AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (12) TMI 178
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....uestions of law : "[A] Whether the Appellate Tribunal is right in law and facts of the case to delete the disallowance of claim on account of retention money of Rs. 40,32,955/-? [B]Whether the Appellate Tribunal is right in law and on facts in upholding the order of the CIT (A) to delete the disallowance u/s 14A of the Act Rs. 28,36,668/- on account of interest and administrative expenses when assessee had failed to discharge its onus to prove the nexus of interest free funds utilized for the purpose of making investments earning exempt income?" 2. The assessment year is 2005-06 and the relevant accounting period is the financial year 2004-05. The Assessing Officer had made additions on the gro....
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....ssee in the financial year under consideration and hence, when the assessee is following the mercantile system of accounting, the part of the sales consideration "claimed to be retained" is required to be accounted for during the current year. 4. This, court has considered the submissions advanced by the learned counsel for the appellant. It, however, is an admitted position that an identical question arose for consideration before this court in Tax Appeal No.144 of 2013, wherein, while dismissing the appeal the court held thus: "6. Having heard learned counsel for the Revenue and having perused the documents on record, we find that the issue under consideration is squarely covere....
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....ssee by virtue of clause No. 14 of the contract and as the assessee did not get any right to receive the said amount during the previous year in question, it cannot be said that income in respect of the amount in question had been accrued to the assessee during the previous year in question. Looking to the facts of the present case and in the light of the law laid down by the Hon'ble Supreme Court in the cases referred to hereinabove, it is very clear that unless and until a debt is created in favour of the assessee, which is due by somebody, it cannot be said that the assessee has acquired a right to receive the income or that the income has accrued to him. A debt must have come into existence and the assessee must have acquired a righ....
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....t a vested right to get the said amount? Answer to these questions would be in negative and, therefore, as observed hereinabove, it cannot be said that income had accrued to the assessee. A similar question had arisen in case of C.I.T. v. Simplex Concrete Piles (India) Pvt. Ltd., 179 ITR 8, (Cal.). Having regard to the facts and circumstances of the case, it was held in that case that, when there is a clause with regard to retention money, the assessee gets no right to claim any part of the retention money till the verification of satisfactory execution of the contract is concluded and, therefore, if there is no immediate right to receive the retention money, the said amount cannot be said to have accrued to the assessee. Even in the instan....
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....s recorded by the Commissioner (Appeals). 6. From the facts and contentions noted hereinabove, it is amply clear that the controversy involved in this case stands concluded in favour of the assessee and against the revenue by the above decision of this court. Under the circumstances, no question of law can be stated to arise as proposed. This ground of appeal is, therefore, dismissed. 7. Insofar as the second question which relates to addition of Rs. 28,36,668/- under section 14A of the Act on account of interest and administrative expenses is concerned, the Tribunal has taken note of the fact that the matter had initially been restored to the file of the Commissioner (Appeals) with a specific direction to bring out clearly as to whet....