TaxTMI 
TaxTMI 
2011 (1) TMI 1116
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....ssee, the assessee is engaged in business of construction of buildings and development. The firm had been following 'project completion method of accounting'. During the assessment year 2002-03, the assessee-firm had commenced the project known as 'Sangeeta' at Yari Road, Andheri (W), Mumbai, by acquiring development rights. The building comprises of 7 storeys consisting of 28 residential units in building No. 1 and 14 residential units in building No. 2. During the year under reference, there was a major sale of about 40 units constructed by the assessee for the total consideration of Rs. 18.7 crores and offered net profit, after claiming all the direct and indirect expenses of Rs.2,38,87,817. The assessee by applying the principles of matching cost with revenue, has made provisions for construction of expenses of Rs. 2,34,03,341 for the period April 1, 2006 to October 27, 2006, as the assessee-firm had determined profitability of the whole project." 3. The Commissioner of Income-tax took the view that, the provision for construction expenses for the period April 1, 2006 to October 27, 2006, represented the expenses that are likely to be incurred on the project, during the previo....
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....red to and relied upon by the parties during the course of arguments shall alone be treated as part of the record of the Tribunal." 5. Accordingly we would consider only such documents and papers, from the paper books, which are referred to and relied upon by the parties, as part of the record. All other papers in this voluminous paper books which are not referred to and relied upon by the parties, do not form part of the record of the Tribunal. 6. Mr. Sanjiv Shah submitted that the Commissioner of Income-tax issued a notice under section 263 of the Act which is at page 642 of the assessee's paper book and that in this show-cause notice, the only issue raised was allowability of the claim for provision for construction expenditure. He submitted that the assessee had given a detailed reply which is at pages 643 to 666 of the paper book. He submitted that the order expands the scope of the show-cause notice issued under section 263 which is dated January 4, 2010. He submitted that in the show-cause notice there is no reference to the allegation that the Assessing Officer failed to take cognizance of the delay in filing of the return or on the issue that the Assessing Officer did no....
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....He further submitted that the assessee follows the project completion method and this was approved by the Supreme Court in the case of CIT v. Bilahari Investment (P.) Ltd. [2008] 299 ITR 1/168 Taxman 95. 12. He referred to the assessment proceedings and pointed out to page 125 in the assessee's paper book which is a letter dated September 18, 2008, wherein details were furnished. He took us through the various pages and submitted that the Commissioner of Income-tax is wrong in saying that the Assessing Officer has not examined this issue. He submitted that all the details were furnished before the Assessing Officer and they were examined. On the delay in filing of the return of income, he submitted that the due date was November 30, 2006 and as the assessee could not pay self assessment tax, the return was finally filed on February 29, 2008. He submitted that this is not a good ground for revision. 13. The learned Departmental representative, Mr. S. K. Pahwa, on the other hand, submitted that the Assessing Officer has clearly in this case, sought all the details that were required, so as to prevent the Commissioner of Income-tax from revising an order under section 263. He took t....
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....(5) Details and ledger account copy of 'sale of units' of Rs. 18,17,11,125 credited to the profit and loss account ; (6) Quantitative and monetary details of 'stock of unsold units' as on March 31, 2006 ; (7) Details and ledger account copies of 'sundry debtors' of Rs. 1,77,79,041, 'loans given to parties' of Rs. 2,04,95,995, and 'advances recoverable in cash or kind' of Rs. 97,63,741 shown under current assets, loans and advances ; (8) Details and ledger account copies of 'sundry creditors for expenses' of Rs. 2,76,98,801, and 'other liabilities' of Rs. 45,68,416 shown under current assets, loans and advances ;... (11) Log book and call register maintained for personal and business use of car and telephone from the inception of the project to its completion; (12) Copies of TDS returns filed, along with all their enclosures, year wise from the inception of the project to its completion ; (13) Ledger account copies of parties, year-wise, in respect of whom TDS has been deducted by you under various heads, from the inception of the project to its completion. (14) Copies of bills/invoices in support of addition to fixed assets mad....
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....aims of the assessee. When such an exercise has been done, the conclusion drawn by the Assessing Officer, cannot be said to be erroneous. 20. The assessee-firm vide letter dated October 7, 2008 submitted complete details of sales of plot, closing stock of units of the construction project known as "Sangeeta" along with various supporting evidence. Similarly, quantitative details of direct and indirect expenses were even given vide letter dated October 2, 2008. A note explaining the provisions for construction expenses along with the details of the provisions were furnished. The note reads as under : (1) The construction project at Yari Road, Versova, has been subsequently sold as on March 31, 2006. Out of the total units of 41,897/17 sq.ft. units admeasuring 40083/57 sq.ft., have been sold and sales is reflected in the profit and loss account. (a) As on March 31, 2006 the construction project was not 100 per cent. completed. As the sales have been accounted and the related expenses for construction of project is required to be accounted applying the principle of "matching cost with revenue" the expenses incurred for completion of project after March 31, 2006 ti....