Commissioner Of Income Tax (Central), Ludhiana v. M/S S.a. Builders Limited, Sector 26, Chandigarh

IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH Date of decision: 06.05.2013ITA No. 61 of 2004 Commissioner of Income Tax (Central), Ludhiana ......Appellant vs. M/s S.A. Builders Limited, Sector 26, Chandigarh .....Respondent CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTAHON'BLE MS. JUSTICE RITU BAHRI Present: - Ms. Urvashi Dhugga, Advocate for the appellant. M/s Akshay Bhan and Alok Mittal, Advocatesfor respondent. Hemant Gupta, J. ....... Present appeal under Section 260-A of the Income TaxAct, 1961 (for short the 'Act') arises out of an order passed byIncome Tax Appellate Tribunal, Chandigarh Bench, Chandigarh on4.4.2003 for the assessment year 1992-93. The revenue has claimedfollowing substantial question of law: - “Whether, on the facts and in the circumstances of the case,the Tribunal was right in law in holding that the amount ofRs. 14,45,700/- retained by the authorities, could not betreated as assessee's income for the year in spite of fact thatincome was being assessed on accrual basis”? Respondent-company is engaged in construction work. For the relevant accounting year, the assessee filed its return ofincome declaring net loss of Rs. 1,17,39,640/-. The AssessingOfficer made additions during the course of assessment whichincludes disallowance on account of retention money retained bythe authority on whose behalf work was carried out, awaiting successful completion of the work. The disallowance ordered by theAssesssing Officer was set aside by the Commissioner of Income Tax(Appeals). The said order was affirmed by the Tribunal. Learned counsel for the assessee relied uponCommissioner ofIncome Tax vs. Chanchani Brothers (Contractors) Pvt. Ltd,161 ITR, 418Patna, Commissioner of Income Tax, Simplex Concrete Piles (India) Pvt.Ltd.,179 ITR 8 (Calcutta),Commissioner of Income Tax vs. East CoastConstructions and Ind. Ltd, (2006) 283 ITR 297 (Mad), Commissioner ofIncome Tax vs. Associated Cables P. Ltd,(2006) 286 ITR 596 (Bom)Commissioner of Income Tax vs. P & C Constructions (P) Ltd., (2009) 318ITR 113 (Mad) , wherein, it has been held that the right to receive retentionmoney accrues only after the obligations under the contract are fulfilled.Therefore, it will not amount to income of the assessee in the year in whichamount is retained. In view of the consistent view of the different High Courts withwhich we respectfully agree, we do not find any substantial question of lawarises for consideration. Dismissed. (HEMANT GUPTA)JUDGE 06.05.2013preeti (RITU BAHRI) JUDGE