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TMI Blog2015 (3) TMI 1211X X X X Extracts X X X X X X X X Extracts X X X X ..... firm has sought to repudiate the aforesaid conclusion of the Assessing Officer b5y attempting to demonstrate that the possession given to the customers was only a temporary possession whereas the final possession was to be given only after obtaining the completion certificate from the ‘local authority’, which happened in the month of April, 2005, which corresponds to the next assessment year. In our considered opinion, the case being set-up by the assessee is quite superfluous and is devoid of merit. We find that at no stage it was the case of the assessee that it is recognizing sale of flats on the basis of final handing over of possession. In-fact, there is no material on record to suggest that assessee has differentiated between a tempor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aptioned appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-II, Pune dated 20.12.2010 which, in turn, has arisen from an order dated 31.12.2007 passed by the Assessing Officer u/s 143(3) of the Income-tax Act, 1961 (in short the Act ) pertaining to the assessment year 2005-06. 2. In this appeal, assessee has raised the following Grounds of Appeal :- 1. The learned CIT(A) has erred in dismissing the appeal, without appreciating the facts of the case and submissions of the appellant. 2. The learned CIT(A) has erred in confirming the addition of ₹ 1,07,48,442/- made by the A.O. on account of estimated profit on the alleged sales in the current year on the ground that appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee by a sum of ₹ 1,07,48,442/-. This aspect of the controversy has also been upheld by the CIT(A) and therefore the assessee is in further appeal before us. 4. The short point involved is the manner in which assessee has computed its income from project - Om Megasparsh . The assessee is maintaining its accounts on project completion method and it is recognizing income on the basis of handing over of possession of flats to the customers. Pertinently, the aforesaid method of accounting adopted by the assessee is not in dispute. At the time of hearing, the Ld. Representative for the assessee pointed out that similar method of accounting has been accepted by the Revenue in the past. 5. In this background, the dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed by the CIT(A). 6. Before us, the Ld. Representative for the assessee vehemently pointed out that the verification exercise carried out by the Assessing Officer has been wrongly used to say that assessee had handed-over possession of the flats in Wings A C to the respective buyers. It was pointed out that, before the lower authorities assessee submitted that the possession referred to by the respective buyers was only a temporary possession given in order to complete the furniture work, etc. and that the final possession was handed-over to the flat-holders of Wings A C only in the month of April, 2005. It was contended that the sales with regard to the flat4s in Wings A C were liable to be recognized in the previous year from A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession to the customers. The verification exercise carried out by the Assessing Officer revealed that even with respect to the flats in Wings A C assessee had handed-over possession to the customers whereas in the return of income filed, such transactions were not recognized as sales during the year itself. The assessee firm has sought to repudiate the aforesaid conclusion of the Assessing Officer b5y attempting to demonstrate that the possession given to the customers was only a temporary possession whereas the final possession was to be given only after obtaining the completion certificate from the local authority , which happened in the month of April, 2005, which corresponds to the next assessment year. In our considered opinion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dverse evidence other than the aforesaid 20 cases, for other flats in Wings A C, no addition is merited in the year under consideration. 10. In our view, the alternate plea ra6 ised by the assessee is quite justified. We deem it fit and proper to restore the matter back to the file of the Assessing Officer to re-quantify the addition liable to be made on the basis of the evidence available with the Assessing Officer which demonstrates that the possession was handed-over by the assessee to the respective buyers in Wings A C in the previous year relevant to the assessment year under consideration. The Assessing Officer shall compute the profit relatable to the 20 flats as enumerated in Annexure A to the assessment order and dele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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