What is the crux of decision in the case of Neon Solutions Pvt Ltd, rendered by Hon'ble Bombay HC?
What is the crux of decision in the case of Neon Solutions Pvt Ltd, rendered by Hon'ble Bombay HC?
Arpit Feb. 07, 2018
It was held that income shall be deemed to accrue only when there is reasonable certainty of its ultimate collection. Just because assessee is following mercantile system of accounting, it cannot be said that every income which is due has also accrued to the assessee. For accrual i.e for recording of income in books, there is a direct mandate by guidance note by ICAI on income recognition. As per guidance note, income shall be recorded(deemed to accrue) only when there is reasonable certainty of its ultimate collection.
