Retention Money Expenses allowed as per Mercantile Accounting System

Urmila Rcp Projects Pvt. Ltd. Vs. DCIT (ITAT Ranchi) The issue under consideration is whether the expenses incurred against the retention money or unrealised income is allowed under mercantile system of accounting? ITAT states that, the approach adopted by the Revenue while disturbing the income declared by the assessee. The assessee herein seeks to record the income when it comes into existence in the relevant previous year. The real test for taxability of income is that if the amount is to be taxable as income, the basic conception to be kept in view is that the ‘right to receive’ the in...