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TMI Blog2012 (10) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... the subsequent year - as in the present case the undisputed facts in the case remain that project is completed only upto 16% & also the assessee has option to adopt work completion method( as decided in case supra) the income could not be assessed even with reference to AS-7. Moreover, the other undisputed fact is also not controverted that assessee did not sell any portion of the impugned project and has started earning lease rental from the said project on long term basis. Therefore, keeping in view all these facts, CIT(A) has rightly deleted the addition - against revenue. Interest received on FDR - Held that:- CIT(A) has rightly decided that since the assessee has capitalized all the cost of the project, the interest earned by it fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the assessing officer applying percentage completion method (Revised AS-7) by taking net profit percentage after depreciation @ 8% of the work in progress. 4. The appellant prays that the order of the CIT(A) on the above grounds be reversed and that of the Assessing Officer be restored. ASSESSEE S GROUND OF APPEAL: On the facts and circumstances of the case, the learned Commissioner of Income Tax (A) erred in affirming the decision of Assessing Officer for assessing interest income of Rs. 9,53,936/- separately under the head Income from other sources instead of netting with interest payable amounting to Rs.20,40,618/-. As done by your appellant. ITA NO.2422/MUM/2011- ASSESSEE S APPEAL: 2. The assessee is carrying on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction contract. It was submitted that assessee is not a contractor for anybody else and constructing building on its own. It was submitted that according to the decision of the Tribunal in the case of Awadehesh Builder (37 SOT 122), on the very assessment year it was held that even in terms of revised guidelines described in AS-7, the income could be accounted only on completion of the project when the flats were sold. It was observed that since the assessee had followed one of the prescribed methods and the same method had been accepted in the earlier years, the method could not be changed by the AO in the subsequent year. It was held that the assessee was right in computing its income on the basis of completed contract method. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of decision of Hon ble Supreme Court in the case of East India Housing and Land Development Trust vs. CIT, 42 ITR 49 (SC) it was pleaded that the lease income declared by the assessee has to be assessed as rental income and in this view of the situation after considering the aforementioned submissions of the assessee Ld. CIT(A) has deleted the addition of Rs.1,58,08,518/-. 2.4 On the second issue Ld. CIT(A) has upheld the addition regarding assessability of interest received on FDR on the ground that the assessee has accepted that it has created capital asset in the form of completed project which has been leased out to tenants for earning rental income, the interest received by the assessee cannot be set off against the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the above mentioned project and had given the one phase of the project after its completion to various entities on long term lease, the details of which was also filed at page -2 of the supplementary paper book showing the details of the parties to whom the premises from the completed project were leased out. All the lease agreements are varying between 5 years to 15 years and assessee has received monthly lease rent of Rs. 1,47,65,013/- apart from deposits of Rs. 21,76,04,136/-. It was further submitted that assessee had also returned the advances received by it from some of the parties and this fact has also been noted by the Ld. CIT(A). Thus it was pleaded by Ld. A.R that in any case the income as assessed by the AO could not be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y. 2009-10 from let out premises on completion of one phase of project in the F.Y. 2008-09. (v) In the computation of income for A.Y. 2007-08 appellant has shown profit and gains from business from sale of plot of land at Rs.8,83,40,711/- and has paid taxes accordingly. 2.10 The fact that project is completed only upto 16% has also not been controverted by the revenue. According to aforementioned decision of Tribunal in the case of Awadhesh Builder (supra), the assessee has option to adopt work completion method. If the same is taken into consideration, as project has not been completed during the year and only 16% of the project is completed, the income could not be assessed even with reference to AS-7. Moreover, the other undisput ..... X X X X Extracts X X X X X X X X Extracts X X X X
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