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2018 (6) TMI 1101 - ITAT MUMBAIAddition on account of retention money - Year of assessment - method of accounting - Held that:- the accounting treatment given by the assessee in its Books of account cannot decide the accrual of income in law. It is now well settled that accounting entries are not determinative of taxability of income or deductibility of any expenditure. A mere book keeping entry cannot be income unless income has actually resulted. 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.’ Merely because retention money is accounted for in the books of account, that by itself does not make it taxable in A.Y. 2010-11 when in law the same cannot be said to have accrued in that year as discussed above. We do not find any infirmity in the order of CIT(A) for directing the AO to tax the retention money in the year of actual receipt and not in the year of completion of contract.
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