TaxTMI 
TaxTMI 
2023 (5) TMI 706
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....ng grounds of appeal: "1. The CIT(A) erred both on facts and in law in passing the order. 2. The CIT (A) erred in law as well as on facts by deleting the penalty u/s 271(1)(c) of the I.T. Act, 1961 of Rs.1,59,55,025/- levied by the AO towards furnishing inaccurate particulars of income for not following recognization of revenue as per AS-9, as the assessee had violated the law by not following percentage of completion method (POCM) as prescribed by ICAI in AS-7. 3. For these and such other reasons as may be urged at the time of hearing, the order of the CIT(A) may be vacated and that of the Assessing Officer be restored." 4. The appellant craves, leave to add, amend, alter or delete any of the above groun....
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....ely 45% and 37% work is completed in Projects "Crossroads" and Project "Aurete" respectively. In view of these facts, please state whether corresponding revenue has been recognized. Ans: Sir, the Project "Crossroads" is being constructed by the firm Shri Raviraj Pashankar Developers and Project "Aurete" is being constructed by Raviraj Ventures. We do maintain the books of accounts of both the firms on day to day basis. On going through the tentative Profit and Loss Account of the above said firms by FY 2015-16, it is clear that no revenue has been recognized by these firms w.r.t. aforesaid projects. Q.26) It is evident from the aforesaid certificates given by the architect w.r.t. projects "Crossroad" and "Aurete" that the ....
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....he penalty, the Assessing officer has relied on the Explanation 5A and the fact that the return was revised after the search. However, as per the penalty order, the material found during the search was the certificate issued by the Architect regarding the progress of the project. There is no finding in the penalty order that the seized documents indicate that the appellant had claimed any inadmissible expenses or received any unaccounted sale receipts, etc. As per the statement recorded u/s 132(4) of the Act, the architect's certificate only indicates that the project was complete beyond the threshold limit, prescribed in the guidelines for applying the percentage completion method of accounting. Thus, the seized document only suggests that....
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....notice u/s. 153A showing the total income at Rs.4,61,02,130/-. As per explanation 5A to s.271(1)(c), the concealment is deemed. Explanation-5A is a deeming provision. Once there is a difference in the income shown in the original return filed u/s.139(1) and income shown in response to notice u/s 153A, as per explanation 5A, the concealment is deemed. Therefore, in this case, as per explanation 5A there is deemed concealment. Ld.AR submissions:- 4. Ld.AR filed paper book. Ld.AR explained that assessee was following project completion method. Therefore, assessee had shown NIL income in the original return filed u/s 139(1) of the Act. After the search, to buy peace of mind, assessee offered the income under percentage competition method.....
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....ssee had filed Original Return u/s 139(1) of the Act on 03/08/2016, declaring total Income at NIL. It is an admitted fact that assessee was following Project Completion Method. The project completion method was a recognized accounting method for the year under consideration. The assessee for the year under consideration had a choice either to follow Project Completion Method or Percentage completion method, the assessee chose Project Completion Method. During the search, architect's report was found which only explains the percentage of completion of the project. However, the assessee u/s 132(4) statement accepted to offer the income under Percentage Completion Method and accordingly offered additional income. The assessee immediately after....
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....ed contract method and percentage complete method both were recognised method of accounting for computation of gains from construction contract. Section 43CB was inserted by the Finance Act, 2018 w.e.f. 1-4-2017 which provides that profits and gains arising from a construction contract or a contract for providing services shall be determined on the basis of percentage of completion method in accordance with the income computation and disclosure standards. However, this section was not in existence and applicable in the assessment year 2014-15 which we are concerned with. Thus it is amply clear that percentage complete method and completed contract method were both acceptable method and accounting of construction contract in the impugned per....