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2016 (9) TMI 1215 - AT - Income TaxDetermination of income on ‘project completion method - Ad-hoc estimation of profits - assessment completed u/s 143 - Held that:- In the present case, assessee had demonstrated that there was no substantial completion of project in the instant assessment year, and rather the fact-situation clearly showed that on account of litigation amongst the partners the continuation of the project itself was in jeopardy. In any case, the facts brought out by the CIT(A), and which have not been negated by the Assessing Officer in his remand report to the CIT(A), clearly point out that the stage of project in the instant year could not be construed to have been substantially completed. It is also noted by the CIT(A) that the sale and booking money received upto the instant assessment year was also partly refunded to the intending buyers in the subsequent assessment year. We are also conscious of the fact that in the earlier two assessment years, where in one of the assessment years assessment was completed u/s 143(3) of the Act, the income has been assessed by following the ‘project completion method’ adopted by the assessee. There is also no repudiation to the assertions of the assessee before us that the decision of CIT(A) for Assessment Year 2007-08, rendered under similar situation, has not been appealed against by the Revenue before the Tribunal. For all the above reasons, in our considered opinion, CIT(A) made no mistake in holding that in view of the uncertainties involved, the action of the Assessing Officer in deducing the income of the assessee in the current year by making an ad-hoc estimation of profits is not justified. Apart therefrom, in our view, the Assessing Officer has not been able to demonstrate any justifiable reason for departing from his earlier accepted position of Assessment Year 2005-06 that the income is to be computed on ‘project completion method’. For all the above reasons, the order of CIT(A) deserves to be affirmed. - Decided against revenue
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