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Issues involved: Assessment based on project completion method vs. percentage completion method for builder/developer for AY 2008-09.
The appeal was filed by the Revenue against the order of Ld. CIT(A)-39, Mumbai for AY 2008-09, regarding the assessment of a builder/developer following project completion method. The Assessing Officer (AO) applied percentage completion method, resulting in additions to the income declared by the assessee. The assessee contended that they have consistently followed the project completion method, which was accepted in previous assessment years u/s. 143(3) of the Act. The Ld. CIT(A) agreed with the assessee, directing the AO to delete the additions made based on percentage completion method. The Revenue appealed against the Ld. CIT(A)'s order, arguing in favor of the application of the percentage completion method. The assessee relied on a previous ITAT order in their own case for AY 2007-08, supporting their consistent use of the project completion method. The Tribunal considered the legal position that an assessee can choose a recognized accounting method as long as it is consistently followed. It noted that the projects in question were not completed during the relevant assessment year. Reviewing the past assessment history of the assessee, the Tribunal found that project completion method was consistently accepted in previous years. The Tribunal also examined specific details of the projects in question, concluding that there was no reason to overturn the Ld. CIT(A)'s decision. Ultimately, the Tribunal dismissed the Revenue's appeal, confirming the decision to allow the assessee to use the project completion method for the assessment year in question.
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