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TMI Blog2021 (10) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Respondent : Ms. Nidhi Srivastava, CIT-DR ORDER PER SANJAY GARG, JUDICIAL MEMBER : The present appeal has been preferred by the assessee against the order dated 03.01.2018 of the Ld. Commissioner of Income Tax (Appeals)-, Ghaziabad, (hereinafter referred to CIT(A) ) for the Assessment Year 2014-15. The assessee has raised following grounds of appeal:- 1. That the order of learned Commissioner of Income Tax (Appeals) is against law and facts of the case. 2. That the Ld. CIT(A) has erred in not giving its findings that appellant s income was to be computed by adopting the method employed by it and could not be computed by applying AS-7, ignoring the findings of Hon'ble jurisdictional High Court of Allahabad in appellant's own case in the immediately preceding year, i.e. A.Y. 2013-14. 3. That the CIT(A) has grossly erred in not appreciating that the appeal was against an order u/s 143(3) passed in compliance to directions u/s 144A, and order u/s 264 was simply to amend direction u/s 144A to the effect that estimated cost of project should be adopted at a figure of ₹ 434,51,74,472/- [599185397 (+) 178380432 (+) 3567608643] while comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting system. It is also a matter of record and undisputed that at the time of survey on 11.09.2014: i. No difference in cash in hand was found; ii. No difference in stock in hand was found iii. No unrecorded transaction was found; iv. No voucher or bill was found which' had not been ledgerised or was not entered in the cash book. 5.5. It is also undisputed that the assessee had been furnishing its return of income regularly from the assessment year 2003-04 and recognizing revenue for the purpose of computing the income on the basis of sales made of the area/space booked. The aforesaid method of recognizing revenue was never disputed by the revenue in any of the preceding assessment years as on the basis of the returns of income filed, assessment's were also made u/s 153A/143(3) and the income recognized on the basis of the aforesaid method was accepted through out in the past. The assessee has been regularly following Project Completion Method of accounting and the revenue was recognized at the time of registration of the residential unit in the name of the customer: Till the time of registration of the residential units the amounts received from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and the legal position as above it is held that the Project Completion by the ICAI which has been regularly followed by the assessee. The assessee being a real estate developer and j not a construction contractor, Project Completion Method is the 'right method for determining the profits. The Project Completion Method being followed should not have been disturbed by the AO. 5.7. We also find that the judgment of the Hon ble High Court of Delhi in the case of Paras Buildtech (supra) covers the issue in favour of the assessee wherein their lordships have held as under: 21. In the present case, there was therefore-no good reason for the ITAT to have reversed the finding of the CIT (A). The only reason given in the impugned order of the ITAT is that risks and rewards' of ownership were transfeired to the buyers who had paid the booking advance amounts and in some cases these rights were transferred to third parties. However, this does not in any manner affect the treatment of the said amounts in the books of the Assessee. As noted hereinbefore, the expenses of construction were not debited to the P L account of the Assessee. It was shown as cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to shift the stand at this stage so as to contend that the respondent-assessee is actually not a Rea! Estate Developer but a Contractor. In view of the above position, the decision of the Apex Court in the case of M/s Larsen and Toubro Limited and another Vs. State of Karnataka and another, 2013 UPTC 1277 is of no assistance to the appellant rather in view of the decision of the Supreme Court in Commissioner of Income Tax Vs. Excel Industries Limited (2013) 38 Taxmann.com 100 (SC) it is not prudent for us to take a different view with regard to the nature and status of the business of the respondent-assessee inasmuch as a consistent view taken by the authorities regarding it in favour of the respondent-assessee is not liable to be disturbed in the absence of any convincing and compelling reasons. The second question, which falls for our consideration, is whether the respondent-assessee is obliged to maintain its accounts according to AS-7 or AS-9. In this connection, the Tribunal has recorded a finding that the respondent-assessee had been regularly following the project completion method of accounting (AS-9) and that no defects were ever found in its books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actor simplicitor, the system of accounting followed by it for the last many years is in accordance with recognized procedure, the Department cannot reject the said system followed by it for the reason that it ought to have followed the other recognized system AS-7 system i.e. percentage completion system. The Act or the Rules nowhere mandates for following a particular accounting system by the respondent-assessee, therefore, if any of the recognized mode of accounting has been followed, we find that no illegality has been committed by the respondent-assessee. In view of the aforesaid facts and circumstances as well as findings as returned by the Income Tax Appellate Tribunal, there is hardly any question of law, which arises for our consideration. This appeal lacks merit and is dismissed. 3. The ld. DR has fairly agreed that the issue is squarely covered in favour of the assessee by the decision of the Hon ble High Court. 4. Respectfully following the decision of the Hon ble High Court, it is held that the assessee was justified in adopting the recognized method of accounting i.e. project completion method. The impugned addition made by the lower authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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