TMI Blog2022 (3) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... missed. - ITA No. 3160/DEL/2016 - - - Dated:- 14-3-2022 - Shri N.K. Billaiya, Accountant Member, And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Sahil Aggarwal, Adv, Shri Sudesh Garg, Adv For the Department : Shri Manu Chaurasiya, Sr. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal by the Revenue is preferred against the order of the CIT[A] 23, New dated 03.03.2016 pertaining to Assessment Year 2011- 12. 2. The grievances of the Revenue read as under: 1. The order of Ld. CIT(A) is not correct in law and facts. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of ₹ 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 ₹ 28,34,206/- on account of unexplained creditors. 5. On facts and circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lahari Investment (P.) Ltd. [2008] 299 ITR 1/168 Taxman 95 (SC) mentioned herein above wherein it has been held that two methods are prescribed in Accounting Standard No.7. They are 'completed contract method and percentage of completion method ... the same result could be attained by any one of the accounting methods.... Thus, as both the methods of accounting are recognized methods of accounting, the assessee is at liberty to choose any of the above and if any one of the method of accounting is consistently followed by the assessee, the assessing officer cannot change the method of accounting to the percentage of completion method and that the completed contract method leads to objective assessment of the results of the contract and that the income is revenue neutral whichever method is followed by the assessee. from the conspectus of judgments mentioned herein above, the following principles can be discerned: In case of a building project, the Institute of Chartered Accountants of India, which is an authority on prescribing accounting standards, had prescribed accounting standard AS-7 in 1983 for accounting of income in respect of real estate projects and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be accounted only on completion of project when the flats were sold, i.e., when legal title passed to the buyer or when seller entered into agreement with the buyer for the sale and gave possession to the buyer under the agreement; in a case where the assessee 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 followed by the appellant, therefore, could not be faulted with by the revenue authorities and on that basis it is neither correct nor justified to say that the accounts did not present c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l brought on record, that the profits declared is distorted or not correct, he is not empowered to change the method of accounting being followed by assessee. Respectfully following the judgments including that of the Hon ble Supreme Court and the jurisdictional High Court, it is held that the Assessing Officer did not have any basis for assessing the contract in receipts /advances on PCM. The addition on this account is, therefore, deleted. 8. Before us, the ld. DR strongly supported the findings of the Assessing Officer. It is the say of the ld. DR that the assessee itself has been accepting percentage completion method since Assessment Year 2008-09 onwards and, therefore, should not change his accounting policies for the year under consideration. 7. Per contra, the ld. counsel for the assessee stated that the assessee had never accepted the reworking of the profit made by the Assessing Officer in the earlier Assessment Years. It is the say of the ld. counsel for the assessee that the earlier Assessment Years were framed u/s 153C of the Act and the assessee had challenged the very assumption of jurisdiction u/s 153C of the Act which has been decided in favour of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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