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TMI Blog2022 (3) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 8,62,95,509/- done by estimating the profit on percentage completion method. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred in holding that the A.O. had no basis for assessing the contract receipts/advances on percentage completion method. 4. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 28,34,206/- on account of unexplained creditors. 5. On facts and circumstances of the case, the CIT(A) has erred in deleting the addition on the basis of additional evidences without making them available to the A.O. for their comments." 3. Briefly stated, the facts of the case are that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and submissions and after considering the decision of the Hon'ble Supreme Court in the case of Hyundai Heavy Industries Co. Ltd 291 ITR 482 and Bilahari Investment Pvt Ltd 299 ITR 1, the ld. CIT(A) observed as under: "I have carefully considered the submissions of the appellant and the assessment order. In this case the only ground on which the addition has been made is the adoption of the Percentage Completion Method (PCM) by the AO against the Completed Contract Method (CCM) followed by the appellant company. From the the various judgment CIT v. Hyundai Heavy Industries Co. Ltd.[2007] 291 ITR 482 / 161 Taxman 191 (SC) and CIT v. Bilahari Investment (P.) Ltd. [2008] 299 ITR 1/168 Taxman 95 (SC) mentioned herein above wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llow either the project completion method or the percentage completion method; * in accordance with the provisions of section 145 of the Act 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, and that the option for choosing the system of account is with the assessee and not with the AO provided the system chosen by the assessee is consistently followed by him and such system is not a defective system, and that even a project completion method is also a recognized system of accounting; * The real estate developer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has maintained complete books of account, which are duly audited by duly qualified Chartered Accountants, has also maintained its account on mercantile basis by regularly applying Project Completion Method, has also consistently followed the same method as was applied for earlier assessment years, the auditors have reported no change in method of accounting adopted by the assessee, and the department had accepted assessee's method of accounting, in earlier years, the AO has to bring material on record to show that the system of accounting adopted by the assessee for the year under appeal was not consistently followed by the assessee or the system adopted was a defective system, and in such situation the completed contract method followe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of area, thus assessing the net profit at 45.82% of the total receipts which in itself is unusual for any construction contract business. 3.2.4 As mentioned above, the AO has not brought on record any material evidence gathered as a result of search or otherwise, and in this case no evidences was found during the course of search to show that the books of account are not properly maintained by the appellant jfhe main thrust of the AO while making the addition is that the appellant is deferring the payment of taxes. However, this allegation of the AO is devoid of merits and cannot be accepted because the appellant is consistently following a method of accounting which is recognized in real estate development business, and, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the CIT(A)/ITAT/High Court. Since the assessment order itself was quashed, there was no occasion to consider the merits of the case. Therefore, it cannot be said that the assessee has accepted the view of the Assessing Officer. 5. We have given thoughtful consideration to the rival submissions. It is true that earlier assessments were framed u/s 153C of the Act which ware quashed by the appellate authorities. Therefore, we find force in the contention of the ld. counsel for the assessee that there was no occasion to dwell into the merits of the case. 6. The factual matrix clearly shows that the assessee has followed a well recognized method of accounting following a notified accounting standard u/s 145 of the Act. We, therefore, do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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