- The ground of appeal raised by the revenue was that the Commissioner of lncome-tax (Appeals) had erred in directing to exclude retention money of Rs. 28.87 lakhs in computing total income under normal provisions as well as in computing book profits under section 115JB.
- In the present facts of the case, as per the terms of contract between the Assessee and the contractee, the retention money retained by the contractee was a deferred payment and was contingent upon satisfactory completion of contract work.
- The right to receive the retention money could be accrued only after the obligations under the contract were 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 was retained.
- Hence, the retention money had to be excluded while computing income under normal provisions as well as under section 115JB.
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