ITAT Jaipur Rules in Favor of Assessee, Upholds Project Completion Method Over Percentage for 2008-09 and 2009-10.

The ITAT Jaipur allowed the appeals of the assessee for the assessment years 2008-09 and 2009-10, rejecting the revenue's grounds. The court found that the rejection of the books of account under section 145(3) was improper and upheld the assessee's use of the project completion method over the percentage completion method. The ITAT determined that the assessing authority could not change the accounting method on irrelevant considerations, leading to the deletion of the additions made. The decision was based on similar facts and previous ITAT rulings in the assessee's group cases.

---

---

Issues:
1. Rejection of books of account under section 145(3) of the Act
2. Application of percentage completion method instead of project completion method
3. Additions made due to change of method

Analysis:
1. The appeals were filed against the common order of the ld. CIT(A)- Central, Jaipur for the assessment years 2008-09 and 2009-10. The main issues raised were the rejection of books of account under section 145(3) of the Act, the application of percentage completion method in place of project completion method, and the additions made due to this change of method.

2. The counsel for the assessee argued that the issue is covered by a consolidated order of ITAT Jaipur Bench in the assessee's own group cases. The ITAT in its earlier order held that the rejection of books of account under section 145(3) was not proper and upheld the assessee's method of accounting, i.e., project completion method. The ITAT found that the assessing authority could not change the method adopted by the assessee from Project Completion Method to Percentage Completion Method on irrelevant considerations. Therefore, the provisions of section 145(3) were not attracted in this case.

3. The ITAT further stated that since the facts and circumstances were similar in the assessee's case and its group cases, the rejection of books of account and the method of accounting of percentage completion method were upheld. Consequently, the additions were deleted, and the appeals of the assessee were allowed. The ITAT pronounced the order in favor of the assessee on 16/01/2015.

In conclusion, the ITAT Jaipur upheld the assessee's method of accounting and rejected the revenue's grounds, allowing the appeals of the assessee. The judgment emphasized the importance of following the correct method of accounting and upheld the assessee's position based on the facts and circumstances of the case and previous decisions by the ITAT.

---