2015 (6) TMI 1240 - AT - Income Tax

Recognition of income - Disallowance of retention money - HELD THAT - As relying on own case 2015 (4) TMI 1344 - ITAT AHMEDABAD set aside the orders of the authorities below and restore this issue to the file of the AO for reconsideration of the same in the light of the above decisions cited by the learned Counsel for the assessee. The AO shall also verify the details filed by the assessee on this issue and shall pass reasoned order in accordance with law by giving reasonable sufficient opportunity of being heard to the assessee.

Summary

Issues:
- Appeal against deletion of addition of Rs. 7 lacs for disallowance of retention money by Ld. Commissioner of Income Tax (Appeals) for Assessment Year 2005-06.

Analysis:
1. The revenue appealed against the deletion of Rs. 7 lacs addition for disallowance of retention money by the Assessing Officer. The case involved scrutiny assessment of the assessee's return of income for the year 2005-06, where the Assessing Officer added Rs. 7 lacs as retention money to the income of the assessee. This addition was deleted by the Ld. Commissioner of Income Tax (Appeals) citing a similar deletion in the past.

2. The Tribunal referred to a previous order in the assessee's case for Assessment Year 2008-09, where a similar addition of Rs. 99,99,041/- for retention money was deleted by the CIT(A). The Tribunal upheld the deletion based on the assessee's contention that the right to receive retention money had not accrued during the year under consideration. The Tribunal noted that the issue was consistent with previous decisions in favor of the assessee for Assessment Years 2002-03 and 2006-07.

3. The Tribunal agreed to set aside the issue to the file of the Assessing Officer for re-adjudication, following the direction given in a previous order for Assessment Year 2006-07. Both parties concurred that the matter required reconsideration in light of relevant decisions. The Tribunal emphasized the need for the Assessing Officer to examine the facts of the case and provide a reasoned order after giving the assessee a sufficient opportunity to be heard.

4. The Tribunal allowed the appeal of the revenue for statistical purposes and directed the issue to be reconsidered by the Assessing Officer in line with previous decisions. Despite the tax effect being below 3 lacs, the Tribunal decided to adjudicate the issue on merit due to its consistency across multiple years, following the precedent set by the Co-ordinate Bench.

5. In conclusion, the Tribunal allowed the appeal of the revenue for statistical purposes, setting aside the issue for re-adjudication by the Assessing Officer in accordance with previous decisions and directions provided by the Tribunal in similar cases.