TMI Blog2013 (2) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... ding which was recorded by the CIT (Appeals). The submission made by revenue that this finding was confirmed by ITAT cannot be accepted. CIT(A) has rightly observed that since there was no sale of flats in the earlier assessment year, the appellant could have shown the said expenditure which was incurred, as loss and could have carried forward the loss in the next year. Secondly, it is admitted position that in the subsequent years, the appellant has been following AS-7 accounting system and the same was accepted by the AO. In fact thereafter, the Central Government has directed all the developers and builders to follow AS-7 accounting system. Taking into consideration the aforesaid facts, therefore, the ITAT has clearly erred in setting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant could be correctly computed and which was regularly followed by the appellant in subsequent years ? (ii) Whether on the facts and in the circumstances of the case, the decision of the Hon'ble Supreme Court in the case of CIT Vs. British Paints India Ltd. ought to have been brought to the notice of Counsel appearing on behalf of the appellant by the Hon'ble Tribunal before placing reliance on the same as mandated by the Hon'ble Supreme Court in Sandvik Asia Ltd. Vs. CIT (281 ITR page 643)? 3. Brief facts are as under : The appellant is a Company engaged in business of constructing residential and commercial buildings and sale of the flats and commercial shops and also business of Real Estate Development. The relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return declaring total income of Rs.2,550/-. DCIT, Circle 2, Margao by its assessment order dated 13/10/1998 assessed the total income at Rs.39,82,980/- and while doing so, the Assessment Officer made addition of sum of Rs.17,88,824/- since according to the Assessment Officer, the appellant had undervalued its profits by changing method of valuation of work in progress. 5. Being aggrieved by the said order, the appellant filed an appeal before the Commissioner of Income Tax (Appeals), Belgaum. The Commissioner of Income Tax (Appeals) allowed the appeal of the appellant and upheld the claim of the appellant in respect of the valuation of work in progress. The Commissioner of Income Tax (Appeals) also held that the change in Accounting Sys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Hela Holdings Pvt. Ltd Vs. Commissioner of Income Tax and another reported in 2003 Vol. 263 ITR 129 wherein the Calcutta High Court had after referring to the provisions of Section 145 had held that the change of method of accounting was permissible and it was open for the assessee to produce the records and show that it has followed the said accounting system in subsequent years. It is submitted that the case on which reliance is placed by ITAT namely British Paints India Ltd (supra) is not correct and distinguishable from the present case. He submitted that in the said case trading costs were not included in the costs incurred in the manufacturing of paints and, therefore, the Court had rightly held that change of method of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the order passed by the Assessment Officer was confirmed. She invited our attention to the judgment of Calcutta High Court in the case of K. K. Jalan (HUF) V. Commissioner of Income-tax reported in (1993)71 TAXMAN 248 (CALCUTTA) in which it was held that findings of fact not being assailed as perverse, the want of bona fides being proved fact, the order passed by the ITAT on the basis of finding of fact could not be set aside. 10. On the other hand, learned Counsel appearing for the appellant submitted that the judgment in the case of Hela Holdings Pvt Ltd. (supra) is subsequent judgment wherein it was held that it is permissible to change the method of valuation and change accounting system. He also invited our attention to clause (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents that this finding was confirmed by ITAT cannot be accepted. Learned Commissioner of Income Tax has rightly observed that since there was no sale of flats in the earlier assessment year, the appellant could have shown the said expenditure which was incurred, as loss and could have carried forward the loss in the next year. Secondly, it is admitted position that in the subsequent years, the appellant has been following AS-7 accounting system and the same was accepted by the Assessment Officer. In fact thereafter, the Central Government has directed all the developers and builders to follow AS-7 accounting system. Taking into consideration the aforesaid facts, therefore, the ITAT has clearly erred in setting aside the order passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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