Court upholds ITAT decision on accounting method consistency, dismissing Revenue's appeal.

The Court upheld the ITAT's decision in favor of the assessee, emphasizing the consistency of the assessee's accounting method over assessment years and the previous acceptance of the project completion method by the AO. The Court found no substantial question of law with universal applicability, leading to the dismissal of the appeal by the Revenue.

---

---

Issues:
1. Whether the ITAT erred in accepting the method of treatment of revenue and income by the assessee.

Analysis:
The Revenue raised a question regarding the ITAT's acceptance of the assessee's method of revenue and income treatment, specifically in relation to construction projects. The AO argued that the assessee did not follow the Project Completion Method or the Percentage Completion Method as required under Section 145 of the Income Tax Act despite claiming to adhere to AS-9 method. The appellant contended that the ITAT wrongly accepted the assessee's submissions, citing guidance from the Institute of Chartered Accountants on the applicability of AS-7 to construction contracts. The ITAT's findings highlighted that the AO had previously accepted the project completion method without estimating income on work-in-progress, emphasizing the consistency of the assessee's accounting method over various assessment years.

The Court noted the significance of the instances highlighted by the ITAT, where the AO had previously accepted the project completion method applied by the assessee without any indication of large-scale activity. The Court emphasized that the findings were specific to the circumstances of the case and did not warrant a question of law with universal applicability. Consequently, the Court concluded that no substantial question of law arose from the case and dismissed the appeal.

---