2020 (7) TMI 285

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....-98. The appeal was admitted by a bench of this Court by order dated 17.09.2012 on following substantial question of law: (i) Whether the tribunal was correct in holding that the assessee could adopt completed contract method of accounts without appreciating the amendment to Section 145 of the Act w.e.f. 01.04.1997 and applicable to the current assessment year? 2. Facts leading to filing of this appeal briefly stated are that assessee is a company carrying on the business of development of plots and construction of flats. Admittedly, the assessee company follows mercantile system of accounting and completed contract method of accounting for contracts. The assessee filed its return of income for assessment year 1997-98 on 27.11.1998 decla....

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....llowed. Being aggrieved, the revenue preferred an appeal. The appeal which was dismissed by the Income Tax Appellate Tribunal by an order dated 13.07.2005. 4. The aforesaid order passed by the tribunal was challenged in appeal before this court by the revenue. The said appeal viz., I.T.A.No.36/2006 was decided by a bench of this court vide order dated 23.09.2010. It was inter alia held that the assessment year pertains to 1997-98 i.e., subsequent to amendment to Section 145(1) of the act and the tribunal ought to have looked into the matter to ascertain whether the assessee could adopt completed contract method which is not contemplated under Section 145(1) of the Act as it refers to cash or mercantile system of accounting. The order of th....

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....se pertains to previous year and not the current year and therefore, the decision rendered in the case of THUMBAY HOLDINGS (P) LTD supra has no application to the fact situation of the case. It is also urged that method of accounting once adopted can be followed. In support of aforesaid submission, reference has been made to decision of this court dated 10.08.2011 in I.T.A.No.29/2006. 7. We have considered the submissions made on both the sides and have perused the record. Section 145 of the Act deals with method of accounting. Section 145(1) provides that income chargeable under the head 'profits and gains of business or profession' or 'income from other sources' shall subject to provisions of sub- Section (2) be computed ....