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TMI Blog2022 (6) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... on in cost of material and change in specification by customers had led to the estimated cost at Rs.138 crores. As before CIT(A) assessee had furnished Architect certificate wherein the initial estimated cost of project and with the increase in saleable area and other factors the revised cost has been certified. Based on the total estimated construction cost the percentage of the completion works out to 24.89% which is less than the 25%, being the limit prescribed for recognition of Revenue. We thus find that CIT(A) after considering the details, has given a finding that the architect certificate as on 31.03.2014 has given head wise, item wise project cost and there is no material placed by AO to show that the certificate issued by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for A.Y. 2014-15 on 18.09.2014 declaring total income at Rs.4,06,880/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 29.12.2016 determining the total income at Rs.13,63,41,560/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 30.01.2019 in Appeal No.9/10774/2017-18 granted substantial relief to the assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following grounds: 1. On the facts and circumstances of the case the Ld CIT(A) erred in deleting the addition amounting to Rs.13,59,34,679/- to the income of the assessee company as percentage completion of the project has reached 28.63% which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had taken all the critical necessary approvals for the commencement of project, 100% area i.e. 264580 sq. ft. was secured by the contracts or agreements with buyers, more than 10% contract consideration was received by the assessee. The contentions of the assessee that since only 24.89% of the project was completed and therefore no Revenue recognition was called for, was not found acceptable to AO as according to him, assessee had calculated the aforesaid percentage completion based on cost incurred till 31.03.2014 at Rs.34.35 crores and total cost of Project (excluding Land Cost) as Rs.138 crores as against 124 crores claimed by assessee in A.Y. 2013-14. AO also noted that on the website of the assessee, it had uploaded a report for Decemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.138 crore for the purpose of working out the project completion. He submitted that if the percentage completion of the project is worked out on the basis of Rs.120 crores, the project completion works out to more than 25% and therefore the AO was fully justified in estimating the net profits. He further submitted that the documents submitted to the Government agencies has to be considered to be an authentic figure and the cost of project based on the Architect Certificate of Rs.138 crores was without any basis. He thus supported the order of lower authorities. 7. Learned AR on the other hand reiterated the submissions made before AO and CIT(A) and further submitted that the estimated cost of construction in A.Y. 2013-14 was Rs.124 cror ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling practice in the construction industry. He thereafter submitted that CIT(A) after considering the relevant material has decided the issue in favour of the assessee. He thus supported the order of CIT(A). 8. We have heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to the estimating the cost of construction and thereby the percentage of completion and estimation of profits. It is the undisputed fact that assessee had reported the project cost at Rs.120 crores in the compliance report and also in the website of the assessee. Before us, assessee has however submitted that in the project that was initially conceived, the total saleable area was 251634 sq. ft. but ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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