Receipt of retention money by furnishing bank guarantee not chargeable to tax as it accrues only on a successful completion of a contract

ADIT Vs. Ballast Nadam Dredging (ITAT Mumbai)- It was held that retention money withheld by the contractee pending completion of contract work does not accrue to the assessee/ contractor in the year in which the amount is retained. We also observe that similar issue was also considered by ITAT in the case of Spirax Marshall Ltd (supra) wherein it was held that receipt of retention money against furnishing bank guarantee cannot partake character of income since it cannot be apportioned until guarantee period was over. The retention money may be received by the assessee; it cannot be apportioned...