TMI Blog2023 (9) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... are found in the paper book filed before us clearly reveal that the construction activity on relevant plots had not reached even the lintels level. Observations of AO that the entire construction work was over and vacant possession of the villas was handed over to the respective buyers is, therefore, factually incorrect. When the sale deeds were available to the AO it is evident from the photos appended to the sale deeds that the construction work is at preliminary level, AO could have verified this fact from the field. It is, therefore, incorrect to conclude that the project work was complete or that the assessee should recognize the entire revenue. Thus we deem it just and necessary to quash the orders of the authorities below and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny of the return of income of the assessee for the assessment year 2013-14, the learned Assessing Officer noticed that in the month of March, 2013, the assessee registered 20 villas in respect of which, approximately 8% of the development activity has taken place. The aggregate sale consideration of the registered villas as per the Documents is at Rs. 16,95,00,000/-. Out of this amount, the assessee received only a part of amount. In the sale deeds, it is clearly mentioned that the property is mentioned as semi-finished villa, and photo of frame/structure submitted at the time of registration. 4. For the assessment year 2013-14, assessee filed return of income on 15/09/2013 declaring income of Rs. 23,14,944/- with turnover of Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Completion Method, which is not disputed by the learned Assessing Officer and the books of assessee were not rejected by the learned Assessing Officer. Learned CIT(A) referred to the case of one Smt. R.P. Prashanthi, vide document No. 4477/2013, dated 22/03/2013 and observed that the action of the learned Assessing Officer was not correct as the sale consideration mentioned in respect of semi-finished villas also includes the value of the land, the value of the structure as on the date of registration and also to the expenditure to be incurred for the development of villas upto final stage. 8. Secondly, on a perusal of the balance sheet which is available in the paper book, learned CIT(A) found that on the liabilities side, the advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative for the assessee to disclose the entire sale consideration and then, plead for the Percentage Completion Method. According to the learned DR, the sale deeds reveal that as on the date of registration of such sale deeds, the entire construction of the villas was over and the assessee received the entire sale consideration also. 11. Per contra, it is the submission by the learned AR that the assessee has been following the Percentage Completion Method for recognizing the revenue and this is also one of the accepted methods. Further contention of the learned AR is that the sale deeds contain the entire sale consideration amount and they also show the mode of payment, but, as a matter of fact, as stated in the assessment order itself, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es from the customers at Rs. 10.24 crores as on the date of 31/03/2013 was shown: whereas on receipts side of Income and Expenditure account, the construction income of Rs. 2.91 crores and closing work in progress at Rs. 2.94 crores were shown. On a careful consideration of the sale deeds, we find that in many of the sale deeds, the sale consideration was reported by way of cheques and such cheques were dated beyond 31/03/2013. For example, we find it from the sale deed in favour of Sri Chidura Satish, where out of nine cheques issued, only four cheques were in the relevant assessment year, whereas the five cheques were for the assessment year 2014-15. So also in the case of Shri P.V. Narasimha Reddy out of eight cheques, two cheques were r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 as Rs. 10.24 crores, come nearer to the figures given in the chart furnished by the assessee. It is so because the chart furnished by the assessee shows the receipts during the financial year 2012-13 at Rs. 5,49,10,250/- whereas according to the learned CIT(A), the aggregate of the construction income and closing work in progress comes to Rs. 5.93 crores and the interest of Rs. 7.79 lakhs is excluded from it to reach the correct figure. 16. In these circumstances, we are of the considered opinion that factual verification as to how much of sale consideration that was received during the financial year 2012-13 is necessary. Apart from this, from the sale deeds, the copies of which are found in the paper book filed before us clearly reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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