Retention money accrues only on contract completion, so contingent amounts are not taxable in the year retained.

Retention money under a contract does not accrue as income until the contractual obligations are satisfactorily completed, because the right to receive it remains contingent on fulfilment of those conditions. On that principle, the retained amount was treated as deferred rather than accrued income, and it was not taxable in the relevant year.

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Issues: Whether retention money under a contract accrues as income of the assessee in the year in which it is retained.

Analysis: The right to receive retention money arises only upon satisfactory completion of the contractual obligations. Until the contractual conditions are fulfilled, the amount retained does not represent income accrued to the assessee in that year. The cited High Court decisions were followed on the principle that such retention money is deferred and contingent.

Conclusion: Retention money did not accrue as income in the relevant year and was not taxable in that year.

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