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2024 (2) TMI 925 - AT - Income TaxRevision u/s 263 - CIT said AO in the assessment order has not mentioned whether the assessee was following percentage completion method or project completion method for recognising the revenue - PCIT held AO had failed to examine method of revenue recognition interest on loan and nature of expenses as capital in nature therefore held that order passed u/s 143(3) of the Act on 02.03.2021 was erroneous insofar as it was prejudicial to the interest of revenue. HELD THAT:- As assessee has filed the relevant copies of audit report and information pertaining to revenue recognition demonstrating that assessee has followed the percentage completion method and not the project completion method as mentioned by the ld. Pr.CIT in her order passed u/s 263 of the Act. In relation to the above the assessing officer has also called the various details like project wise value of work-in-progress and finished stock, detail of cost incurred and adjusted against sales reported project wise, party wise sale, receipts of each project and project wise gross profit etc. As undisputed fact that it has also been brought to the notice of ld. Pr.CIT that it has already been verified in the assessment order passed u/s 143(3) for assessment year 2012-13 to 2015-16, 2017-18 and 2018-19 that assessee has constantly followed the percentage completion method. As evident from the various information obtained by the assessing officer during the course of assessment proceedings that AO has verified and considered the various detail in respect of the method adopted by the assessee for recognizing the revenue. CIT has not disproved the material placed on record by the assessee in support of their claim that they have followed percentage completion method and not project completion method. In respect of claim of TDR expenses as undisputed fact that assessee was engaged in the business of construction and development of building. The assessee has explained that TDR was a right of construction in form of FSI relating to land and building which was part of stock in trade in the business carried out by the assessee, therefore, we consider that treating TDR in the nature of capital expenditure was not justified. CIT has not substantiated that how the assessment order passed by the assessing officer is erroneous as well as prejudicial to the interest of revenue. Therefore, ground of the appeal of the assessee are allowed. Pr.CIT jurisdiction to pass order u/s 263 over order passed by the faceless assessment u/s 144B - HELD THAT:- Once the record are transferred to the jurisdictional assessing officer on completion of assessment the jurisdictional PCIT assume jurisdiction therefore can exercise power u/s 263 of the Act over the order passed by the faceless assessment unit. Therefore, we don’t find any merit in the ground no. 3 of the appeal of the assessee and the same stand dismissed.
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