Allowing the appeal of the assessee the Tribunal held that; assessee had given its trademark ‘Vibes’ for a period of five years and received consideration, since agreement was valid for a period of five years and assessee had to carry on certain activities throughout period of five years by taking participation into management of business affairs of Vibes clinic among other responsibilities, assessee was justified in deferring income over a period of five years, i.e., tenure of agreement. ( AY.2007 -08)
Alankar Slimming & Cosmetic Clinic (P.) Ltd. v. ITO (2018) 171 ITD 1 (Kol) (Trib.)
S. 5 : Scope of total income – Accounting Standard 9 -Accrual- Since agreement was valid for a period of five years and assessee had to carry on certain activities throughout period of five years by taking participation into management of business affairs of Vibes clinic among other responsibilities, assessee was justified in deferring income over a period of five years. [ S.145 ]