TMI Blog2015 (3) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... ject completion method was appropriate in the circumstances of the case and the rationale for not adopting it in respect of the 22 transactions by the AO was illogical. The Court notices that in M/s. Excel Industries, [2013 (10) TMI 324 - SUPREME COURT]the Supreme Court had indicated three tests to deduce whether income accrued to the assessee is real or hypothetical i.e. if there is a corresponding liability of the other party to pass on the benefits even without the transaction; probability or improbability of realization of benefits by the assessee etc. In these circumstances, the AO’s decision was based on hypothetical income given that for the previous years AS-7 had been permitted. Furthermore, applying the decision in M/s. Excel Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed by all developers. The AO recomputed the income by treating advances against properties which had NIL outstanding balances, as sales and consequently the income of the assessee. 4. The CIT(A) held that identical practice had been followed by the assessee for the previous year, Assessment Year 2006-07 and that AO s addition had been set aside. The CIT(A) s order then noted the relevant extracts of his order for the previous year. The ITAT in the present case refused to accept the Revenue s contentions, and held as follows:- 8. We have carefully considered the submissions and perused the records. We find that it is undisputed that assessee had been following particular system of accounting for revenue recognition which has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asstt. year as well as in the subsequent asstt. year, the dispute raised by the Revenue was entirely academic or at best may have a minor tax effect . 5. Counsel for the Revenue urges that the same question in respect of Assessment Year 2006-07 has been entertained and the appeal is pending in ITA 252/2013. It is urged that consequently the present assessment year should follow the same pattern. It was urged that the AO has good reason to add the amount in respect of the 22 properties, having regard to the fact that the entire project had been completed but yet the assessee claimed otherwise. 6. Counsel for the assessee however submitted that the assessee as well as the ITAT in the present case has relied upon the decision in CIT vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee can follow either the project completion method or the percentage completion method. In view of the judgments of the Supreme Court (Supra), the finding of the CIT (A), upheld by the Tribunal, does not give rise to any substantial question of law. Further, the Tribunal has also found that there was no justification on the part of the assessing officer to adopt the percentage completion method for one year (the year under appeal) on selective basis. This will distort the computation of the true profits and gains of the business. For these reasons, we are of the view that no substantial question of law arises. We, therefore, decline to admit question Nos. 2 and 3 . 9. The above ruling clearly establishes that the project comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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