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TMI Blog2024 (11) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... following project completion method. In view of the aforesaid transitional provisions, the action of the AO in applying the percentage completion method on the basis of ICDS III by part-reading the same, cannot be held to be justified. The impugned addition made by the AO for the year under consideration by applying percentage completion method of accounting is not justified and the same is accordingly set aside. Appeal of the assessee stands allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... r under consideration had not recognised revenue on the plea that assessee had been maintaining accounts as per project completion method. However, the assessee incurred 84.28% & 67.34% of total cost of project of Mayfair Greenwood project & Mayfair Elite project respectively. Further, the assessee executed agreement for sale for 52870 unit area out of 77920 unit area i.e. 67% and 23270 unit area out of 59310 unit area i.e. 39% in respect of project Mayfair Greenwood project and Mayfair Elite project respectively. Also the assessee had received 96.90% & 81.13% of total sale consideration amount in respect of Mayfair Greenwood project & Mayfair Elite projects respectively. The Assessing Officer further observed that Institute of Chartered Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... east 10% of the contract consideration as per the agreement of sale are realised at the reporting date in respect of each of the contracts. 3.1 The Assessing Officer, thereafter, analysed various contracts executed by the assessee with proposed purchasers and also noted that the assessee had accepted instalments at certain stage of completion of the flats and accordingly calculated the income of the assessee by applying percentage completion method. So far as the contention of the assessee that it has been regularly following project completion method, the Assessing Officer, in this respect, observed that on perusal of Income Tax Return for A.Ys 2012-13 and 2013-14, it revealed that the assessee during the said assessment years had declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, the work-in-progress was shown in relation to other two pending projects. The ld. Counsel has further referred to various submissions made before the Assessing Officer and ld. CIT(A) to submit that the assessee has been consistently following project completion method, which has not been rebutted by the revenue authorities. 5.1 So far as the reliance of the Assessing Officer on the ICDS III notified by the Central Government is concerned, the ld. Counsel has submitted that the Assessing Officer has partially noted the provisions of accounting standards and that he has totally ignored the transitional provisions mentioned in the said accounting standards ICDS III, which for the sake of ready reference, is reproduced as under: "Transi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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