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TMI Blog2012 (2) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was not a contractor and the assessee was not governed by AS-7 of the guidelines of institute of Chartered Accountants of India, ignoring the underlying fact that the assessee had performed and undertaken all actions as a contactor and camouflaged the performance as developer . 2. The CIT(A) erred in law and on facts in deleting interest disallowance of ₹ 10,94,313/- without specifying any reasons, overlooking the fact that the company had diverted the funds for the directors of the company, which caused delayed payment to and charging of interest by the Municipal Corporation. 2. In ground No.1 of the Revenue, the brief facts are that the assessee is engaged in the business of construction and trading of transfer of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the profit of the assessee from Hill Crest Project @ 8% of the booking advances received i.e. ₹ 10.92 lakh (8% of ₹ 1,36,50,000/-). This amount was added back to the returned income. 3. Before Ld. CIT(A) there were two issues to be decided whether the assessee was a contractor as contemplated under Accounting Standard- AS-7 and the other issue was regarding method of recognizing the revenue. It was observed by Ld. CIT(A) that accounting standard AS-7 refers to the method of accounting to be followed in respect of construction contracts awarded to the contractor. The assessee is not a contractor but is a developer who in turn awards contract to different contractors. Therefore, accounting standard AS-9 will be applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied out by the assessee during the year and there was a dispute of the parties who had filed civil suit in Mumbai civil court. The assessee had received the advances which are duly reflected in the balance-sheet of the assessee. There is no certainty of the Revenue recognition at this stage. Moreover, all the significant risks and the ownership at this juncture vest in the hands of the owner i.e the assessee and they have not been transferred to the buyer or the proposed buyer. Therefore, in the circumstance and facts of the case, we find no infirmity in the order of Ld. CIT(A), which appears to be quite reasoned one and he has justified in reversing the order of the AO on the issue. Thus, ground No.1 of the Revenue is dismissed. 5. As r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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