AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 440
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....f Rs. 1,46,25,071 made by the A.O. being the unaccounted sales proceeds received in cash. 3.1 The Learned CIT(Appeals) ignored the findings recorded by A.O. and also the fact that the provisions of Sec.50C are neither applicable in the case of assessee nor has been invoked by the A.O. 4. The appellant craves leaves to add, to alter or amend any grounds of the appeal raised above at the time of the hearing". 3. The facts as evident from the record are that the assessee company is engaged in the business of real estate Developer / Builder, trading in cloth items and also running a multiplex by the name of M4U at Ghaziabad. The assessee is owner of a commercial plot at Ghaziabad having acquired the same from Ghaziabad Development Authority in 1981 and the construction of office-cum-residential flats and multiplex cinema has been done by the assessee on this plot from 1987 onwards and the office / residential flats are sold as and when the same is ready and the construction is still under progress. The assessee is occupying a part of this complex for running its multiplex business and the other parts of this complex have been constructed and sold by the assessee to various parties a....
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....n the registered sale deeds and also confirmed by the purchasers before the Assessing Officer. As regards the percentage completion method, it was contended by the assessee that the same was not notified by the Central Govt. u/s 145(2) of the Act, and therefore there was no valid basis to say that the same was mandatory on the assessee for computation of its income. It was further contended that the method of accounting of income followed by the assessee in the instant year was consistently followed by the assessee in all the earlier years as well as succeeding years and the same method stood duly accepted in all the preceeding and succeeding years and therefore also there was no valid basis to change the method only during the instant year. The assessee further contended before the CIT (Appeals) that the Assessing Officer ought to have accepted the method of accounting of income consistently followed by the assessee and accepted by the Department u/s 143(3) of the Act. The learned CIT(Appeals) vide his order dated 9.12.10 has accepted the contentions of the assessee and has deleted both the additions of Rs. 1,46,25,071/- as well as Rs. 7,10,94,646/- by holding that neither the A.O....
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....45(2) of the Income Tax Act and therefore there was no requirement on the assessee to follow the percentage of completion method as against the method of accounting of income consistently followed by the assessee in all the earlier years as well as succeeding years, namely to account for the sales in the year when possession was handed over and registered sale deed was executed in favour of the buyer. The learned A.R. further contended that such method of accounting stood duly accepted in the case of the assessee in all the earlier years and succeeding years when assessments were framed u/s 143(3) of the Act. The learned A.R. filed the copies of the assessment orders passed u/s 143(3) for assessment year 1998- 99, assessment year 2009-10, assessment year 2010-11 as well as assessment year 2011-12 when same method of accounting followed by the assessee was duly accepted by the Revenue. It was contended by him that the learned CIT (Appeals) had correctly deleted the addition made by the Assessing Officer by arbitrarily applying the percentage of completion method as against the method of accounting consistently applied by the assessee. The learned A.R. further relied on the judgement....
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....e has not been able to bring any such material on record on the basis of which it could be said that the assessee has actually received any amount of sales proceeds over and above the amount declared by it in the registered sale deeds and its books of accounts and therefore we do not find any infirmity in the order of the learned CIT(Appeals) in deleting the addition of Rs. 1,46,25,071/-. This view of ours is also in conformity with the judgment of Hon'ble Delhi High Court relied upon by the Learned AR in the case of CIT vs. Discovery Holdings Pvt. Ltd. in 356 ITR 159 (Del.). The order of the CIT(Appeals) on this issue is upheld and the Revenue's appeal on this ground is dismissed. 8. After considering the arguments of both the sides and the facts of the case in relation to the addition of Rs. 7,10,94,646/-, we do not find any infirmity in the order of the learned CIT(Appeals). The fact that the assessee has consistently followed the same method of accounting of income in all the earlier years as well as the succeeding years, has not been disputed by the Revenue. Thus the facts remains that the assessee has always been accounting for the sale proceeds of the portions sold by i....