- (1.) THIS is an appeal under section 260 -A of the Income Tax Act arising from the order of the Income Tax Appellate Tribunal (which is herein after referred to as "the Tribunal") dated 23rd November 1998 relating to the assessment year 1989 -90. The following substantial questions of law have been raised: 1. Whether, on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was justified in deleting the addition of Rs. 7,14,000/ - on account of retention money without appreciating the facts inter -alia that assessee's method of accounting was admitted as Merchantile? 2. Whether, on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was legally correct in deleting the addition of Rs. 1,09,250/ - on account of expenditure in Stamp Duty treating the same as revenue expenditure ignoring the fact that the expenditure was incurred in creating a source of income? 3. Whether, on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was legally correct in upholding the deletion of disallowance of Rs. 5,03,973/ - made under section 32 AB of Income Tax Act? 4. Whether, in the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was legally correct in deleting the disallowance under section 32 AB of the Act without applying the ratio of decision of Hon'ble Supreme Court in the case of CIT vs Sri N.C. Buddhi Raja and Co, 1993 204 ITR 412 and M/s Builder Associates of India v Union of India and others, 1994 209 ITR 877?
(2.) HEARD Sri RK Upadhyaya, learned Senior Standing Counsel on behalf of the appellant and Sri Suyash Agarwal, learned counsel for the respondent.
(3.) LEARNED counsel for both the parties submitted that so far the question no. 1 is concerned, is concluded by the decision of this Court in the Income Tax Appeal No. 117 of 2003 relating to the assessment year 1991 -1992 inter party which has been followed in the case of assessee itself in Income Tax Appeal No. 191 of 2004 decided on 14.08.2007 wherein it has been held that retention money cannot be treated as the trading receipt, in as much as the amount was only for security amount retained for due performance of the contract. Following the decision of this Court, referred herein above, question no. 1 is answered against the revenue and in favour of the assessee. So far question no. 3 is concerned, the learned counsel for the respondent very fairly submitted that the issued involved is covered by the decision of Apex Court in the case of Commissioner of Income Tax v N.C. Budharaja and Co, 1993 204 ITR 412 which has been followed by the Apex Court in the case of S.A. Builders Ltd v Commissioner of Income Tax (Appeals) and another, 2007 289 ITR 26 wherein it has been held that since the assessee was engaged in the business of civil construction and was not carrying on any manufacturing activity, the deduction under section 32AB is not allowable. Respectfully following the decisions of the Apex Court in the cases of Commissioner of Income Tax v N.C. Budharaja and Co and S.A. Builders Ltd v Commissioner of Income Tax (Appeals) and another the question is answered in negative in favour of the revenue and against the assessee. The order of the Tribunal to this extent is set aside.;