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TMI Blog2014 (1) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in deleting the addition of Rs. 34,20,797/- made by the Assessing Officer on account of advances from customers/ buyers. (iii) The Ld. CIT(A) ignored the findings recorded by the Assessing Officer and the fact that following of A-7 Standard of accounting is mandatory for the assessee. (iv) The appellant craves leave to add, to alter, or amend any grounds of appeal raised above at the time of hearing. 3. In this case assessee is conducting the business of colonizer and real estate, developer and developing colony known as 'Malibu Town' at Gurgaon, Haryana. The assessee filed its return of income on 30.10.2007 declaring a total income of Rs. 1,61,88,518/- against which the Assessing Officer determined taxable income at Rs. 2,05,11,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions made by the learned AR of the appellant company. It is a matter of record that the appellant company has been following a particular system of accounting for revenue recognition which has been duly mentioned by it in 'accounting policies' filed along with the return of income for the year under consideration as well for the earlier years. I do agree with the learned AR that it has been following the same method of accounting as far as revenue recognition is concerned. Schedule 19 of the Balance Sheet i.e. schedule forming part of the financial statements for the year ended on 31.03.2004 says:- "3. Revenue recognition i) Sale of land plots and other constructed properties are recognized in financial year in which the transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses. JJ For the present year under consideration, the Significant Accounting Policies are given in Schedule 20 of the Balance Sheet and says as follows:- 3. Revenue Recognition i) Revenue in respect of sale and land, plots and other constructed proprieties (except floor) are recognized in the financial year in which the transfer is made by the registration of sale deeds in favour of the customers. ii) In respect of personal floors and value floors, revenue is recognized when possession is given to customers. (Pursuant to the Haryana Government declining the registration of sale deeds of such properties, management believes that risk and reward are effectively transferred to the customers when possession is given). iii) Revenue from s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contracts in the financial statements of contractors. 4.7 In the additional evidence filed by the appellant, the appellant has given details of items shown as sales in future years which from part of additions of RS.809.68 lacs. The details are shown at Page NO.1,2,3 of the paper book filed along with the additional evidence but as mentioned above, the assessing officer, in remand proceedings totally relied on the assessment order and on the reasons mentioned herein above in para 3.3, I direct the assessing officer to delete the addition of Rs. 809. 68 lacs as the appellant has been regularly following a particular method of accounting for recognizing its revenue i.e. at the time of convening for the flat! plot and at the time of handing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition was deleted by the Ld. CIT(A). 8. We have carefully considered the submissions and perused the records. We find that it is undisputed that assessee has been following particular system of accounting for revenue recognition which has been mentioned in the Accounting Policies filed alongwith the return of income for the year under consideration as well as for earlier years. The same has been reproduced in the order of the Ld. CIT(A) quoted above. When assessee has been following the particular system of accounting consistently, Assessing Officer has chosen to depart from the accepted method of accounting of the assessee without putting forth the cogent reasoning. Furthermore, it is also undisputed that in respect of properties for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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