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2009 (9) TMI 627 - AT - Income TaxMethod of accounting - Percentage completion method Vs. completed contract method - The assessee is following consistently a method of accounting to declare the profit on project completion method as the assessee can account for the receipt as and when the registration takes place - When the assessee company is required to follow the Accounting Standard as prescribed by ICAI, then naturally it has to take into account the replies given by the Institute for the expert committee on the queries raised by the companies - The appellant undertakes construction activity for those persons to whom it intends to sell the super-built area along with undivided share of land in a project which it is developing as a developer - the assessee has changed the method of accounting from project completion method to percentage completion method in the subsequent year - it is held that in case the revised AS-7 is to be applied then the opening inventories are also to be valued as per revised AS-7 though we are holding that revised AS-7 is not applicable in the case of the assessee - When the guidance note provided that revised AS-7 is applicable to real estate developers, the assessee has itself changed the method of accounting - Appeal is allowed by way of direction to AO to adopt project completion method Regarding business income or house property - As per the lease agreement, the assessee agreed to create a lease in favour of the tenant in respect of the premises, which is part of the building known as 'The Forum - The person concerned taking the property cannot use for any business except for the specified business - the assessee company is not only managing the property but is also providing common services and common area - assessee is getting composite lease rent payable for all the services under Group-I, Under Group-I, there are nine types of services - held that the rent relating to the building is to be taxed under the head 'Income from house property - In the result, the appeal is partly allowed
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