292 ITR 399, 252 ITR 802, CIT v. East Coast Constructions and Industries Limited

283 ITR 297High Court2006#8371 most cited

What is 292 ITR 399, 252 ITR 802, CIT v. East Coast Constructions and Industries Limited authority for?

Retention money, withheld by a contractee until the completion of a contract, does not accrue to the assessee and is therefore not taxable in the year it is retained, even if the assessee follows the mercantile system of accounting.

13

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2017 to 2025.

Also referred to as

CIT v. East Coast Constructions and Industries Limited · 283 ITR 297 · retention money · accrual of income · mercantile system of accounting · income tax · contract completion · taxable income

Judgments citing 292 ITR 399, 252 ITR 802, CIT v. East Coast Constructions and Industries Limited

M/S Kumar Piyush Construction Private Ltd, Nalanda vs. Pr. CIT-1, Patna

In the result, the appeal filed by the assessee is dismissed

ITA 156/PAT/2019[2014-15]Status: DisposedITAT Patna08 Jan 2025AY 2014-15

Bench: SHRI DUVVURU RL REDDY, VICE PRESIDENT SHRI SANJAY AWASTHI (Accountant Member)

Section 143(3)Section 263Section 43B

…vision proceedings. Ground number 4 grossly erred in not holding that "retention money' is not liable to tax in view of the rulings in case of Simples Concrete Piles (India) Private Limited (197 ITR 8) (Cal) and East Coast Construction and Industries Limited (283 ITR 297) (Mad) while passing its order under Section 263 of the Act. The Appellant craves leave to add, alter, amend, modify, rescind or supplement one or more of the ground at any time before, or at the time of hearing.” 2.1. On the last date of hearing, none appeared on behalf of the assessee, however, since this is a very old pending matter, it was de…

M/S Bellary Iron-Ores Private Limited, Bellary vs. The Assistant Commissioner of Income Tax Circle-1, Bellary

ITA 15/BANG/2019[2015-16]Status: DisposedITAT Bangalore20 Sept 2023AY 2015-16

Bench: Shri Chandra Poojari & Ms. Madhumita Royassessment Year: 2014-15

For Appellant: Shri Shivprasad Reddy, A.RFor Respondent: Shri D.K. Mishra, D.R
Section 102Section 139(1)Section 173Section 194ASection 226(3)

…nt also, a Division Bench of the Madras High Court has held that the amount retained does not accrue to the assessee and, therefore, the assessee would not be liable.” 6.5 Further, Madras High Court in the case of CIT Vs. East Cost Construction and Ind Ltd. (283 ITR 297), wherein held that “the assessee was entitled to receive the retention money after completion of the contract. On the date of the bills, no enforceable liability had accrued or arisen. When the assessee had no right to receive the money by virtue of the contract between the parties and the assessee also had no right to enforce payment, it could…

M/S Bellary Iron-Ores Pvt Ltd, Bellary vs. The Income Tax Officer Ward-2, Hospet

ITA 1540/BANG/2018[2014-15]Status: DisposedITAT Bangalore20 Sept 2023AY 2014-15

Bench: Shri Chandra Poojari & Ms. Madhumita Royassessment Year: 2014-15

For Appellant: Shri Shivprasad Reddy, A.RFor Respondent: Shri D.K. Mishra, D.R
Section 102Section 139(1)Section 173Section 194ASection 226(3)

…nt also, a Division Bench of the Madras High Court has held that the amount retained does not accrue to the assessee and, therefore, the assessee would not be liable.” 6.5 Further, Madras High Court in the case of CIT Vs. East Cost Construction and Ind Ltd. (283 ITR 297), wherein held that “the assessee was entitled to receive the retention money after completion of the contract. On the date of the bills, no enforceable liability had accrued or arisen. When the assessee had no right to receive the money by virtue of the contract between the parties and the assessee also had no right to enforce payment, it could…

Bsr Infratech India Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(1), Bangalore

In the result, the appeal of the assessee is partly allowed

ITA 697/BANG/2022[2017-18]Status: DisposedITAT Bangalore27 Oct 2022AY 2017-18

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2017-18

For Appellant: Shri Madhusudhan, A.RFor Respondent: Shri Praveen Karanth, D.R
Section 199Section 234ASection 270ASection 43Section 43C

…obligations under the contract are fulfilled and, therefore, it would not amount to an income of the assessee in the year in which the amount is retained". (ii) High Court of Madras in Commissioner of Income Tax vs East Coast Constructions and Industries Ltd (283 ITR 297) (Mad) held that "moneys retained by the contractee, as a percentage of the bills raised to be paid after the contract was completed, were to be treated as income only when the moneys were actually received, even though the assessee was following a mercantile system of accounting". High Court of Madras in Commissioner of Income Tax (iii) vs Ignif…

K Poongavanam, Chennai vs. ACIT, Circle-1, Chennai

In the result, the appeal of the assessee is dismissed

ITA 3172/CHNY/2018[2011-12]Status: DisposedITAT Chennai31 Jul 2019AY 2011-12

Bench: Shri Duvvuru Rl Reddy & Shri S. Jayaramanआयकर अपील सं./I.T.A.No.3172/Chny/2018 ("नधा"रण वष" / Assessment Year: 2011-12) Vs The Acit, Shri K. Poongavanam, No.5, Arasamara St, Circle – 1, Somavarakula, Chengam Road, Vellore. 5Th Street, Tiruvannamalai – 606 601. Pan: Akgpp0094H (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/ Appellant By : Shri T.N. Seetharaman, Advocate ""यथ" क" ओर से/Respondent By : Shri Clement Ramesh Kumar, Jcit

For Appellant: Shri T.N. Seetharaman, AdvocateFor Respondent: Shri Clement Ramesh Kumar, JCIT
Section 142(1)

…TAT should not remit this issue back. Thereafter the Ld.AR pleaded that the case may be remitted back and relied on certain case laws viz., (i) CIT vs. P&C Constructions (P) Ltd (2009) 318 ITR 113 (Mad) (ii) CIT v. East Coast Constructions and Ind. Ltd (2006) 283 ITR 297 (Mad) (iii) CIT vs. Ignifluid Boilers (I) Ltd (2006) 283 ITR 295 (Mad) 5. We heard the rival submissions. From the above, it is clear that the assessee has not made any attempt to produce any document / voucher / primary material either before the Assessing Officer or before the Ld.CIT(A) or before this Tribunal in support of its contention. Whe…

ACIT, Chennai vs. East Coast Construction & Industries Limited, Chennai

In the result, the Revenue’s appeal in ITA No

ITA 1433/CHNY/2016[2012-13]Status: DisposedITAT Chennai14 Feb 2018AY 2012-13

Bench: Shri George Mathan & Shri S. Jayaraman

For Appellant: Shri. G. Baskar, AdvocateFor Respondent: Shri. D. PrabhuMukunthArun Kumar
Section 263bSection 80Section 801ASection 80I

…आयकरअपील"यअ"धकरण ,’सी’ "यायपीठ,चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, CHENNAI "ी जॉज" माथन, "या"यक सद"यएवं"ी एस जयरामन, लेखा सद"य केसम$ BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER आयकर अपील सं/.I.T.A. Nos. 1431, 1432 & 1433/Chny/2016 "नधा"रण वष"/Assessment Years : 2010-11, 2011-12 & 2012-13 Assistant Commissioner of Income M/s. East Coast Constructions & Tax, Vs. Industries Limited, Corporate Circle -2(1), No. 4, Buharia Buildings, Chennai – 600 034. Moores Road, Chennai – 600 006. [PAN: AAACE 1662P] (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकर अपील सं/.I.T…

ACIT, Chennai vs. East Coast Construction & Industries Limited, Chennai

In the result, the Revenue’s appeal in ITA No

ITA 1432/CHNY/2016[2011-12]Status: DisposedITAT Chennai14 Feb 2018AY 2011-12

Bench: Shri George Mathan & Shri S. Jayaraman

For Appellant: Shri. G. Baskar, AdvocateFor Respondent: Shri. D. PrabhuMukunthArun Kumar
Section 263bSection 80Section 801ASection 80I

…आयकरअपील"यअ"धकरण ,’सी’ "यायपीठ,चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, CHENNAI "ी जॉज" माथन, "या"यक सद"यएवं"ी एस जयरामन, लेखा सद"य केसम$ BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER आयकर अपील सं/.I.T.A. Nos. 1431, 1432 & 1433/Chny/2016 "नधा"रण वष"/Assessment Years : 2010-11, 2011-12 & 2012-13 Assistant Commissioner of Income M/s. East Coast Constructions & Tax, Vs. Industries Limited, Corporate Circle -2(1), No. 4, Buharia Buildings, Chennai – 600 034. Moores Road, Chennai – 600 006. [PAN: AAACE 1662P] (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकर अपील सं/.I.T…

ACIT, Chennai vs. East Coast Construction & Industries Limited, Chennai

In the result, the Revenue’s appeal in ITA No

ITA 1431/CHNY/2016[2009-10]Status: DisposedITAT Chennai14 Feb 2018AY 2009-10

Bench: Shri George Mathan & Shri S. Jayaraman

For Appellant: Shri. G. Baskar, AdvocateFor Respondent: Shri. D. PrabhuMukunthArun Kumar
Section 263bSection 80Section 801ASection 80I

…आयकरअपील"यअ"धकरण ,’सी’ "यायपीठ,चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, CHENNAI "ी जॉज" माथन, "या"यक सद"यएवं"ी एस जयरामन, लेखा सद"य केसम$ BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER आयकर अपील सं/.I.T.A. Nos. 1431, 1432 & 1433/Chny/2016 "नधा"रण वष"/Assessment Years : 2010-11, 2011-12 & 2012-13 Assistant Commissioner of Income M/s. East Coast Constructions & Tax, Vs. Industries Limited, Corporate Circle -2(1), No. 4, Buharia Buildings, Chennai – 600 034. Moores Road, Chennai – 600 006. [PAN: AAACE 1662P] (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकर अपील सं/.I.T…

East Coast Constructions and Industries Limited, Chennai vs. DCIT, Chennai

In the result, the Revenue’s appeal in ITA No

ITA 864/CHNY/2015[2010-2011]Status: DisposedITAT Chennai14 Feb 2018AY 2010-2011

Bench: Shri George Mathan & Shri S. Jayaraman

For Appellant: Shri. G. Baskar, AdvocateFor Respondent: Shri. D. PrabhuMukunthArun Kumar
Section 263bSection 80Section 801ASection 80I

…आयकरअपील"यअ"धकरण ,’सी’ "यायपीठ,चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, CHENNAI "ी जॉज" माथन, "या"यक सद"यएवं"ी एस जयरामन, लेखा सद"य केसम$ BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER आयकर अपील सं/.I.T.A. Nos. 1431, 1432 & 1433/Chny/2016 "नधा"रण वष"/Assessment Years : 2010-11, 2011-12 & 2012-13 Assistant Commissioner of Income M/s. East Coast Constructions & Tax, Vs. Industries Limited, Corporate Circle -2(1), No. 4, Buharia Buildings, Chennai – 600 034. Moores Road, Chennai – 600 006. [PAN: AAACE 1662P] (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकर अपील सं/.I.T…

Noble Consolidated Glazings Limited, Chennai vs. DCIT, Chennai

In the result, the assessee’s appeal is allowed for statistical purposes

ITA 26/CHNY/2017[2012-13]Status: DisposedITAT Chennai27 Jul 2017AY 2012-13

Bench: Shri Sanjay Arora & Shri Duvvuru Rl Reddy

For Appellant: Shri Nagendra Kumar, Dy. CITFor Respondent: 22.06.2017
Section 143(3)

…on the bills raised on its’ clients, claimed, consistent with it’s past practice, the money retained by its’ clients in the said revenue, subject to actual receipt, following, as stated, the decision in CIT v. East Coast Constructions & Industries Ltd. [2006] 283 ITR 297 (Mad), working the same to ". 1,31,32,011/-. While it pressed for the same in assessment proceedings, further citing decisions in CIT v. Ignified Boilers (I) Ltd. [2006] 283 ITR 395 (Mad) and CIT v. P & C Constructions (P.) Ltd. [2009] 318 ITR 113 (Mad), the Assessing Officer (AO) found the assessee’s claim untenable in view of the fact that the…

Mc Nally Sayaji Engineering Limited, North 24 Parganas vs. D.C.I.T Cir - 1, Kolkata

In the result, the appeals of the assessee in ITA No

ITA 927/KOL/2013[2009-10]Status: DisposedITAT Kolkata10 Mar 2017AY 2009-10

Bench: Shri M. Balaganesh, Am & Shri Partha Sarathi Chaudhury, Jm]

For Appellant: Smt. Shreya Loyalka, CAFor Respondent: Md. Ghayas Uddin, JCIT, Sr. DR
Section 143(3)Section 14A

…sion from computation of total income and shall be offered to tax as and when the same accrues to the company. The assessee placed reliance on the decisions of the Hon’ble Madras High Court in the case of East Coast Construction and Industries Ltd reported in 283 ITR 297 (Mad) ; Ignifluid Boilers (I) Ltd reported in 283 ITR 295 (Mad) and Hon’ble Calcutta High Court in the case of Simplex Concrete Piles Ltd reported in 179 ITR 8 (Cal). The ld AO showcaused the assessee to bring to tax the said retention money in the year under consideration. The assessee replied that it is mainly engaged in manufacturing and suppl…

DCIT, Circle - 1, Kolkata vs. M/S. Mcnally Sayaji Engineering Limited, Kolkata

In the result, the appeals of the assessee in ITA No

ITA 1575/KOL/2011[2008-09]Status: DisposedITAT Kolkata10 Mar 2017AY 2008-09

Bench: Shri M. Balaganesh, Am & Shri Partha Sarathi Chaudhury, Jm]

For Appellant: Smt. Shreya Loyalka, CAFor Respondent: Md. Ghayas Uddin, JCIT, Sr. DR
Section 143(3)Section 14A

…sion from computation of total income and shall be offered to tax as and when the same accrues to the company. The assessee placed reliance on the decisions of the Hon’ble Madras High Court in the case of East Coast Construction and Industries Ltd reported in 283 ITR 297 (Mad) ; Ignifluid Boilers (I) Ltd reported in 283 ITR 295 (Mad) and Hon’ble Calcutta High Court in the case of Simplex Concrete Piles Ltd reported in 179 ITR 8 (Cal). The ld AO showcaused the assessee to bring to tax the said retention money in the year under consideration. The assessee replied that it is mainly engaged in manufacturing and suppl…

DCIT, New Delhi vs. M/S. Capital Care India Pvt. Ltd., Delhi

In the result, the appeal of the Revenue is dismissed

ITA 81/DEL/2014[2010-11]Status: DisposedITAT Delhi06 Feb 2017AY 2010-11

Bench: : Shri H.S. Sidhu & Shri L.P. Sahu

For Appellant: Sh. Anil Kumar Sharma, Sr. DRFor Respondent: Sh. R.S. Ahuja, C.A
Section 142(1)

…and hence, it is taxable only when, it has accrued or is received by the assessee as held in CIT Vs. P&C Construction (P) Ltd (2009) 318 ITR 113, CIT Vs. Ignifluid Borders (I) Ltd. (2006) 283 ITR 295 (Mad) & CIT Vs. East Coast Constructions & Ind. Ltd (2006) 283 ITR 297 (Mad). 5.1.10 As is seen in Accounting Standard 9 of ICAL which lays down that when uncertainties exist regarding determination of the amount or its collectability, the revenue should not be treated as accrued and hence shall not be recognized until collection. 5.1.11 Therefore by following the rule of consistency, the appellant succeeds on thi…