2006 (1) TMI 76

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.....- This appeal has been filed by formulating the following substantial question of law for our consideration: "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that moneys retained by the contractors, as a percentage of the bills raised to be paid after the contract is completed is to be treated as income only when the moneys are actually received, even tho....

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....nting and in respect of 10 per cent, retention, the bill has been raised on completion of work and brought the same into account on accrual basis. On appeal by the assessee, the Commissioner of Income-tax (Appeals), deleted that portion of inclusion of amount, which was further confirmed on appeal by the Tribunal at the instance of the Revenue. That order is canvassed before this court. The fac....

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....me at which the liability to tax is attracted, viz., the accrual of the income or its receipt; but the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a 'hypothetical income', which does not materialise. Where income has, in fact, been received and is subsequently given up in such circumstances that....