TMI Blog2019 (1) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... ready allowed the capitalization of these expenses. On the above facts and circumstances, we find that the stand of CIT(A) on placing reliance on the decision of this Tribunal in the case of other group concerns, on similar factual matrix, was quite appropriate and logical. The revenue is unable to controvert these decisions by any binding judicial precedents. Therefore, finding no infirmity in the order of Ld. First appellate authority, we dismiss the revenue’s appeal. - I.T.A. No.5205/Mum/2016 - - - Dated:- 4-7-2018 - Shri Saktijit Dey, JM And Shri Manoj Kumar Aggarwal, AM For the Assessee : Chetan Karia, Ld.AR For the Revenue : Saurabh Kumar Rai,Ld.DR ORDER PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. Afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, it capitalized various expenses which, inter-alia , included professional fees, technical expenses, insurance civil work under the head Capital Work-in-progress which was reflected in the Balance Sheet. At the same time, it claimed certain expenses viz. finance cost, marketing service cost, sales commission, legal, profession and other fees in the profit loss account. It was noted that the assessee reflected receipt of advances against the projects at ₹ 18.70 crores and reflected closing WIP at ₹ 17.95 Crores. The Ld. AO, observing that the assessee was following completed contract method, disallowed these expenses as claimed by the assessee in Profit Loss Account. As a logical consequence, the capitaliz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elaborately discussed herein above. Therefore, the total expenses of ₹ 3,08,64,906/- is capitalized to the WIP account and reduced from the Profit and Loss account. These expenses would be allowable in the year of completion of the project. 5.1.2 I find that the issue at hand is squarely covered by the decision of jurisdictional tribunal in the case of appellant s group concern M/s Hiranandani Palace Gardens Pvt. Ltd in ITA No.4579/M/2013 for A.Y.2009-10 wherein the Hon ble ITAT has held that the assessee, thus, has followed the accounting method which has been consistently followed by it and which is as per recognized principles of accounting. In view of the above discussion of the matter and following the above decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to controvert the fact that the assessee was following percentage of completion method which is evident from the aforesaid report of Ld. AO and the same is extracted below:- 1. During the course of assessment proceedings, the assessee has submitted audit report. On verification of the audit report, the accounting polices is disclosed at para 2.7, Page 13 which is reproduced as under:- 2.7 Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefit will flow to the company and the revenue can be reliable measured. Income from real estate sales is recognized on transfer of all significant risks and rewards of ownership to the buyers and it is not unreasonable to expect ultimate c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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