9911796707
TMI Blog2022 (6) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... business of real estate development of a project "Hotel cum Commercial Complex" at Village Ulahaswas Sector 60, Gurgaon Haryana. Assessee electronically filed its return of income 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions required to apply percentage completion method to recognize revenue was fulfilled by the assessee during the year under consideration, as according to him, assessee 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 L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed the cost of construction to various Government agencies at Rs.120 crores and therefore the assessee was not justified in considering the total cost of project at Rs.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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other factors, the architect estimated the total cost of construction of the project as on 31.03.2014 at Rs.138 excluding the cost of land which was as per the prevailing 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 we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) while deciding the issue has given a finding that the estimated project cost of Rs.120 crores was calculated as per the provision of Water and Air Act and according to which the amount incurred in Government fee and project over head was not required to be included to the cost of project. Based on the reasoning given by CIT(A) in the order, he has concluded that the cost of completion of the project worked out to 24.89% which is less than 25%. Before us, no fallacy in the findings of CIT(A) has been pointed out by Revenue. In such a situation, we find no reason to interfere in the order of CIT(A). Thus the ground of Revenue is dismissed. 9. In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 23.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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