TaxTMI 
TaxTMI 
2022 (3) TMI 843
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....es of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 28,34,206/- on account of unexplained creditors. 5. On facts and circumstances of the case, the CIT(A) has erred in deleting the addition on the basis of additional evidences without making them available to the A.O. for their comments." 3. Briefly stated, the facts of the case are that the assessee has undertaken construction of the mall cum office complex in the name and style as Global Foyer at Sector -43, Gurgaon, Haryana. 4. During the course of scrutiny assessment proceedings, the assessee was asked to furnish details of sundry creditors. The assessee furnished required details and on perusal of the same, the Assessing Officer found that no confirmation has been filed in respect of M/s Service First Aircon P. Ltd and Pradhan Plumbing Systems. Proceeding further, the Assessing Officer found that in earlier Assessment Years i.e. 2007-08 to 2010-11, the Assessing Officer had made addition on account of reworking of the profit on sale recognized following percentage completion method instead of the method adopted by the assessee i.e recognizing at the time of possession is given to the custome....
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....rity on prescribing accounting standards, had prescribed accounting standard AS-7 in 1983 for accounting of income in respect of real estate projects and in terms of AS-7, which was applicable to both contractor and real estate developer, a person was free to follow either of project completion method or percentage completion method depending upon the nature of project; * Accounting Standards 7 (AS7) issued by the Institute of Chartered Accountants of India also recognize the position that in the case of construction contracts, the assessee can follow either the project completion method or the percentage completion method; * in accordance with the provisions of section 145 of the Act the business income which is assessable under the Income Tax Act is to be computed in accordance with the consistent system of accounting followed by the assessee unless such system, of accounting is defective and / or from such system of accounting, profit cannot be deduced, and that the option for choosing the system of account is with the assessee and not with the AO provided the system chosen by the assessee is consistently followed by him and such system is not a defective syste....
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....lowed by the appellant, therefore, could not be faulted with by the revenue authorities and on that basis it is neither correct nor justified to say that the accounts did not present correct and complete picture of its profits; * Revenue cannot thrust a method of accounting on the assessee though that method is superior and therefore, substitution of method of accounting is not allowed unless, lops of revenue is made out of the project of the assessee. 3.2.3 The AO has follow the assessments made in the earlier AYs 2007-08 to 2010-11 and based on an erroneous interpretation and understanding of the Guidance Note 2006 of the Council of the Institute of Chartered Accountants of India, as has been succinctly explained by the appellant's AR in his submissions, concluded that the profits of the appellant company is to be computed in accordance with PCM, and adopting the statement of account submitted by the appellant for the FYs 2007-08 to 2011-12 assessed the profits at Rs. 8,62,95,509/-. The total profit for the entire project completed between FY 2007-08 to FY 2011-12 has been considered at Rs. 28.55 crore being the difference of total advances received up to FY 201....
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....ent Years were framed u/s 153C of the Act and the assessee had challenged the very assumption of jurisdiction u/s 153C of the Act which has been decided in favour of the assessee by the CIT(A)/ITAT/High Court. Since the assessment order itself was quashed, there was no occasion to consider the merits of the case. Therefore, it cannot be said that the assessee has accepted the view of the Assessing Officer. 5. We have given thoughtful consideration to the rival submissions. It is true that earlier assessments were framed u/s 153C of the Act which ware quashed by the appellate authorities. Therefore, we find force in the contention of the ld. counsel for the assessee that there was no occasion to dwell into the merits of the case. 6. The factual matrix clearly shows that the assessee has followed a well recognized method of accounting following a notified accounting standard u/s 145 of the Act. We, therefore, do not find any error or infirmity in the findings of the ld. CIT(A) mentioned elsewhere. Ground Nos. 2 and 3 are accordingly dismissed. 7. Ground No. 4 relates to the addition of Rs. 28,34,206/- on account of unexplained creditors. 8. The Assessing Officer has made ....