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Associated Cables Pvt. Ltd. vs Deputy Commissioner Of Income-Tax on 25 November, 1993 cites

Commissioner Of Income-Tax vs Simplex Concrete Piles (India) Pvt. ... on 5 December, 1988

56. I am afraid I am unable to agree with the observation of the learned Judicial Member regarding his observations on the decision of the Calcutta High Court in the case of CIT v. Simplex Concrete Piles (India) Pvt. Ltd. [1989] 179 ITR 8. It will be in the fitness of things to reproduce the summary of the case given in the Income Tax Reports in this order, which is as below (headnote) :
Calcutta High Court Cites 5 - Cited by 87 - Full Document

Morvi Industries Ltd vs Commissioner Of Income Tax ... on 5 October, 1971

62. Before me, both sides presented elaborate arguments with reference to the principles relating to the accrual of income and in particular the right to receive the amounts. It was pointed out on behalf of the Revenue that this claim has been made by the assessee for the first time in this year even though the assessee had been taking into account 100% of the receipt in the earlier years and thus there was a change in the method of accounting which could not be allowed. The Revenue relied on the decision in Morvi Industries Ltd. v. CIT [1971] 82 ITR 835 (SC). On the other hand, it was contended on behalf of the assessee that there was no change in the method of accounting which remained the mercantile method of accounting. According to the assessee, it had not correctly understood the concept of accrual of income and on proper advice it was taking the position that the retention money had not accrued and had therefore to be left out of the total income. The assessee relied on the following decisions:
Supreme Court of India Cites 6 - Cited by 196 - H R Khanna - Full Document

Mental Box Co. Of India Ltd vs Their Workmen on 20 August, 1968

64. In the present case, even though the assessee had received the balance of 10 per cent., the bank guarantee for performance clearly shows that the receipt was at the risk of losing the amount if there was any defect in the goods. It would appear that this situation was a contingency and it is possible to view this as a contingent expenditure. But as held by the Supreme Court in the case of Metal Box Company of India Ltd. v. Their Workmen [1969] 73 ITR 53, contingent liabilities discounted and valued as necessary can be taken into account as trading expenses if they are sufficiently certain to be capable of valuation and if profits cannot be properly estimated without taking them into account. In my opinion that would probably be the correct method, viz., to take into account 100 per cent. of the price and provide as against that an estimated amount as a provision for performance guarantee. However, as a Third Member hearing the appeal, I have no jurisdiction to resolve the issue in a manner different from that made by the other two Members. I have perforce to agree either with the learned Judicial Member or with the learned Accountant Member. Keeping in mind the principle of income recognition which is a basis of the mercantile method of accounting, I have to agree with the learned Accountant Member that as long as the performance guarantee remains and is enforceable without notice to the assessee, the income from the retention money cannot be recognised. Consequently, I have to agree with the learned Accountant Member that the retention money of 10 per cent. has to be excluded in computing the total income until the period of guarantee is over. The appeal will now be placed before the Bench for passing an order conformably with the majority of the Members who heard the appeal.
Supreme Court of India Cites 47 - Cited by 433 - J M Shelat - Full Document
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