Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 440 - AT - Income TaxDeferment of the payment of the taxes - project completion method application on the assessee - method of accounting - Accounting standards - Held that:- Referring to amendment brought in statute with retrospective effect w.e.f. 1.4.2017 by way of insertion of Section 43CB for the purpose of computation of income from construction and service contract it is crystal clear that before the insertion of this section there was no legal obligation on the part of the assessee to follow percentage completion method only. Before insertion of this section person engaged in construction and service contracts were free to follow either the project completion/ Completed project method or percentage completion method in accordance with the provisions of Section 145 of the Act. In the instant appeal assessee even though not directly involved in the construction activity and it is merely gave its land for development and it was agreed between the assessee company and the developer that 32% of the saleable area shall be given to the assessee. The 54 assessee is consistently followed completed project contract/percentage completion method as recognized its revenue at the time of execution of getting the sale deed registered and before that it has to be consistently showing the advance from sale of flats as the liability in the balance sheet. A.O was not justified in applying the percentage completion method on the assessee merely on the basis that it was followed by the developer JSM DPL and arbitrarily making addition to the income ignored the fact that project completion method/ completed contract method of accounting has been consistently adopted by the assessee and even have been accepted by the revenue authority for the A.Y. 2010-11 and A.Y. 2011-12. We therefore set aside the findings of Ld.CIT(A) and delete the addition of ₹ 16,12,34,754/- for Assessment Year 2012-13. - Decided in favour of assessee
|