9911796707
TMI Blog2017 (3) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... ge completion method on such projects in the previous assessment years and also in the subsequent assessment years and therefore following the principle of consistency there is no justification in bringing to tax the amount transferred to deferred sales suspense account for which no work has been carried out by the Assessee in the current assessment year. In view of the above findings of the Ld. CIT (Appeals), we do not find any valid reason to interfere with the findings of the Ld CIT (Appeals). - Decided against revenue - ITA NO. 2650/MUM/2016 - - - Dated:- 6-3-2017 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER For The Appellant : Smt Beena Santosh For The Revenue : Ms. Lata Parulekar ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve undertaken redevelopment on three plots and later on three additional plots were purchased and amalgamated with the same. The Assessing Officer noticed that the Assessee has shown that it had completed 58% of the construction work on the above amalgamated plot and as such offered total income at ₹ 27,56,653/- against the total revenue recognition at ₹ 6,60,08,698/- which was further adjusted against the brought forward losses pertaining to preceding years. The Assessing Officer observed that the Assessee had received ₹ 1,06,29,600/- as construction cost and the same was considered as sale proceeds during the current assessment year and at the same time, 42% of the said revenue was transferred to deferred sales suspense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit. Therefore, it was submitted that Assessee has transferred 58% of the amount from the cost of construction received account to the sales for the year and 42% amounting to ₹ 44,64,432/- has been carried over as deferred sales suspense account in accordance with the accounting policy and method consistently followed by the Assessee. Not convinced with the submissions of the Assessee, the Assessing Officer treated the said amount of ₹ 44,64,432/- as income of the Assessee for the current assessment year. On appeal, the Ld. CIT (Appeals) deleted the disallowance against which the Revenue is in appeal before us. 5. The Ld. DR vehemently supported the orders of the Assessing Officer in treating the amount transferred to deferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as per accounting policy adopted by appellant. The appellant follows percentage completion method of project as a whole and accounted for 58% of such receipts as revenue receipt and balance 42% was transferred to Deferred Sales Suspense account and accounted the same in subsequent year based on stage of construction of project. On the other hand, the AO contended that such receipts represented reimbursement of cost and same had to be counted in full and could not be deferred in part in subsequent year. 2.7 The appellant has been consistently following recognised provisions of Accounting Standard 7 issued by the Institute of Chartered Accountant of India relating to percentage completion method of revenue recognition. In such method of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompletion method Therefore, in my opinion following the principle of consistency, addition deserves to be deleted. 7. On a careful consideration of the facts and circumstance of the case and the findings of the Ld. CIT (Appeals), we do not find any infirmity in the order passed by the Ld. CIT (Appeals). The Ld. DR could not rebut the findings of the Ld. CIT (Appeals) in holding that the accounting of expenses and income in a year has to be considered on the basis of project as a whole and not on the basis of individual units. Therefore, the amount received by the Assessee from tenants / occupants for extra facilities or amenities represents revenue receipts and the same is to be accounted for on the basis of percentage completion method ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
