TMI Blog2014 (1) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of properties for which the addition has been made in this year, the sales has been recognised in the subsequent years - Following CIT vs. Excel Industries [2013 (10) TMI 324 - SUPREME COURT] - When in earlier asstt. years the revenue accepted the order of the tribunal in favour of the assessee, then Revenue cannot be allowed to flip flop on the issue and it ought let the matter rest rather than spend the tax payers money in pursuing litigation for the sake of it - In the subsequent accounting year, assessee has disclosed the income and paid tax thereon and if the rate of tax remained the same in the present asstt. year as well as in the subsequent asstt. year, the dispute raised by the Revenue was entirely academic or at best may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 34,20,797/- as deemed sale in respect of 22 specific properties. 3.1 The impugned addition was made by the Assessing Officer because according to him as per the method of revenue recognition as per Accounting Standard-7 of the Institute of Chartered Accountant percentage completion method has to be mandatorily followed by all developers. The Assessing Officer, therefore, recomputed income by treating advances against properties which according to him had NIL outstanding balances, as sales and consequently the income of the assessee. As mentioned earlier, the addition relates to 22 specific properties showing NIL balances in respect of which the entire sale consideration aggregating to Rs. 2,66,75,492/- was received. The Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue from services is recognized in accounts on accrual basis except where the ultimate collection is considered uncertain and is shown net for selling, administrative and other expenses. Schedule 20 filed with the Balance Sheet for the year ending 31.03.2005 says as follows:- "3. Revenue recognition i) Sale of land, plots and other constructed properties are recognized in the financial year in which the transfer is made by registration of sale deeds in favour of the customers. ii) During the year, the company changed the policy for recognition of revenue from sale of personal floors and value floors from conveyancing to the time of possession. Pursuant to the Haryana Government declining the registration of sale deeds of such prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ultimate collection is considered uncertain and is shown net from selling, administrative and other expenses. The above clearly shows that the appellant has been consistently following a particular system of accounting and hence there is no cause for the AO to deviate from the earlier stand taken by the Department on the issue at hand. Assessment orders for the assessment years 2004-05 and 2005-06 have also been perused where there is no mention about any sort of addition like this. In fact, the A 0 has clearly mentioned in both the years that "the method of accounting being followed by the assessee company is the same as in earlier years." If the appellant has offered the income in later years on the basis of particular system of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. This ground of appeal is accordingly taken as allowed to the appellant." 5, Considering the above, Ld. CIT(A) held that assessee has been following particular system of accounting for revenue recognition which has been duly mentioned by it in the Accounting Policies filed alongwith the return of income for the year under consideration as well as for the earlier years. Ld. CIT(A) noted that it is a matter of record that in respect of most of the properties for which addition has been made in this year, sales have been recognized in subsequent years. He further observed that the facts in this year are similar to the facts in the earlier years including the asstt. year 2006-07 wherein similar addition made by the Assessing Officer was de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en recognised in the subsequent years. Moreover, in the preceding assessment year Ld. CIT(A) has deleted the similar addition. The deletion by the Ld. CIT(A) was affirmed by the Tribunal in ITA No. 4085/Del/2009 vide order dated 20.4.2012. 9. In this regard, we refer to the decision of the Hon'ble Apex Court in the case of CIT vs. Excel Industries in Civil Appeal No. 125 of 2013 vide order dated 8.10.2013. In this case the Hon'ble Apex Court has inter-alia held that when in earlier asstt. years the revenue accepted the order of the tribunal in favour of the assessee, then Revenue cannot be allowed to flip flop on the issue and it ought let the matter rest rather than spend the tax payers money in pursuing litigation for the sake of it. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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