TMI Blog2017 (8) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... e do not find any reason to disturb the order of the Commissioner of Income-tax. Accordingly, we confirm the addition made by the Assessing Officer at the rate of 8 per cent. on the gross receipts. - Decided against assessee. Estimation of income on accumulated gross receipts in the assessment year under consideration - Held that:- In the earlier years, the assessee has not admitted any income and filed "nil" return of income as discussed earlier. No books of accounts were produced before the Assessing Officer to estimate that the Revenue and expenditure was accounted correctly. Therefore, till the date of filing the return, the assessee has admitted 'nil' income and the earlier receipts were not offered to income. The assessee has not produced the books of account before the Assessing Officer and the relevant evidence in respect of expenditure incurred till date. In the absence of books of account, the correctness of the expenditure could not be established. Therefore, only option available to the Assessing Officer to estimate the income on the gross receipts received up to accounting year 2009.- Decided against assessee. - I. T. A. Nos. 509 and 510/Mds/2016 - - - Dated:- 12-4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the accounting standard referred to should be tested with the reference to the facts of the case and ought to have appreciated that having not recorded any positive/express finding on its applicability, the reference to such standards would fall on the grounds. 7. The Commissioner of Income-tax (Appeals) failed to appreciate that the method of accounting as well as reckoning of revenue under the project completion method should be considered as acceptable and ought to have appreciated that the change of course for the purpose of making addition on estimated basis was erroneous and wholly unjustified. 8. The Commissioner of Income-tax (Appeals) went wrong in recording the findings in this regard in paragraphs 8 to 23 of the impugned order without assigning proper reasons and justified. 9. The Commissioner of Income-tax (Appeals) failed to appreciate that the decisions relied upon were applied out of the context and not applicable to the factual matrix of the case thereby vitiating the decision to sustain the wrong assessment framed by the original authority and ought to have appreciated that the entire computation of assessable income was wrong, erroneous, unju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009-10, 77 per cent. of the construction was completed and received the 75 per cent. of the project income. According to the Assessing Officer, in case, the assessee is following Accounting Standard 7 having completed 77 per cent. of the projects, the assessee should have estimated the income on percentage completion basis and admitted the resultant income. If the assessee is following Accounting Standard 9, the assessee would have admitted the value of flats sold as income. In the assessee's case, though the assessee claimed to be following the project completion method, the books of account and the supporting evidences were not produced to establish the correctness of expenditure. The information furnished before the Assessing Officer do not throw clear picture regarding the method of accounting followed by the assessee in the absence of books of account. Therefore, the Assessing Officer rejected the books of account and estimated the income at the rate of 8 per cent. on the gross receipts received by the assessee till the end of the year 2010, which worked out ₹ 1,59,00969 on gross receipts of ₹ 19,87,62,122 for the assessment year 2010-11 and for the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed to have followed the project completion method, it is obligatory on the part of the assessee to maintain the regular books of account and support the contention with the books of account, bills and vouchers, that it is following project completion method and true and correct financial position can be drawn with the books of account. The expenditure debited to the work-in-progress/advances received required to be accounted correctly to show that no inflation of expenditure and no suppression of income was made by the assessee. The assessee has not produced the books of account, bills and vouchers. In the absence of the books of account, bills and vouchers the contention of the assessee that it is following project completion method is without any basis. Further, the assessee has not furnished any evidence to show that in the subsequent years the project was completed and the returns are filed. It revealed from the assessment order that the assessee filed returns regularly admitting 'nil' income from the assessment years 2007-08 to 2010-11. It is clear from the facts gathered from the assessment order and the Commissioner of Income-tax that, the assessee is not followin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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