1991 (7) TMI 29

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....ower Corporation Ltd., on account of excess measurement is only a deposit and not income liable to tax, ignoring the fact that the assessee was offering its income on receipt basis ? " On the face of it, the assumption that the amount referred to in the above question was on account of excess measurement and was treated as a deposit and not as income looks to be a finding of fact. However, learned counsel for the Revenue seriously challenged this assumption of ours and contended that the assessee had been maintaining cash system of accounting and, therefore, whatever amount was received for the work done or purported to have been done, such receipt should be assessed during the year of receipt. The relevant findings and the basis ther....

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....---------------------- Soft rock 1,79,579.94 cu. m. 1,27,844 cu. m. 67,51,735.3 cu. m. excavation Hard rock 3,14,239.27 cu.m. 80,929.29 cu. m. 2,33,309.9 cu. m. ----------------------------------------------------------------------------------------------------------------------------------------------- It was submitted that it was the practice of the Corporation to make payments in excess of what was actually due to the assessee. These were really in the nature of advances. Final adjustments were made at the end of the contract. Payments for excess measurements unless made on the interim period which were not unusual were finally adjusted. However, the Power Corporation, to safeguard itself, had obtained large security depos....