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TMI Blog2021 (1) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... HIGH COURT] it is evident that the first substantial question of law involved in this appeal is no longer res integra. Therefore, the first substantial question of law is answered against the revenue and in favour of the assessee. Method of accounting - percentage completion method or project completion method - Whether the assessee is entitled to the project completion method in the absence of regular books of accounts required to be maintained by the assessee? - HELD THAT:- The Tribunal relied upon the decision in the case of PRESTIGE ESTATES PROJECTS LTD. [ 2020 (5) TMI 239 - KARNATAKA HIGH COURT] rendered by it and held that for the Assessment Year 2005- 06 the Accounting Standard 7 was not applicable to the real estate develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conditions to be fulfilled for claiming deduction is that the total built up area of the residential units in the housing project shall not exceed 1500 square feet n the city of Bangalore? 2. Whether the Tribunal is right in holding that the project completion method is a recognized method of accounting without examining as to whether the assessee is entitled to the project completion method in the absence of regular books of accounts required to be maintained by the assessee? . 2. Facts leading to filing of this appeal briefly stated are that the assessee is a firm engaged in the development of real estate and construction of apartments. The assesse filed its return of income for the Assessment Year 2009-10 and claimed ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the revenue by placing reliance on the decision of this Court in CIT Vs. SJR BUILDERS in ITA No.32/2010 dated 19.03.2012 and confirmed the order passed by the Commissioner and held that the assessee is eligible for deduction under Section 80IB(10) of the Act proportionately. In the aforesaid factual background, the revenue has filed this appeal. 4. Learned counsel for the revenue submitted that the Tribunal grossly erred in holding that the assessee is entitled to the benefit of proportionate deduction under Section 80IB(10) of the Act in respect of the facts which is confirmed to the limits under the relevant provision of the Act. It is further submitted that the assessee is not eligible for proportionate deduction under Section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GADE ENTERPRISES LTD. (2020) 120 TAXMANN.COM 346 (KAR) and CIT Vs. SJR BIJILDERS , supra and the decision of Madras High Court in CIT Vs. ARUN EXCELLO FOUNDATIONS (P) LTD. (2013) 259 CTR 362. Learned Senior counsel has further submitted that during the course of the proceedings, the assessee submitted that it was following project completion method and the Tribunal by placing reliance on the decision of PRESTIGE ESTATE PROJECTS, supra, for the Assessment Year 2005-06, has held that the Accounting Standard 7 was not applicable to real estate developers. Therefore, percentage completion method cannot be thrust upon the assessed and the assessee was right in following the project completion method of accounting as per Accounting Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ethod cannot be thrust upon the assessee and the assessee was right following the project completion method of accounting as per Accounting Standard 9. The aforesaid decision has been upheld by this Court in CIT Vs. PRESTIGE ESTATES , supra. Besides it, once the first substantial question law is answered in favour of the assessee, the second substantial question of law is otherwise even rendered academic. The Institute of Chartered Accountants has issued a clarification wherein it has been clarified that revised Accounting Standard 7 is not applicable to the enterprises undertaking construction activities. Therefore, the second substantial question of law is also answered against the revenue and in favour of the assesee. In the result ..... X X X X Extracts X X X X X X X X Extracts X X X X
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