Search Results Page
Search Results
1 - 10 of 21 (0.27 seconds)Commissioner Of Income-Tax vs Simplex Concrete Piles (India) Pvt. ... on 5 December, 1988
We note from the relevant clauses of the contract
that the contractees had the right to withhold certain percentage of the
consideration till the conclusion of the project and only after certification of
concluded projects the retained portion of the amounts are disbursed finally
which may be in the succeeding assessment years and is contingent upon the
terms and conditions of the contract. We also note that the AO has not
disputed the amount which has been retained by the contractees. In such a
scenario, merely because the assessee had booked the income in this year
without actual receipt of it, cannot be chargeable to tax as per the Act. The
reasons given by the AO to disallow the claim of the assessee cannot be
sustained and was rightly repelled by the Ld. CIT(A) whose view to accept
the claim of assessee is based on the accepted judicial precedents laid down
by the Hon'ble jurisdictional High Court in CIT Vs. Simplex Concrete Piles
(supra); Hon'ble Gujarat High Court in Anup Engineering Ltd. (supra);
E. D. Sassoon And Company Ltd vs The Commissioner Of Income-Tax,Bombay ... on 14 May, 1954
We note from the relevant clauses of the contract
that the contractees had the right to withhold certain percentage of the
consideration till the conclusion of the project and only after certification of
concluded projects the retained portion of the amounts are disbursed finally
which may be in the succeeding assessment years and is contingent upon the
terms and conditions of the contract. We also note that the AO has not
disputed the amount which has been retained by the contractees. In such a
scenario, merely because the assessee had booked the income in this year
without actual receipt of it, cannot be chargeable to tax as per the Act. The
reasons given by the AO to disallow the claim of the assessee cannot be
sustained and was rightly repelled by the Ld. CIT(A) whose view to accept
the claim of assessee is based on the accepted judicial precedents laid down
by the Hon'ble jurisdictional High Court in CIT Vs. Simplex Concrete Piles
(supra); Hon'ble Gujarat High Court in Anup Engineering Ltd. (supra);
National Cement Mines Industries, Ltd vs Commissioner,Of Income-Tax, West ... on 17 January, 1961
6.3 While determining the nature of the receipt as being a trading receipt
taxable as income from business or profession or otherwise, one should be
guided by the terms of the agreement entered into between the parties.
Revenue authorities cannot ignore the genuine agreement between the
assessee and the concerned parties from whom the said amount has been
received. In the absence of any situation or allegation or collusion, the
revenue cannot resort to any attempt to rewrite the agreement with a view to
impose the levy of tax shall be when the transaction between the parties are
at arm's length For this proposition we rely on the judgement of Hon'ble
Delhi High Court in the case of D.S. Bist & Sons (149 ITR 276), wherein
held that "The Act does not clothe the taxing authorities that any power or
jurisdiction rewrite terms of agreement entered into, particularly in view of
the finding of the Tribunal that "there is nothing to suggest the parties were
not belong with each other at arm's length and there is no situation of any
collusion, commercial expediency of the contract is to be adjusted by the
contracting parties as to its terms. It was further made clear that under the
taxing system it is up to the assessee to conduct his business in his wisdom.
The assessee may enter into commercial transaction with other party who
has ad idem with the assessee as to the terms & conditions. In the absence
of any collusion between the two, it is not possible to vary the terms."
Further, Hon'ble Supreme Court in the case of National Cements Mines
Ltd. Vs. CIT (42 ITR 69) held that "in assessing the true character of the
receipt for the purpose of income tax, inability to ascribe to the transaction
a definite category is of little consequence. It is not the nature of the receipt
under the general law. But in the commerce that is material."
Commissioner Of Income-Tax vs Ignifluid Boilers (I) Ltd. on 5 January, 2006
Hon'ble Bombay High court in CIT Vs. Associated Cables P. Ld. (supra)
and Hon'ble Madras High Court in CIT Vs. Ignifluid Boilers (I) Ltd. (2006)
283 ITR 295 (Mad). We hold that in the factual circumstances especially as
per the terms of contract between the assessee and the contractee, the
retention money retained by the contractee is deferred payment and is
contingent upon satisfactory completion of contract work. We hold that the
right to receive the retention money is accrued only after the obligations
under the contract are fulfilled and the assessee had no vested right to
receive the same in this assessment year, therefore, it would not amount to
an income of the assessee in the year in which it is retained. Therefore, we
do not find any infirmity in the order of the Ld. CIT(A) and so, we confirm it
and dismiss the appeal of the Revenue."
Section 44AB in The Income Tax Act, 1961 [Entire Act]
The Income Tax Act, 1961
Commissioner Of Income-Tax, Bombay ... vs Shoorji Vallabhdas And Co. on 27 March, 1962
In other words, the treatment accorded by assessee in his books of accounts
does not affect the true nature of the receipt. For this purpose, we place
reliance on the judgement of Hon'ble Supreme Court in the case of CIT Vs.
Shoorji Vallabhadas & Company (46 ITR 144).
The Commissioner Of Income Tax vs M/S.East Coast Constructions & Ind. Ltd on 21 January, 2006
ITA No.661 & 662/Bang/2023
Page 8 of 20
6.5 Further, Madras High Court in the case of CIT Vs. East Cost
Construction and Ind Ltd. (283 ITR 297), wherein held that "the assessee
was entitled to receive the retention money after completion of the contract.
On the date of the bills, no enforceable liability had accrued or arisen.
When the assessee had no right to receive the money by virtue of the
contract between the parties and the assessee also had no right to enforce
payment, it could not said that the right to receive payment of the remaining
10 percent of the value of job had accrued." In view of the discussion, the
amount has not accrued to the assessee. The right to receive will accrue
only after fulfillment of condition laid down in contract entered by the
respective parties only then this amount cannot be said to be accrued to the
assessee. Even if it is received against bank guarantee the bank guarantee
could be revoked at any time at the pleasure of the payee. In such
circumstances, this impugned amount cannot be brought to tax in the
assessment year under consideration. More so, the said amount was
actually offered for tax in subsequent assessment year and the department
accepted the same in the subsequent assessment as income of the assessee
and bringing the same amount to tax in this assessment year amount to
double taxation, which cannot be permitted.
Vodafone Idea Ltd(Earlier Known As ... vs Assistant Commissioner Of Income Tax ... on 29 April, 2020
5. The decision of the ITAT Mumbai 'H' Bench of the Tribunal in the
case of Emerson Network Power India (P.) Ltd. v. Assistant
Commissioner of Income-tax [2009] 27 SOT 593 (MUM.) relied upon
by the Id. D/R is not applicable to the facts of the case, for the reason
that, what was considered by the Bench was performance bank
guarantee and not retention money as in the case of the assessee
company.