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2022 (11) TMI 70 - AT - Income TaxAddition on account of income from project under PCM method - whether income of the assessee is taxable in the impugned year or in the subsequent year? - HELD THAT:- DR was unable to point any infirmity in the findings of the CIT(A) that as per the guidance note issued by the ICAI for accounting of construction contracts the cost of land was to be excluded for calculating the Construction and Development cost of the project, nor was he able to controvert the factual findings of the CIT(A) that after excluding this cost of land the CDC completed by the assessee during the year was below the prescribed 25% of the Estimated cost of the project. Since the basis of the AO for recognizing Revenue from construction contracts of the assessee during the impugned year was the CDC as per his calculation exceeding the prescribed limit of 25% of the estimated cost of project, which the CIT(A) has found to be factually incorrect and the Revenue has been unable to controvert the factual finding of the CIT(A) before us, we see no reason to interfere in the order of the CIT(A) upholding the claim of the assessee that no revenue was to be recognized in the impugned year from the construction projects undertaken by it. Ground no.1 raised by the Revenue is accordingly dismissed. Disallowance u/s.36(1)(iii) - HELD THAT:- Since we have held in ground no.1 above that no income is assessable in the impugned year, there arises no question of claim of any expense whatsoever by the assessee and therefore the addition made on account of disallowance of interest is not tenable. Ground no.2 is therefore become infructous, and is thus dismissed.
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