TMI Blog2018 (12) TMI 1263X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was given credit of impugned amount and due TDS was also deducted against the same. The transactions were duly reflected in Form 26AS. The assessee while claiming the credit of TDS, justified its stand of not offering the same to tax on the premise that there was uncertainty as to collection of the revenue which was in sharp contrast to the fact that expenditure against the projects were being claimed by the assessee in profit & loss account. Under the given circumstances, we set aside the findings of first appellate authority and remit the matter back to the file of Ld. AO for re-adjudication - Decided in favour of revenue for statistical purposes - I.T.A. No.6109/Mum/2016 - - - Dated:- 20-12-2018 - SHRI C.N. PRASAD, JM AND SHRI MA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed with Form No.35 before Ld. CIT(A) and also various submissions made by the assessee during the assessment proceedings. ( ii) Assessee is in the business of construction contract and as per the accounting principles, Accounting Standard 7 is most appropriate for recognition of revenue by the assessee. ( iii) Assessee made the claim of following AS-9 for the first time through addendum to grounds of appeal before Ld. CIT(A) and such a claim was never made by the assessee before A.O. Therefore, AO should have been given opportunity to respond by way of calling a remand report, which was never done leading to contravention to rule 46A of I.T. Rules and natural justice. 3. Whether on the facts and in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee stopped work at projects of HDIL . Therefore, no revenue receipts were reflected by the assessee during impugned AY. However, the expenses continued on ongoing basis which were claimed by way of debit to Profit Loss Account, as a result of which the assessee reflected loss of more than 3 crores during impugned AY. 2.2 To confirm the transactions, notice u/s 133(6) was issued to HDIL against which a reply was received from HDIL along with ledger extracts etc. The perusal of the same revealed that for impugned AY, HDIL accepted running bills of ₹ 549.08 Lacs against the assessee. The assessee was confronted with the discrepancy. In the absence of any reply from assessee, the aforesaid amount of ₹ 549.08 Lacs was br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee should have recognised the revenue arising from the construction contract with HDIL. It is a fact that there was dispute between assessee and the HDIL and no payments were received by the assessee. The A.O. had tried to bring the amount of bills raised by the assessee to tax since the assessee was following mercantile method of accounting. The AO was also of the view that there is reasonable certainty of receipt of the income in future. The assessee, on the other hand, submitted that since there was a dispute with HDIL there was no surety of receiving any money from it and during the year in spite of the all-round efforts assessee could not realize the amounts as per the bills raised from HDIL and in view of this it is contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income by the assessee will flow from M/s. HDIL to assessee is not clear. The stand of the assessee that there is uncertainty of realization of income is not without force and is found to be in accordance with accounting standards. As per the Accounting Standard, when consideration is not determinable within a reasonable limit the recognition of revenue is postponed. In such cases, it may be appropriate the recognize revenue only when it reasonably certain that the ultimate collection will be made. This view is supported by the decision of the Hon'ble ITAT Hyderabad Bench Dt.12.02.2014 in the case of S.P. Real Estate Developers Pvt. ... vs Department of Income Tax in ITA No. 1058/Hyd/2010. In view of this discussion the addition made by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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