE MON THS IS ARBITRARY AND IS NOT BECAUSE OF ANY AGREEMENT AS IT HAS BEEN ARGUED. IN OTHER WORDS EVEN THE APPELLANT HAS NOT CONSIDERE D THIS AGREEMENT AS RESTRICTIVE IN TREATING THE COMMISSION RECEIVED AS INCOME. EVEN OTHERWISE O THE FACTS OF THE APPELLANTS CASE THE T HEORY OF REAL INCOME DOES NOT APPLY. THE APPELLANT HAS IN FACT RECEIVED THIS AMOUNT. THE VERY CONCEPTS OF CASH SYSTEM OF ACCOUNTING MANDATE THAT WHEN AN AMOUNT IN THE NATURE OF INCOME IS RECEIVED IT WILL BE TAXED AT THE TIME OF RECEIPT. TAXABILITY OF AN AMOUNT SO RECEIVED CAN BE AVOIDED ONLY WHEN IT IS NOT INCOME. IN THE CASE OF THE APPELLANT THE AMOUNT IS RECEIVED AS COMMISSION ON SUBMISSION OF INVOICE AND IT IS IN THE NATURE OF INCOME. SOME OF COMMISSION SO RECEIVED MI GHT BE REFUNDED ON HAPPENING OF CERTAIN CONTINGENCIES BUT THAT DOES NOT TAKE AWAY FROM THE NATURE OF RECEIPT BEING INCOME A T THE TIME OF RECEIPT. IN FACT IN ALL SALES TRANSACTIONS THERE IS LIKELIHOOD OF RETURN OR REJECTION OF PART OF THE GOODS SOLD. HOWEVER IT DO ES NOT TAKE AWAY ITA NO973/A HD/2011 A.YR. 2007- 08. 5 FROM THE ACCRUAL OF INCOME AT THE TIME OF SALE. IN THE CASE OF ANY RETURN OR REJECTION THE SAME IS SEPARATELY CLAIMED AS EXPENDITURE. IN THE CASE OF THE APPELLANT IF ANY AMOUNT OF COMMISSI ON IS REQUIRED TO BE RETURNED THEN IT CAN BE CLAIMED AS EXPENDITURE I N THE YEAR OF RETURN. ON THE FACTS OF THE APPELLANTS CASE I AM OF THE CONSIDERED OPINION THAT SINCE CASH SYSTEM OF ACCOUNTING IS FOL LOWED BY THE APPELLANT THE AMOUNT OF RS.4 55 054/- IS THE INCOM E OF THE YEAR WHEREIN IT HAS BEEN RECEIVED. COMING TO THE CLAIM OF EXPENDITURE VISA AND INTERE ST OF ACCRUAL BASIS THE ASSESSING OFFICER HAS MADE ONLY HALFHEAR TED EFFORT AND HAS NOT BROUGHT ANY EVIDENCE ON RECORD IN THIS REGARD. THE APPELLANT HAS STATED THAT INTEREST HAS BEEN ACTUALLY BEEN PAID AN D VISA EXPENSE IS ROUTED THOUGH ESCROW ACCOUNT. THUS THERE IS NO CASE FOR REJECTION OF BOOKS. I THEREFORE HOLD THAT REJECTION OF BOOKS OF ACCOUNTS THIS YEAR IS NOT PROPER AND THEREFORE APPLICATION OF NET PROFIT RATE IS ALSO NOT PROPER. THEREFORE THE ADDITION IS RESTRICTED TO RS .4 55 054/-. 5. AGGRIEVED BY ORDER OF CIT (A) ASSESSEE IS IN AP PEAL BEFORE US. 6. BEFORE US AR REITERATED THE SUBMISSIONS MADE BE FORE THE LOWER AUTHORITIES. HE ALSO CONTENDED THAT ONLY REAL INCOM E CAN BE TAXED. HE FURTHER POINTED OUT TO THE FACT THAT THE ADVANCE FE ES RECEIVED HAS BEEN CONSIDERED AS INCOME OF IMMEDIATE SUCCEEDING YEAR A ND HAS BEEN OFFERED TO TAX. HE ALSO PLACED ON RECORD PAPER BOOK CONTAIN ING COPIES OF LEDGER AGREEMENT AND BILLS ETC. ACCORDING TO HIM THE ADDIT ION MADE BY A.O. AND CONFIRMED BY THE CIT (A) NEEDS TO BE DELETED. 7. THE LD. DR ON THE OTHER HAND VEHEMENTLY URGED TH AT THE A.O. WAS RIGHT IN REJECTING THE BOOKS OF ACCOUNTS AND ESTIMA TING THE INCOME. HE DREW OUR ATTENTION TO THE FACT THE CIT (A) HAS OBSERVED THAT THE DEADLINE OF 3 MONTHS WAS NOT A CONDITION IN ANY OF THE AGREEMENT AND THEREFORE ASSESSEES CONTENTION THAT THE AMOUNT RECEIVED WOUL D BECOME INCOME ITA NO973/A HD/2011 A.YR. 2007- 08. 6 AFTER 3 MONTHS IS ARBITRARY AND IS NOT BASED OF ANY AGREEMENT AS HAS BEEN ARGUED. 8. WE HAVE HEARD BOTH THE SIDES AND ALSO PERUSED TH E MATERIAL PLACED BEFORE US. ADMITTED FACTUAL POSITION IS THE ASSESSE E HAS SHOWN IN HER BALANCE SHEET RS.4 55 044/- AND THE SAME WAS NOT OF FERED FOR TAX IN A.Y. 2007-08. THE BREAK-UP OF IT IS AS UNDER:- ADVANCE FROM STUDENTS - 21 000 HOLMESGLEN INSTITUTE OF TAFE - 1 12 683 BILL BLUE SCHOOL OF GRAPLAFC ART - 1 43 514 UNIVERSITY OF SOUTH AUSTRALIA. - 1 77 857 -------------- 4 55 044 ========== 9. THE ASSESSEE HAS PLACED ON RECORD THE AGREEMENT DATED 1-12-2006 (STUDENT REFERRAL AND RECRUITMENT AGENTS) ENTERED W ITH UNIVERSITY OF SOUTH AUSTRALIA. SCHEDULE A OF THE AGREEMENT STATES AS UN DER:- 4. REFERRAL FEE (PER INTERNATIONAL STUDENT) FULL DEGREE : 15% OF THE FIRST YEARS TUITION FEE PAID BY THE INTERNATIONAL STUDENT (BASED ON THE STANDARD 36 UNIT ANNUAL TUITION FEE) FOR EACH STUDENT SUCCESSFULLY ENROLLED AT THE UNIVERSITY OF SOUTH AUSTRALIA. RECRUITMENT TARGET: ANNUAL TARGET:- 20 INTERNATIONAL STUDENTS SUCC ESSFULLY ENROLLED AT THE UNIVERSITY OF SOUTH AUSTRALIA. COMMISSION TO BE TREATED AS ADVANCE COMMISSION PAID UNLESS THE TARGET IS MET. ITA NO973/A HD/2011 A.YR. 2007- 08. 7 WITH REFERENCE TO REFERRAL FEES THE RELEVANT PORT ION OF AGREEMENT STATES AS UNDER:- 8.3. FOR THE PURPOSES OF DETERMINING WHETHER REFER RAL FEES ARE PAYABLE TO THE AGENT IN RESPECT OF AN INTERNATIONAL STUDENT RECRUITED IN ACCORDANCE WITH THIS AGREEMENT THE FOLLOWING WI LL APPLY: (A) IF THE INTERNATIONAL STUDENT HAS LODGED MULTIPL E APPLICATIONS (THAT IS APPLICATIONS ARE SUBMITTED BOTH THROUGH T HE AGENT AND ANY OTHER AGENT) THE REFERRAL FEE WILL BE PAYABLE T O THE AGENT ONLY IF THE FIRST APPLICATION RECEIVED AND ACCEPTED BY THE UNIVERSITY WAS MADE THROUGH THE AGENT. (B) IF THE INTERNATIONAL STUDENT CANCELS THE FIRST APPLICATION IN WRITING AND MAKES A SUBSEQUENT NEW APPLICATION WHI CH IS ACCEPTED THE REFERRAL FEE WILL BE PAYABLE TO THE A GENT ONLY IF THE SECOND APPLICATION WAS MADE THROUGH THE AGENT. (C) IF THE INTERNATIONAL STUDENT CANCELS THEIR RE LATIONSHIP WITH THE AGENT ADVISES THE UNIVERSITY IN WRITING OF THAT AC TION AND SUBSEQUENTLY IDENTIFIES A NEW AGENT WITH WHOM THEY WITH TO DEAL THE AGENT WILL NOT BE ENTITLED TO THE REFERRA L FEE. (D) IF AN INTERNATIONAL STUDENT WHO IS ALREADY A ST UDENT OF THE UNIVERSITY APPLIES TO A SECOND OR SUBSEQUENT PROGRA M THROUGH AN AGENT NO REFERRAL FEE IS PAYABLE TO THE AGENT I N THAT SECOND APPLICATION. (E) IF THE INTERNATIONAL STUDENT WITHDRAWS FROM THE PROGRAM PRIOR TO ANY REFERRAL FEE BEING PAID TO THE AGENT THE UNIVE RSITY WILL ONLY PAY AN ADMINISTRATIVE FEE OF $250 IN LIEU OF THE F ULL REFERRAL FEE TO THE AGENT. 9.2. ASSESSEE HAS ALSO ENTERED INTO AN AGREEMENT ON 14-6-2006 WITH BILLY BLUE GROUP. THE RELEVANT CLAUSES OF AGREEMENT ARE A S UNDER:- 1. BILLY BLUE HEREBY APPOINTS THE AGENT TO ACT ON ITS BEHALF TO RECRUIT STUDENTS TO ATTEND ANY OF THE SCHOOLS CONDU CTED BY BILLY BLUE ITA NO973/A HD/2011 A.YR. 2007- 08. 8 IN AUSTRALIA SUCH APPOINTMENT TO BE EFFECTIVE FROM 14 TH JUNE 2006 TO 14 TH JUNE 2008. 7. PROVIDED THAT THE AGENT COMPLIES WITH ALL ITS O BLIGATIONS AS HEREIN CONTAINED BILLY BLUE WILL PAY TO THE AGENT IN RESPECT OF ALL ENROLMENTS ARRANGED BY THE AGENT THOSE FEES AS SET OUT IN SCHEDULE THREE THERETO SUCH FEES BECOMING DUE AND PAYABLE ON PRESENTATION OF THE AGENTS INVOICE AND ONE MONT H AFTER THE STUDENT HAS COMMENCED THE COURSE. IN THE EVENT THAT FULL PAYMENT OF TUITION FEES IS NOT RECEIVED BY BILLY BL UE OR BEING RECEIVED ARE SUBSEQUENTLY REFUNDED BY BILLY BLUE NO FEE SHALL BE PAYABLE TO THE AGENT IN RESPECT OF THAT ENROLMEN T AND IN THE EVENT THAT THE FEE HAS ALREADY BEEN PAID TO THE AGE NT BILLY BLUE SHALL BE ENTITLED TO DEDUCT THE AMOUNT PAID FROM AN Y AMOUNTS SUBSEQUENTLY INVOICED BY THE AGENT. THE AGENT ACKNO WLEDGES AND AGREES THAT THE FEES AS SET OUT IN SCHEDULE THR EE MAY BE VARIED BY BILLY BLUE UPON THE GIVING OF ONE MONTHS NOTICE IN WRITING TO THE AGENT. 9.3. ASSESSEE HAS ENTERED INTO APPROVED AGENT AGRE EMENT FOR RECRUITMENT OF OVERSEAS STUDENTS FOR HOLMESGLEN INS TITUTE OF TAFE MELBORUNE VICTORIA AUSTRALIA ON 8-3-2007. THE RE LEVANT CLAUSES IN AGREEMENT WITH REFERENCE TO FEES ARE AS UNDER:- SCHEDULE 1 NOTE 2 COMMISSION IS ONLY PROCESSED ONCE HOLMESGLEN HAS RECEIVED THE APPROPRIATE TUITION FEE AND STUDENT HAS COMPLET ED ONE YEAR AT HOLMESGLEN IN THE INTERIM COMMISSION IS PAID AS AD VANCE. 9.4. ASSESSEE HAS ALSO FURNISHED COPIES OF A FEW RE VERSE CHARGE NOTE WHICH HAVE BEEN ISSUED FOR THE REASON STUDENT NOT E NROLLED STUDENT CANCELLED THEIR COURSE ETC. WITH REGARD TO THE PAYM ENT OF INTEREST AND VISA EXPENSES THE ASSESSEE HAD STATED THAT THE INTEREST HAS ACTUALLY BEEN PAID BY HER AND VISA EXPENSES IS ROUTED THROUGH ESCROW A CCOUNT. ON THIS ITA NO973/A HD/2011 A.YR. 2007- 08. 9 MATTER CIT (A) HAS OPINED THAT THE A.O. HAS MADE O NLY HALF HEARTED EFFORT AND HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT THE ASSESSEE HAS ACCOUNTED FOR EXPENSES ON ACCRUAL BASIS. 9.5. THE READING OF THE VARIOUS CLAUSES OF THE AGRE EMENT ENTERED INTO BY THE ASSESSEE WITH VARIOUS UNIVERSITIES REVEALS THAT THE RECEIPT OF COMMISSION BY THE ASSESSEE IS CONDITIONAL. SHE IS E NTITLED TO COMMISSION ONLY ON FULFILLMENT OF CERTAIN CONDITIONS INCLUDING THE STUDENT CONTINUING THE COURSE. IN CASE THE ADMISSION OF THE STUDENT IS CAN CELLED OR FEES IS REFUNDED TO THE STUDENT THE COMMISSION PAYABLE TO ASSESSEE IS ALSO REDUCED. IN CASE THE COMMISSION HAS ALREADY BEEN PA ID TO THE ASSESSEE AND THE ADMISSION OF THE STUDENT IS CANCELLED OR TH E FEES ARE REFUNDED THEN THE ASSESSEE IS LIABLE TO REFUND THE COMMISSION. IN SUCH A SITUATION THOUGH THE ASSESSEE MIGHT HAVE RECEIVED THE COMMISSION IT CANNOT BE TERMED AS INCOME FINALLY ACCRUED OR EARNED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. IN OUR OPINION A RECEIPT WOULD BE C HARGEABLE IN THE YEAR OF RECEIPT ONLY WHEN IT IS IN THE NATURE OF INCOME. IN OTHER WORDS UNLESS A RECEIPT IS IN THE NATURE OF INCOME MERELY BY RECEI VING IT WOULD NOT BE CHARGEABLE IN THE YEAR OF RECEIPT. IN THE CASE OF A CIT V/S. UPPER GANGES SUGAR AND INDUSTRIES LTD (40 ITD 614) IT HAS BEEN HELD THAT EVEN ON CASH BASIS OF ACCOUNTING IT IS WELL SETTLED THAT THE RE CEIPT IN ORDER THAT IT IS TAXABLE SHOULD PARTAKE THE CHARACTER OF INCOME AND IT IS NOT AS IF EVERY RECEIPT IS TAXABLE IN THE HANDS OF THE ASSESSEE. RE CEIPT IN ORDER THAT IT MAY BE TAXABLE SHOULD HAVE BEEN RECEIVED BY THE ASSESS EE BY VIRTUE OF A RIGHT TO RECEIVE THE SAME AND NOT MERELY AS AN ADVANCE IN ANTICIPATION OF FUTURE CONTINGENCY. ITA NO973/A HD/2011 A.YR. 2007- 08. 10 10. IN VIEW OF THE FACTUAL POSITION STATED ABOVE W E ARE OF THE VIEW THAT THE ADVANCE RECEIPT OF RS.4 55 044/- DOES NOT BEAR THE CHARACTERISTIC OF INCOME FOR THE YEAR UNDER CONSIDERATION PARTICULAR LY WHEN THE SAME WAS SUBJECTED TO TAX AND OFFERED IN THE SUBSEQUENT YEAR S. WE ACCORDINGLY HOLD THAT THE A.O. HAD WRONGLY CONSIDERED THE ADVANCE AS INCOME IN THIS YEAR. WE THEREFORE DIRECT TO DELETE THE SAME. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 30 - 3 - 2012 . SD/- SD /- (MUKUL KUMAR SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACC OUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-II BARODA. 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHMEDABAD. ITA NO973/A HD/2011 A.YR. 2007- 08. 11 1.DATE OF DICTATION 21 - 3 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 22 / 3 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 30 - 3 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 30 - 3 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 30 - 3 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30 - 3 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..