Milan Theatres P. Ltd. vs. DCIT Circle 12(3)(2)

Parties Involved

Facts Summary

The assessee, Milan Theatres P. Ltd., is engaged in real estate development and constructed a shopping complex known as 'Milan Mall'. Originally comprising 24 units, the mall was restructured into 179 units plus one theatre. The assessee converted the mall from a capital asset into stock-in-trade in the year ended 31.03.2015 and adopted the Project Completion Method of accounting for revenue recognition. The construction of new shops commenced in the year ended 31.03.2015 and was completed in the year ended 31.03.2017. Revenue was recognized in assessment year 2017–18 upon project completion. The assessee filed its original return of income declaring a loss, followed by revised and second revised returns. The Assessing Officer rejected the Project Completion Method and recomputed the income, disallowing certain expenses and denying TDS credit.…

Legal Issues

• 1. Rejection of the Project Completion Method of accounting
• 2. Disallowance of proportionate interest expenditure
• 3. Disturbance of computation of long-term capital gains
• 4. Denial of TDS credit of Rs. 24,96,716/-

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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