Percentage of completion method required for construction and service contracts; limited exceptions and revenue/cost rules apply. Section 43CB requires profits from construction and service contracts to be computed by the percentage of completion method under the Income Computation and Disclosure Standards, with service contracts of not more than ninety days using the project completion method and contracts involving indeterminate acts using the straight line method. Contract revenue must include retention money and contract costs must not be reduced by incidental income such as interest, dividends or capital gains. The provision is effective from April 1, 2017.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Percentage of completion method required for construction and service contracts; limited exceptions and revenue/cost rules apply.
Section 43CB requires profits from construction and service contracts to be computed by the percentage of completion method under the Income Computation and Disclosure Standards, with service contracts of not more than ninety days using the project completion method and contracts involving indeterminate acts using the straight line method. Contract revenue must include retention money and contract costs must not be reduced by incidental income such as interest, dividends or capital gains. The provision is effective from April 1, 2017.
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