TMI Blog2017 (4) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent-assessee is actually not a Real Estate Developer but a Contractor. In the case at hand, there is no finding or even an averment that the system of accounting followed by the assessee is unable to show the true and correct profits or that it results in distortion of the profits. At the same time, we do not find any statutory provision or a Rule, which may compel the respondent-assessee to follow the AS-7 system of accounting alone. In view of the above, as the respondent-assessee is a Real Estate Developer and not a Contractor simplicitor, the system of accounting followed by it for the last many years is in accordance with recognized procedure, the Department cannot reject the said system followed by it for the reason that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Praveen Kumar has argued that no doubt the respondent-assessee is a Real Estate Developer but as soon as it entered into an agreement with the prospective purchaser for sale, its status was converted into that of a Contractor and it no longer remained to be a Real Estate Developer. Therefore, he was supposed to follow the percentage completion system i.e. AS-7 for accounting and as such, the Tribunal has went wrong in passing the impugned order. There is no dispute that the nature of business of the respondent-assessee from the inception is same and that it had been filing its returns as a Real Estate Developer since 2003 by adopting AS-9 system of accounting, which were all through accepted by the Department without any reservati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -9 followed by the respondent-assessee is also a recognized method of accounting, prescribed by the Institute of Charted Accountants of India and the revised AS-7 is applicable in the case of Contractor. A Division Bench of this Court in Commissioner of Income Tax Vs. Kishore Bandhu (P.) Ltd., 2008 (11) MTC 22 (Allahabad) relying upon a decision of the Madras High Court in Commissioner of Income Tax Vs. S.I. Property Development Limited, (2002) 256 ITR 601 opined that where the assessee had adopted and followed one of the recognized methods of accounting consistently and the Department had accepted it in the earlier years, it would not be fair to compel the assessee to change the method in the current year or to draw any adverse interfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounting followed by it for the last many years is in accordance with recognized procedure, the Department cannot reject the said system followed by it for the reason that it ought to have followed the other recognized system AS-7 system i.e. percentage completion system. The Act or the Rules nowhere mandates for following a particular accounting system by the respondent-assessee, therefore, if any of the recognized mode of accounting has been followed, we find that no illegality has been committed by the respondent-assessee. In view of the aforesaid facts and circumstances as well as findings as returned by the Income Tax Appellate Tribunal, there is hardly any question of law, which arises for our consideration. This appeal lack ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
