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2017 (5) TMI 730 - ITAT MUMBAIMethod of accounting - development agreement - Adhoc addition of 3% of work in progress - assessee is regularly following project completion method of accounting for computation of its income - Held that:- AO tried to invoke AS-7 of the accounting standard which is applicable to the contracts entered into during accounting period commencing on or after 01-04-2003. In the present case, the contract was entered in 1993 by way of development agreement and the assessee has returned the working progress from AY 1999-2000 and department has accepted consistently. In view of these facts, we direct the AO to compute the income on the basis of completed project method and not on percentage completion method of accounting. The appeal of the assessee is allowed.
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