TaxTMI 
TaxTMI 
2013 (2) TMI 403
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Whether on the facts and in the circumstances of the case the Tribunal was right in rejecting the method of valuation of work in progress adopted by the appellant which was based upon the Accounting Standard No.7 (AS-7) laid down by the Institute of Chartered Accountants of India as per which the profits of the appellant could be correctly computed and which was regularly followed by the appellant in subsequent years ? (ii) Whether on the facts and in the circumstances of the case, the decision of the Hon'ble Supreme Court in the case of CIT Vs. British Paints India Ltd. ought to have been brought to the notice of Counsel appearing on behalf of the appellant by the Hon'ble Tribunal before placing reliance on the same as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tem in all subsequent years. According to the appellant, since in the year ended on 31/03/1995, the Company did not sell any flat, it had included all the direct and indirect costs in respect of the project 'Radha Enclave' and these costs therefore, included under the head 'work-in-progress'. 4. The appellant filed its return declaring total income of Rs.2,550/-. DCIT, Circle 2, Margao by its assessment order dated 13/10/1998 assessed the total income at Rs.39,82,980/- and while doing so, the Assessment Officer made addition of sum of Rs.17,88,824/- since according to the Assessment Officer, the appellant had undervalued its profits by changing method of valuation of work in progress. 5. Being aggrieved by the said order, the appellant fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... fidely and honestly on account of peculiar facts and circumstances of the case arisen and there was no intention to evade the duty since even otherwise, the appellant would have been entitled to carry forward loss to the extent of Rs.17,88,824/-. He also invited our attention to the judgment of Calcutta High Court in the case of Hela Holdings Pvt. Ltd Vs. Commissioner of Income Tax and another reported in 2003 Vol. 263 ITR 129 wherein the Calcutta High Court had after referring to the provisions of Section 145 had held that the change of method of accounting was permissible and it was open for the assessee to produce the records and show that it has followed the said accounting system in subsequent years. It is submitted that the case on w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urt. 9. On the other hand, learned Counsel appearing on behalf of the respondents submitted that the Assessment Officer had held that change in the method of accounting system was not bona fide and it was done to avoid tax and this finding of fact was confirmed by ITAT and the appeal filed by revenue is allowed and the order passed by the Assessment Officer was confirmed. She invited our attention to the judgment of Calcutta High Court in the case of K. K. Jalan (HUF) V. Commissioner of Income-tax reported in (1993)71 TAXMAN 248 (CALCUTTA) in which it was held that findings of fact not being assailed as perverse, the want of bona fides being proved fact, the order passed by the ITAT on the basis of finding of fact could not be set aside. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... question of fact and as such, it cannot be said that ITAT had given any finding against the appellant on the question of bona fides of the appellant or had set aside the finding which was recorded by the Commissioner of Income Tax (Appeals). The submission made by learned Counsel appearing on behalf of the respondents that this finding was confirmed by ITAT cannot be accepted. Learned Commissioner of Income Tax has rightly observed that since there was no sale of flats in the earlier assessment year, the appellant could have shown the said expenditure which was incurred, as loss and could have carried forward the loss in the next year. Secondly, it is admitted position that in the subsequent years, the appellant has been following AS-7 acc....