2020 (7) TMI 285

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....e appeal pertains to Assessment year 1997-98. 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 inco....

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.... of Rs. 12,19,390/-. In the result, the appeal was allowed. 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 ca....

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....he assessee submitted that charge of tax in the instant case 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' ....

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....No.36/2006 appears to be attractive at the first blush but on careful scrutiny of the order it is evident that the tribunal has referred to the decision of this court in the case of 'CIT VS. M/S SKYTOP BUILDERS PVT. LTD., AND OTHERS' rendered in I.T.A.No.29/2006 vide order dated 10.08.2011 as well as the decision of the supreme court in BILAHARI INVESTMENTS PVT. LTD., supra and has held that the assessee was following completed contract method which was accepted by the department in the past as well and therefore, there is no justification for the assessing officer to change the same. For the aforementioned reasons the submission made on behalf of the revenue cannot be accepted. Similarly, the contention that the controversy involve....