Section 43CB of the Income Tax Act
Income-tax Act, 2025: s.57
Section 43CB of the Income-tax Act, 1961 corresponds to section 57 (Revenue recognition for construction and service contracts) of the Income-tax Act, 2025.
Read section 57 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 43CB is CIT v. Simplex Concrete Piles (India) P. Ltd. (179 ITR 8), cited in 36 of the 39 judgments on BharatTax that turn on this section.
Leading authorities on Section 43CB
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.
Disallowance of interest expenditure is unwarranted when the assessee has demonstrated sufficient interest-free funds available to cover advances given to third parties, and the Assessing Officer cannot prove otherwise.
Section 68 of the Income-tax Act, 1961, does not permit additions in a subsequent assessment year for sums that were credited in earlier years and brought forward as liabilities in the balance sheet.
Income from a project is assessed in the year of project completion, not the year of receiving 'on money'. The regular method of accounting dictates the assessment year for regular income.
A definition under Section 3 of the Income Tax Act is not permissible if it is inconsistent with other provisions. The interpretation of 'any previous year' refers to the previous year relevant to the assessment year concerned.
The expression "any previous year" refers to the previous year relevant to the assessment year concerned, not all previous years. This interpretation applies even in specific contexts like the Merged States (Taxation Concessions) Order.
