9911796707
TMI Blog2015 (10) TMI 2059X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the revenue, issues involved therein are identical. For brevity, the facts are being extracted from ITA No. 206 of 2015. 3. This appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 6.6.2014 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 561/Chd/2013 for the assessment year 2009- 10, claiming the following substantial questions of law:- a) Whether the ITAT has erred in law in deleting addition of Rs. 12,34,000/- and directing to follow recognized method of accounting to compute the profits in the Real Estate business when the guidance no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the assessment year 2010-11 was allowed. Being dissatisfied, the revenue filed appeals before the Tribunal. The Tribunal vide order dated 6.6.2014 (Annexure A-3) dismissed the appeals of the revenue. Hence, the present appeals by the revenue. 4. Learned counsel for the revenue submitted that each year is a separate year and the assessee is liable to pay tax on the percentage completion method and not on the basis of project completion method. According to the learned counsel, it would not be proper to accept the project completion method for the year under consideration as the same would distort the income accrued to the assessee in the current year and the assessee by adopting such method can indefinitely defer its tax liability. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee for chit discount consistently over the years, is not required to be substituted by percentage completion method. In CIT (v) Manish Buildwell (P) Ltd. (2011) 245 CTR 397 (Del), it was enunciated that project completion method is one of the recognized methods of accounting. That it cannot be said that the project completion method followed by the assessee would result in deferment of payment of taxes. Therefore, considering the discussion above, I do not find any merit on the part of the AO to have worked out the income by applying the percentage completion method." 7. The Tribunal affirmed the order of the CIT(A). It was concluded that project completion method and percentage completion method are accepted standards of accounting and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... latable to the revenue generated from year to year. 49. The Hon'ble Supreme Court in CIT Vs. Bilahari Investment (P) Ltd. (supra) had held that, "recognition/identification of income under the 1961 Act is attainable by several methods of accounting. It may be noted that the same result could be attained by any one of the accounting methods. Completed contract method is one such method." It was further held that "Every assessee is entitled to arrange its affairs and follow the method of accounting which the Department has earlier accepted. It is only in those cases where the department records a finding that the method adopted by the assessee results in distortion of profits, the Department can insist on substitution of the existing me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and follow any recognized method of accounting to compute its profits. In view thereof, we find no merit in the order of the Assessing Officer in re-computing the income in the hands of the assessee. Upholding the order of Commissioner of Income Tax (Appeals), we dismiss ground of appeal raised by the revenue." 8. The Delhi High Court in Commissioner of Income Tax v. Manish Build Well (P) Ltd. (2011) 245 CTR 397 noted that project completion method is one of the recognized methods of accounting. It was held as under:- "It is well settled that the project completion method is one of the recognized methods of accounting. It cannot be said that the project completion method followed by the assessee would result in deferment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
