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“retention money”

ICDS & AccountingICDS IIIICDS III115 judgments

The decision most relied on for retention money is CIT v. Simplex Concrete Piles (India) P. Ltd. (179 ITR 8), cited in 36 judgments on BharatTax.

Leading authorities on retention money

CIT v. Simplex Concrete Piles (India) P. Ltd.
179 ITR 8 · 1989 · High Court
36
citing judgments

Retention money does not accrue to an assessee until the defect liability period is over and it is certified that no liability is attached to the assessee, at which point the assessee acquires the right to receive such money.

296 (Mumbai-Trib). PNC Construction Co Ltd. v. DCIT
92 Taxmann.com 106 · 2018 · Reported
28
citing judgments

Where an assessee enters into a development contract where it undertakes all acts from project design to handing over, it is considered to be developing a facility as a whole, not performing a specific work. This implies the ownership of the site is not transferred.

CIT v. Associated Cables P. Ltd.
286 ITR 596 · 2006 · High Court
25
citing judgments

Retention money withheld by a contractee is not taxable in the year it is retained, but only in the year the obligations under the contract are fulfilled and the amount becomes due to the assessee.

CIT v. Ignifluid Boilers (I) Ltd.
283 ITR 295 · 2006 · High Court
19
citing judgments

Retention money is considered deferred payment and is not taxable in the year it is retained if it is contingent upon the satisfactory completion of the contract work and the assessee has no vested right to receive it.

292 ITR 399, 252 ITR 802, CIT v. East Coast Constructions and Industries Limited
283 ITR 297 · 2006 · High Court
13
citing judgments

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.

Judgments citing retention money

Assistant Commissioner of Income Tax Corporate Circle 1 1, Chennai vs. Il and Fs Tamilnadu Power Company Limited, Chennai

ITA 1694/CHNY/2024[2018-19]Status: DisposedITAT Chennai25 Apr 2025AY 2018-19

Bench: Hon’Ble Shri Manu Kumar Giri & Hon'Ble Shri Amitabh Shuklaआयकर अपील सं./Ita No.1332/Chny/2024, Assessment Years: 2018-19 आयकर अपील सं./Ita No.1694/Chny/2024, Assessment Years: 2018-19 Il & Fs Tamil Nadu Power Company Limited, Deputy Commissioner Of Income Tax, Old No.21, New No.2, Kpr Tower, 4Th Floor, Greams Road, S.O, Nungambakkam Chennai-600 006. [Pan: Aabcf1176A] Corporate Circle-1(1), Chennai आयकर अपील सं./Ita No.1694/Chny/2024, Assessment Years: 2018-19 Deputy Commissioner Of Income Tax, Corporate Circle-1(1), Chennai Il & Fs Tamil Nadu Power Company Limited, Old No.21, New No.2, Kpr Tower, 4Th Floor, Greams Road, S.O, Nungambakkam Chennai-600 006. [Pan: Aabcf1176A] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee By : Shri.Ashwin, Ca प्रत्यर्थी की ओर से /Revenue By : Shri Shivanand K Kalakeri, Cit सुनवाई की तारीख/Date Of Hearing : 26.03.2025 घोषणा की तारीख /Date Of Pronouncement : 25.04.2025 आदेश / Order Per Amitabh Shukla, A.M : The Below Mentioned Appeals Have Been Filed By The Appellant Assessee & Revenue For Ay-2018-19 Contesting The Order Of Ld. First Appellate Authority Indicated In Column-E, Herein Below:- S. No. A Appeal Nos. B Ays C Appellant D Cit(A) Order Details E Respondent F 1

For Appellant: Shri.Ashwin, CAFor Respondent: Shri Shivanand K Kalakeri, CIT

आयकर अपीलीय अधिकरण, 'ए' न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH: CHENNAI माननीय श्री मनु कुमार गिरि

Il&Fs Tamilnadu Power Company Ltd, Chennai vs. DCIT Corp Circle 1(1), Chennai

In the result, the appeal of the revenue is partly allowed for statistical purposes

ITA 1332/CHNY/2024[2018-19]Status: DisposedITAT Chennai25 Apr 2025AY 2018-19

Bench: Hon’Ble Shri Manu Kumar Giri & Hon’Ble Shri Amitabh Shuklaआयकर अपील सं./Ita No.1332/Chny/2024, Assessment Years: 2018-19 आयकर अपील सं./Ita No.1694/Chny/2024, Assessment Years: 2018-19 Il & Fs Tamil Nadu Power Company Deputy Commissioner Of Income Limited, Tax, Old No.21, New No.2, Kpr Tower, Corporate Circle-1(1), 4Th Floor, Greams Road, Chennai S.O, Nungambakkam Chennai-600 006. [Pan: Aabcf1176A] आयकर अपील सं./Ita No.1694/Chny/2024, Assessment Years: 2018-19 Deputy Commissioner Of Income Il & Fs Tamil Nadu Power Company Tax, Limited, Corporate Circle-1(1), Old No.21, New No.2, Kpr Tower, Chennai 4Th Floor, Greams Road, S.O, Nungambakkam Chennai-600 006. [Pan: Aabcf1176A] (प्रत्यर्थी/Respondent) (अपीलार्थी/Appellant) अपीलार्थी की ओर से/ Assessee By : Shri.Ashwin, Ca प्रत्यर्थी की ओर से /Revenue By : Shri Shivanand K Kalakeri, Cit सुनवाई की तारीख/Date Of Hearing : 26.03.2025 घोषणा की तारीख /Date Of Pronouncement : 25.04.2025 आदेश / O R D E R Per Amitabh Shukla, A.M :

For Appellant: Shri.Ashwin, CAFor Respondent: Shri Shivanand K Kalakeri, CIT

liability, or any gain made by the company on revision in terms of the contract. The appellant is still liable to pay the entire retention money. It was argued that the net gain on derecognition credited to P&L a/c is notional in nature and hence, not taxable