(-1-) MGN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.707 OF 2008 The Commissioner of Income Tax ...Appellant Vs. KEC Infrastructures Ltd. ...Respondents Mr. Suresh Kumar for the appellant. None for the Respondent. CORAM: F.I. CORAM: F.I. CORAM: F.I. REBELLO REBELLO REBELLO & J.H. BHATIA, JJ. J.H. BHATIA, JJ. J.H. BHATIA, JJ. DATED: 13th April, 2009 DATED: 13th April, 2009 DATED: 13th April, 2009 P.C.: P.C.: P.C.: . The Revenue is in appeal on the following questions:- "4.1. Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is justified in law in confirming the order of CIT (A) allowing the assessee to account escalation bills on the basis of receipts in accordance with cash system of accounting whereas on the same contract the assessee has accounted the regular bills by following mercantile system of accounting. "4.2. Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is justified in law in allowing the (-2-) assessee’s claim to account the escalation bills on the basis of receipts in accordance with cash system of accounting even when it is open for the assessee to claim bad debts for such income, in case it is not received. Both the C.I.T. (A) and ITAT have noted that the transaction involved here in respect of which there was a war situation between Iran and Iraq. It is in the context of that war like situation that both the CIT (A) and ITAT deleted the additions on account of escalation bills and retention money. In so far as the questions before us are concerned, it is only the revenue which is in appeal only in respect of escalation. Considering that there are two findings of fact recorded by CIT (A) and ITAT in our opinion these are purely findings of fact.The question of law framed would not arise. Consequently Appeal dismissed. (J.H. BHATIA, J.) (F.I.REBELLO, J.) (J.H. BHATIA, J.) (F.I.REBELLO, J.) (J.H. BHATIA, J.) (F.I.REBELLO, J.)