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2016 (3) TMI 1440 - ITAT DELHICorrect method of accounting - Addition on account of recognizing the income by applying the percentage of completion method as per Accounting Standard-7 issued by ICAI - HELD THAT:- We note that assessee was following project completion method from the beginning for calculating its income from the projects and the department was accepting the same throughout, however, this year only the AO has not accepted this method without spelling out how this method distorts the projects. Admittedly, the assessee is not a contractor so revised AS-7 need not be followed by the assessee who is Real Estate Developer. As the construction is completed up to 53.95%, therefore, the project was not complete and real profits cannot be estimated from the same. The ld. CIT (A) has rightly held that the AO has not pointed out any discrepancy that method followed regularly by the assessee was distorting or under estimating the profits and since no such facts and figures have been brought on record by the AO, therefore, the method regularly followed by the assessee cannot be interfered with. Therefore, the percentage completion method applied by the AO cannot be applied in the case of the assessee. Therefore, in view of the above, we do not find any infirmity in the order of the CIT (A) and accordingly, we uphold the same. - Decided against revenue.
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