2015 (3) TMI 1211

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....has raised the following Grounds of Appeal :- "1. The learned CIT(A) has erred in dismissing the appeal, without appreciating the facts of the case and submissions of the appellant. 2. The learned CIT(A) has erred in confirming the addition of Rs. 1,07,48,442/- made by the A.O. on account of estimated profit on the alleged sales in the current year on the ground that appellant has completed the project and also handover the possession to the unit purchasers. 3. The learned CIT(A) ought to have appreciated that -   a) the work of the ap2p ellant was stopped by the PMC on the ground that the construction carried out by the appellant on Building A & C was illegal, b) Completion certificate from the PMC was not received till last week....

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....nding over of possession of flats to the customers. Pertinently, the aforesaid method of accounting adopted by the assessee is not in dispute. At the time of hearing, the Ld. Representative for the assessee pointed out that similar method of accounting has been accepted by the Revenue in the past.   5. In this background, the differenc3e in the stand of the assessee and the Revenue can be appreciated in the following manner. The appellant firm had three Wings, namely, A, B & C in the project, "Om Megasparsh". The development and execution of the project was in progress during the year under consideration. So far as the flats in Wing B are concerned, assessee had recognized income on the sale of such flats and it was offered for tax d....

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....s was only a temporary possession given in order to complete the furniture work, etc. and that the final possession was handed-over to the flat-holders of Wings A & C only in the month of April, 2005. It was contended that the sales with regard to the flat4s in Wings A & C were liable to be recognized in the previous year from April, 2005 to March, 2006 corresponding to the next assessment year 2006-07. It was also pointed out that assessee had obtained affidavits from such persons stating that only temporary possession of flats was taken for carrying out furniture work during the year under consideration. 7. On the other hand, the Ld. Departmental Representative appearing for the Revenue contended that the CIT(A) has appropriately dealt w....

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....emonstrate that the possession given to the customers was only a temporary possession whereas the final possession was to be given only after obtaining the completion certificate from the 'local authority', which happened in the month of April, 2005, which corresponds to the next assessment year. In our considered opinion, the case being set-up by the assessee is quite superfluous and is devoid of merit. We find that at no stage it was the case of the assessee that it is recognizing sale of flats on the basis of final handing over of possession. In-fact, there is no material on record to suggest that assessee has differentiated between a temporary possession and final possession so as to recognize income on sale of flats. Therefore, the ver....