TaxTMI 
TaxTMI 
2015 (3) TMI 847
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....practices of the assessee for the relevant year. 3. The facts briefly are that assessee carries on business as a colonizer and real estate developer. It developed a colony known as „Malibu Town' in Gurgaon. Its return for the Assessment Year 2007-2008 is Rs. 1,61,88,518/-. The Assessing Officer (AO) however determined the taxable income at Rs. 2,05,11,315/- after having added Rs. 34,20,797/- as deemed sales in respect of 22 specific properties. The AO felt that the appropriate method of accounting for revenue recognition was AS-7 supported by the Institute of Chartered Accountant. This standard recognises the percentage completion method which has to be followed by all developers. The AO recomputed the income by treating advances aga....
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.... to the decision of the Hon'ble Apex Court in the case of CIT vs. Excel Industries in Civil Appal No. 125 of 2013 vide order dated 8.10.2013. In this case the Hon'ble Apex Court has inter-alia held that when in earlier asstt. Years the revenue accepted the order of the tribunal in favour of the assessee, then Revenue cannot be allowed to flip flop on the issue and it ought let the matter rest rather than spend the tax payers money in pursuing litigation for the sake of it. Hon'ble Court has further expounded that in the subsequent accounting year, assessee has disclosed the income and paid tax thereon and if the rate of tax remained the same in the present asstt. year as well as in the subsequent asstt. year, the dispute raised by the Reven....
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.... 1(SC). There, the Supreme Court noticed the difference between the project completion method and the percentage completion method, and commented that both can achieve the same result. 8. This Court in Manish Build Well Pvt. Ltd. (supra) held as follows:- "9 After the above judgments of the Supreme Court it cannot be said that the project completion method followed by the assessee would result in deferment of the payment of the taxes which are to be assessed annually under the Income Tax Act. Accounting Standards 7 (AS7) issued by the Institute of Charted Accountants of India also recognize the position that in the case of construction contracts, the assessee can follow either the project completion method or the percentage completion met....