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2020 (7) TMI 157 - AT - Income TaxRevenue recognition of the work completed to the returned income - return was selected for scrutiny assessment under CASS - HELD THAT:- The assessee has recognized the revenue in Assessment Year 2015-16 onwards when the completion exceeded 30%. The reasons for the reduction in the estimated cost of project from ₹ 362 crores as on 31.03.2014 to ₹ 349.53 crores as on 31.03.2016 has been well explained at para 37 of the AS 7 which is mentioned elsewhere and the reason for reduction in the estimated cost so far as the case in hand is concerned is due to selling cost which was earlier taken at ₹ 25 crores which was reduced rs. 12.35 crores. It is pertinent to note that the assessment order for Assessment Year 2014-15 was filed on 29.09.2015. This means that the Assessing Officer was well aware of the revenue recognition in Assessment Year 2015-16 and, therefore, grossly erred in making additions in Assessment Year 2014-15 for income which has been duly recognized in subsequent assessment year. As relying on M/S EXCEL INDUSTRIES LTD. AND MAFATLAL INDUSTRIES P. LTD. [2013 (10) TMI 324 - SUPREME COURT] Assessing Officer / CIT (Appeals) were not justified in substituting the cost as on 31.03.2014 with the cost on 31.03.2016. The addition made by the Assessing Officer is not justified on the facts of the case. We accordingly direct the Assessing Officer to delete the addition - Decided in favour of assessee.
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