ITAT allowed the assessee's appeal and directed deletion of the...

ITAT allowed the assessee's appeal and directed deletion of the income addition made by the AO. The Tribunal held that the assessee's method of revenue recognition on project-completion basis conformed with the Guidance Note/AS-9 requirement that revenue be recognized only when all significant risks and rewards of ownership transfer, and that percentage-completion accounting applies only where the contract's economic substance is that of a construction contract. Revenue failed to rebut the assessee's evidence and did not demonstrate that the agreements effected transfer of risks and rewards or that the project had the requisite certainty and contractual character of a construction contract; accordingly the AO's addition was reversed.