Tribunal Upholds Deletion of Retention Money Addition, Remands Issue to Assessing Officer

The Tribunal upheld the deletion of the addition of retention money, citing past precedents and Tribunal orders in the assessee's favor. The issue was remanded to the Assessing Officer for reconsideration in accordance with previous directions. The Revenue's appeal was allowed for statistical purposes.

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Issues:
Appeal against deletion of addition of retention money.

Analysis:
The Revenue appealed against the deletion of an addition of Rs.99,99,041 made on account of retention money by the Commissioner of Income-Tax (Appeals). The Assessing Officer (A.O.) observed that the assessee had excluded the retention money from profits, but the assessee argued that the right to receive the money had not accrued during the year. The A.O. contended that under the Mercantile System of accounting, the money should be accrued as soon as entries are made in the books. However, the CIT(A) deleted the addition, citing past decisions in favor of the assessee in similar cases.

The CIT(A) referred to previous appellate orders in favor of the assessee in different assessment years, which led to the deletion of the addition. Both parties agreed that the issue was in favor of the assessee based on Tribunal orders in the assessee's case for different years. The Tribunal decided to restore the issue back to the A.O. for reconsideration in line with the directions given in a previous case. Following the Tribunal's orders in the assessee's case, the issue was sent back to the A.O. for further review. Consequently, the appeal of the Revenue was allowed for statistical purposes.

In conclusion, the Tribunal upheld the decision to delete the addition of retention money, based on past precedents and Tribunal orders in the assessee's case. The issue was remanded back to the Assessing Officer for further consideration in line with the Tribunal's directions in a previous case. The appeal of the Revenue was allowed for statistical purposes, and the decision was pronounced in court on a specified date.

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