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Issues involved: Appeal against deletion of retention amount on contract u/s 143(3) by CIT(Appeals).
Summary: Issue 1: Retention amount on contract The Revenue appealed against the deletion of retention amount on contract of Rs. 3,93,59,310 by the A.O., which was subsequently deleted by CIT(Appeals). The Assessee, engaged in contract business, claimed deduction for money retained by clients as per contracts, arguing that such amounts were yet to be received and should not be considered as income for the assessment year. The A.O. disagreed, stating that the decision of the jurisdictional High Court had not attained finality, and due to the recurring nature of the issue, the claim could not be allowed. However, CIT(Appeals) ruled in favor of the Assessee, citing the precedent set by the jurisdictional High Court in a similar case and allowing the claim for earlier years as well. Issue 2: Jurisdictional High Court's decision The Revenue contended that the decision of the jurisdictional High Court had not been accepted and a Special Leave Petition (SLP) had been filed before the Supreme Court. Conversely, the Assessee's representative informed that the SLP filed by the Revenue against the High Court's decision stood dismissed. Upon review and considering the arguments, the Tribunal emphasized that regardless of the pending SLP before the Supreme Court, the decision of the jurisdictional High Court must be adhered to by all lower authorities unless a contrary decision is provided by the Apex Court or a stay order is obtained by the Revenue. The Tribunal upheld CIT(Appeals)'s decision to allow the Assessee's claim for deduction of retention amounts, leading to the dismissal of the Revenue's appeal. This judgment highlights the importance of following the decisions of the jurisdictional High Court until overruled by a higher authority, emphasizing the significance of legal precedents in tax matters.
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