9911796707
TMI Blog2012 (11) TMI 905X X X X Extracts X X X X X X X X Extracts X X X X ..... ake of convenience these are being disposed of by passing a consolidated order by taking the facts for assessment year 2002-03. 2. The common grounds taken by the Revenue reads as under:- "The ld. CIT(A)-Gandhinagar has erred in law and facts by holding that retention money cannot be included in total income of the assessee. "The ld. CIT(A) has erred in law and facts by deciding that retention money does not accrue or arise to the assessee when the bills are raised, but, only on final receipt of retention money on satisfactory completion of work." 3. The brief facts of the case are that the assessee is involved in the contract for construction of Jetty and breakwater facility at Dahej, Gujarat for Petronet LNG Ltd (PLL). The assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed bank guarantee as a measure and as obligation for its due performance. The assessee relied on various case laws before the A.O. However, the A.O., placing reliance on the decision of Hon'ble ITAT, Ahmedabad in the case of DCIT Vs. Amarshiv Construction (P) Ltd. 88 ITD 381 disallowed a sum of Rs.5,06,30,188/- in respect of retention money. Before ld. CIT(A) the assessee filed written submissions which have been reproduced by ld. CIT(A) at para 2.2 and 2.2.1 of his order. After taking into consideration these submissions of the assessee ld. CIT(A) allowed the appeal of the assessee by observing as under:- "The issue has been given due consideration. The judicial decisions relied upon by the appellant are very clear on the issue. To the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retention money" can not be included in the total income." Aggrieved by this order of ld. CIT(A) now the Revenue is in appeal before us. 4. At the time of hearing, ld. D.R. relied on the order of the A.O. and further submitted that ld. CIT(A) was not justified by holding that retention money did not accrue or arise to the assessee when the bills were raised but only on final receipt of retention money on satisfactory completion of the work. It was also submitted that ld. CIT(A) was not justified in not following the decision of Hon'ble ITAT of Ahmedabad Bench in the case of DCIT Vs. Amarshiv Construction (P) Ltd. (supra). Concluding his argument ld. D.R., therefore, submitted that the order passed by ld. CIT(A) may kindly be set aside and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon completion of warranty period. This amount retained was conditional on fulfillment of certain representations made by assessee to customers. As per the agreement entered into with the customers, amount retained was released against furnishing bank guarantee by a scheduled bank." The third member held of the tribunal had held as follows: ".......... As the performance guarantee remains and is enforceable without notice to the assessee, the income from the retention money cannot be recognized. Consequently, I have to agree with the learned Accountant Member that the retention money of 10% has to be excluded in computing the total income until the period of guarantee is over." We observe that the Hon'ble Jurisdictional High Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elease of retention money accrued to the assessee unconditionally. The learned Departmental Representative also did not dispute the above contention of learned Authorized Representative at the time of hearing. In view of above facts and decisions, and particularly that similar issue has been considered by the Hon'ble Mumbai High Court in the case of Associated Cables Pvt. Ltd. (supra) which has been followed by the learned CIT(A), we do not find any reason to interfere with the order of Ld. CIT(A). Hence, we uphold his order and reject the ground of appeal taken by the department." 7. We further find that that the facts of the case relied by the Revenue in the case of DCIT Vs. Amarshiv Construction (P) Ltd. (supra) are different than that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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