Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 240 - AT - Income TaxEstimation of income at 8% on the advances received – Held that:- There was determination of total income under the normal computation before allowing deduction - Other income was brought to tax separately - It could not be understood as to how on the percentage completion method, the AO could arrive at some profits when project was not even substantially started - As seen from the advances received and amounts invested in the project, the advances received are much more as the assessee’s projects command respect in the market and customers simply paid advances once project was announced - estimation of income on advances cannot be sustained, considering the fact that assessee book results as such were accepted in later two years without resorting to estimation on advances to be consistent with first year’s method followed by the A.O. Relying upon Lingtec Constructors LP vs. ITO [2013 (5) TMI 469 - ITAT MUMBAI] - assessee having consistently followed percentage completion method as per the accounting standards and completed the project in the later years, no addition could be made on the advances received during the year – the order is modified and the AO is directed to accept book results as such - assessee has spent various amounts other than project related expenditure, the expenditure in the P & L Account gets set off as a loss from business to the ‘income from other sources’- Decided in favour of Assessee.
|