Question 1

What are the key legal issues in ITA No. 3064/M/2024?

Accepted Answer

1. Whether the learned CIT (A) has erred in deleting the addition of Rs. 35,119,146/– made by the AO by applying percentage completion method? 2. Whether the learned CIT (A) has erred in deleting the addition by ignoring the fact that substantial portion of the work was completed?

Question 2

What are the facts of ITA No. 3064/M/2024?

Accepted Answer

The case involves an appeal by the Assistant Commissioner of Income Tax, Thane against the appellate order passed by the Commissioner of Income Tax (Appeals) – Pune. The Assessing Officer had made an addition of Rs. 35,119,146/– by applying the percentage completion method, which was deleted by the Commissioner of Income Tax (Appeals) – Pune. The Assessing Officer argued that the deletion was erroneous as the assessee satisfied all the conditions for revenue recognition specified in accounting standard – 9 guidelines issued by ICAI, and therefore revenue should be recognized by applying the percentage completion method as per accounting standard – 7 guidelines. The assessee, a partnership firm engaged in the development of real estate, had consistently followed the project completion method for its projects. The Tribunal found that the assessee is a realistic developer engaged in the business of developing housing projects at Navi Mumbai. The Tribunal held that the choice of accounting method rests with the assessee and that the project completion method adopted by the assessee is a correct method of accounting.

ITA No. 3064/M/2024

Parties Involved

Facts Summary

Legal Issues

Judgment Outcome

Precedents Relied Upon

Similar Judgements