https://www.taxtmi.com/caselaws?id=14654 Whether an amount shown as receivable under a contract could be taxed on accrual despite contemporaneous warranty disputes and a retention clause was determined by applying s.5(1)(b) read with s.4 of the Act and the SC test that income accrues only when a vested right to receive arises. As the purchaser could retain payment until satisfactory performance and disputes in the same previous year put the receivable in jeopardy, the right to receive was not vested and no accrual arose; the addition was unsustainable. Alternatively, even assuming accrual, the warranty obligation to rectify defects arose in the same year and was deductible against such income. The assessee's claim was allowed and the Tribunal's disallowance was held erroneous. en-us Thu, 06 Jul 2000 00:00:00 +0530 Sat, 20 Dec 2025 20:40:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=14654 Whether an amount shown as receivable under a contract could be taxed on accrual despite contemporaneous warranty disputes and a retention clause was determined by applying s.5(1)(b) read with s.4 of the Act and the SC test that income accrues only when a vested right to receive arises. As the purchaser could retain payment until satisfactory performance and disputes in the same previous year put the receivable in jeopardy, the right to receive was not vested and no accrual arose; the addition was unsustainable. Alternatively, even assuming accrual, the warranty obligation to rectify defects arose in the same year and was deductible against such income. The assessee's claim was allowed and the Tribunal's disallowance was held erroneous. Case-Laws Income Tax Thu, 06 Jul 2000 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=14654