TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 1205
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....llowing question of law was arisen for consideration: "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in rejecting the project Completion Method which was followed consistently by the assessee and instead applying workinprogress method and taxing 80% thereon as net profit?" 3. Learned Counsel for the appellant has contended that the Tribunal has erred in rejecting the Project Completion Method which has been consistently followed by the assessee and instead taxing the net profit as 8% on the further construction done during the year. 3.1 Learned Counsel has further contended that the tribunal has not appreciated the fact that Project Completion Method is a well known and well accepted method of ....
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....e, the assessee was entitled to claim the entire income on completion of the project and if such accounting standard was accepted by the revenue in the earlier years, in the present year, the Assessing Officer could not have taken a different stand and that too, without hearing the assessee." 3.4 Attention of this Court was also invited to a decision of this Court in case of Commissioner of IncometaxV v. Umang Hiralal Thakkar [2014] 42 taxmann.com 194 and placed reliance upon the following paragraphs: "4.2. From the perusal of the order passed by the learned CIT(A) while deleting the addition of Rs. 1,66,70,811/- , it appears that in para 10.4 and 10.5, learned CIT (A) has observed as under: "10.4.In the present case, it is not the Ass....
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.... rejection should be based on cogent evidence and should be done with caution. 10.5.In the present case, the appellant has declared substantial profits on the basis of project completion method in the subsequent years. In construction, the project completion method and percentage completion methods, both have also been recognized by the CBDT in the instruction No.4 of 2009 dated 30.9.2009. Therefore, the Assessing Officer is not considered justified in bringing to tax the profit of Rs. 1,66,70,811/- in the year under consideration, particularly when such profits have already been offered to tax by the appellant in the AY 200708. The addition of Rs. 1,66,70,811/- are directed to be deleted." 4.3. It is also required to be noted that while p....
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.... followed by him and such system is not a defective system. In our considered view, provisions of AS7 cannot override the provisions of Section 145Jn so far as the computation of business income under the Income Tax Act for the purpose of determining income is concerned. In the instant case, we find that the Ld.A.O has brought no material on record to show that the system of accounting adopted by the assessee for the year under appeal was not consistently followed by the assessee or the system adopted was a defective system. In our considered view, even a project completion method is also a recognized system of accounting. Simply the Institute of Chartered Accountants of India has recommended percentage completion method does not mean that ....
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....ge completion method followed by assessee. No question of law much less any substantial question of law arise in the present appeal. Hence, present appeal deserves to be dismissed and is accordingly dismissed." 3.5 After making aforesaid submissions, learned Counsel for the assessee has contended that the issue raised in this appeal may be answered in favour of the assessee - appellant. 4. On the other hand, learned Counsel for the department has contended that the order passed by the tribunal is just and proper and this Court may not interfere with the same since the tribunal has considered the relevant material placed before it. He has also contended that the AO has gone into the details and thereafter observed in paragraph No.16 which ....