Ambrosia Realty vs. ITO

Parties Involved

Facts Summary

The assessee, Ambrosia Realty, is a partnership firm engaged in the real estate business. The dispute arose regarding the method of accounting for revenue recognition followed by the assessee for its project 'Earth Ambrosia' during the assessment year 2016-17. The assessee contended that it recognized revenue following the project completion method as per Accounting Standard-9 (AS-9), while the Assessing Officer (AO) held that the assessee should have followed the Percentage Completion Method as per the guidance note issued by the Institute of Chartered Accountants of India (ICAI) on accounting for Real Estate transactions in 2012. This resulted in an addition of Rs.2,24,46,419/- to the income of the assessee.…

Legal Issues

• 1. Whether the Ld. CIT (A) erred in confirming the addition made by AO of Rs.2,24,46,419/- on account of alleged suppression of profit.
• 2. Whether the Ld. CIT (A) erred in confirming the addition made by AO on the ground that the assessee ought to have recognized revenue on the percentage completion basis.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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