2014 (11) TMI 1233 - HC - Income Tax

Accrual of income - claim of deduction of the amounts retained by its clients as per the contracts - According to the assessee, as the amounts were not received, they cannot be considered as part of income for the impugned assessment year - HELD THAT - The original authority, while considering the decision of this Court in Commissioner of Income Tax v. Ignifluid Boilers (P) Ltd.,. 2006 (1) TMI 76 - MADRAS HIGH COURT was of the view that since the issue was pending before the Supreme Court and that such a claim is of recurring nature, declined to extend the benefit to the assessee. The Commissioner of Income Tax (Appeals), however, laying emphasis on the decision of this Court in Ignifluid Boilers (P) Ltd., case (supra), allowed the appeal of the assessee and the department's appeal before the Tribunal was dismissed holding that the decision of the jurisdictional High Court is binding on the Tribunal and therefore there was no reason to differ with the findings of the Commissioner of Income Tax (Appeals). The said order of the Tribunal is under challenge before us. When the matter was taken up for admission, the learned counsel for the appellant fairly pointed out that the Special Leave Petition preferred by the department in Ignifluid Boilers (P) Ltd., case was dismissed by the Supreme Court 2006 (7) TMI 726 - SC ORDER Since the issue raised in this appeal had already been decided against the department as Commissioner of Income Tax v. M/s Ignified Boilers India Ltd.(Supra) and in Commissioner of Income Tax v. East Coast Constructions Industries Limited 2006 (12) TMI 574 - SC ORDER no question of law arises for consideration.

Summary

Issues:
1. Claim for deduction of amounts retained by clients in contract business for impugned assessment year.

Analysis:
The respondent-assessee, engaged in contract business, claimed a deduction for amounts retained by clients as per contracts in the memo of income. The original authority, considering a decision of the High Court, declined the claim due to the pending issue before the Supreme Court and its recurring nature. However, the Commissioner of Income Tax (Appeals) allowed the appeal based on the High Court's decision, which was upheld by the Tribunal. The Tribunal's order, challenged before the High Court, was based on the binding nature of the High Court's decision on them.

Upon admission, it was revealed that the Supreme Court had dismissed a Special Leave Petition by the department against the High Court's decision in a similar case. The High Court noted that the issue raised in the present appeal had already been decided against the department by the Supreme Court in previous cases, emphasizing that no question of law arose for consideration. Consequently, the tax case appeal was dismissed based on the Supreme Court's previous judgments in similar matters.

In conclusion, the High Court dismissed the tax case appeal, citing the Supreme Court's previous decisions that had already settled the issue raised in the present case. The High Court held that since the matter had been conclusively decided by the Supreme Court in earlier cases, there was no legal question requiring further consideration.