TMI Blog2016 (8) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... is appeal is identical to the decision cited by the learned Counsel for the assessee while adopting such reasons, we allow this appeal and accordingly answer the issue raised in this appeal in favour of the assessee - TAX APPEAL NO. 828 of 2007 - - - Dated:- 12-8-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR MANISH J SHAH, ADVOCATE FOR THE OPPONENT : MR KM PARIKH, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) By way of this appeal, the assessee has challenged the order dated 12/01/2007 passed by the tribunal in ITA No.3520/Ahd/2003 for the assessment year 2001-02 whereby the appeal of the assessee came to be dismissed confirming the order passed by the CIT (A). 2. Whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing paragraphs: 3. On the revenue's appeal, the Tribunal confirmed the view of CIT (Appeals), however, on slightly different ground, namely, that the assessee being a developer of the project, profit in his case, will arise on transfer of title of the property and receipt of any advances or booking amount cannot be treated as trading receipt of the year under consideration. The Tribunal further noted that such method of accounting followed by the assessee had been accepted by the revenue in earlier years. The Tribunal was, therefore, of the opinion that the Assessing Officer's decision to reject the book results during the year under consideration was not justified. 4. We are of the opinion that the Tribunal committed no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be of the view that the accounts are correct and complete but the method employed is such that the income cannot be property deduced therefrom. The choice of method of accounting regularly employed by the assessee lies with the assessee but the assessee would be required to show that he has followed the chosen method regularly. The department is bound by the assessee's choice of method regularly employed unless by this method, the true income, profit or gain cannot be arrived at. The assessee's regular method would not be rejected as improper merely because it gives the assessee the benefit in certain years or that as per the Assessing Officer, the other method would have been more preferable. If the method adopted does not afford ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our adjudication is that the income in the instant case is to be computed as per system of accounting followed by the assessee or as per accounting followed by the assessee or as per accounting standard AS7 for the purpose of charging of income tax. We find that the issue is to be decided in accordance with the provisions of section 145 of the Act shows that the business income which is assessable under the Income Tax Act is to be computed in accordance with the consistent system of accounting followed by the assessee unless such system, of accounting is defective and / or from such system of accounting, profit cannot be deduced. Thus, in our considered opinion, the option for choosing the system of account is wit the assessee and not with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the finality as the said decision is not challenged by the department before Higher Forum. In view of the above and more particularly, when it has been found that the assessee is consistently following accounting system of percentage completion method, which is permissible and accepted by ICAI and CBDT with respect to construction work, it cannot be said that the learned Appellate Tribunal has committed any error and / or illegality, which call for the interference of this Court. We see no reason to see to interfere with the impugned judgment and order passed by the learned Tribunal. We are in complete agreement with the view taken by the learned ITAT as well as learned CIT (A) deleting the addition of ₹ 1,66,70,811/- which was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances and totality of facts, it is clear that the profit shown in books of accounts is not correct and completed, therefore, I have no alternative but to invoke the provisions of Section 145 (3) of the Act to reject the book result of the assessee and determine the income at 10% of total gross receipts allowance. It is mentioned here that in preceding year, the construction work carried out was very nominal, the advances received in earlier year are considered for revenue recognition in current year. The assessee company has collected ₹ 1,10,86,447/- till end of the year under consideration from numbers including the sale of Share in land with construction upto plinth level, therefore net profit is worked out at ₹ 11,08,645/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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