S.4: Charge of income‐tax‐Income‐ Accrual‐Retention money‐Retention money in the contract is assessable only in the year of receipt that too after clearance of the defect liability.(S.5 )

The issue referred for the consideration of Third Member was whether the retention money is accrued in the year of retention or in the year of actual receipt of the retention amount from the contractee s departments after the clearance of effect liability claims .The third member held that assessee had no right to receive the money by virtue of the contract between parties and the assessee also had no right to enforce the payment and therefore the assessing officer could not include the retention money in the assessment year when actually this amount had not been paid to the assessee. The Tribunal held that the retention money in the contract is assessable only in the year of receipt , that too after clearance of the defect liability.(A.ys.2003

‐04 to 2005‐06)

ACIT v. Chandragiri Construction Co ( 2012) 147 TTJ 249/73 DTR 20(TM ) (Cochin)(Trib.).