hai Friends,
A Dought on Income Recognition.
If Manufacturer announced a sales incentive scheme to its customers for sales of next three years. Stating that if a dealer reaches the target of sales for first year he will presented by a car but the registration is transfured to him only if he reaches the same turnover for next two years.
Now Mr.X reached the 1st year sales and received a car. Is it necessary to recognise it as Income to Mr.X for the first year?
I think same is chargeable under PGBP as per section 28(iv). As per section 28(iv). The following income shall be chargeable to income-tax under the head "Profits and gains of business or profession",--The value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession.
Further registraion is not the crieteria for the determination of ownership for the purpose of Income tax Tax 1961. To tax the income, the owner is a person who is entitled to receive income from the property in his own right-SC[Podar Cement P Ltd.]
CAclubindia
