TaxTMI 
TaxTMI 
2024 (3) TMI 617
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....mpany is a promoter and builder constructing a residential group housing project namely Devika Gold Homz in Greater Noida during the year under consideration. The ld AO observed that the assessee had incurred substantial expenses on construction but the revenue had not been recognized on the basis of percentage of completion method. Accordingly, the ld AO sought for complete details of the project, details of agreement entered into till 31.03.2014 customer wise together with amounts received thereon. The entire details called for by the AO were furnished by the assessee. The ld AO observed that the assessee has shown total saleable area of 1173937 sq. ft. in this year and 662925 sq. ft. in subsequent years for the said housing project. The assessee explained that originally the entire project consisted of construction of 10 towers but since the market continuously was not good, the project was restricted to 6 towers in FY 2014-15 and therefore, the total saleable area was reduced to 662925 sq. ft. in subsequent years as against 1173937 sq ft which was proposed originally. It was contended that keeping in view the total saleable area 1173937 sq ft in this year, the percentage of con....
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....led Total Sales Declared so far 1491593046 Sale Executed - (Flats Booked/ 1512392835 %age of Sales already declared 98.62% Remaining Revenue to be declared at the time of completion of Project 5. The assessee also placed reliance on the decision of the Hon'ble Supreme Court in the case of Excel Industries Ltd reported in 358 ITR 295(SC) wherein, it was held that if the income has already been taxed in the subsequent years, revenue has not been deprived of any tax and the rate of tax in both the years is same then the addition made by the ld AO deserves to be deleted as the entire adjudication of the issue becomes academic in nature. The assessee also placed reliance on the decision Hon'ble Jurisdictional High Court in the case CIT Vs. Shri Ram Piston reported in 220 CTR 404 (Del) in support of its contentions and another decision in the case of CIT Vs. Vishnu Industrial Pvt. Ltd in ITA No. 229/1998 dated 06.05.2008 of Hon'ble Jurisdictional High Court. The assessee also pointed out calculation error in the percentage of completion arrived by the ld AO @58.49% as against the correct percentage of 43.26% even if the total saleable area is considered at 662....
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....dy shown 98.62% of the total revenue in the ITRs filed for AY 2015-16 to 2019-20 and the balance revenue is likely to be declared at the time of completion of the project consisting of six towers and in case revenue is recognized in the current year as contended by the AO, the total revenue already declared would exceed the total projected revenue and actual sale consideration by 43.97% i.e. the total revenue declared in the ITRs filed for AYs upto 2019-20 would be 143.97% of the total actual revenue. It is also submitted by the AR that the appellant has already shown the revenue from the project in subsequent years on the basis of POCM and therefore, no addition is called for in the year under consideration. 4.3.2. Without prejudice to all the above arguments, the AR has submitted that even if POCM is applied I the case of the appellant, the AO has wrongly computed the profit as the AO has made the mistake in taking total cost of land of ten towers instead of taking proportionate cost of land corresponding to six towers. It has been submitted that if proportionate land cost is taken, the percentage of completion of the project comes to 43.26% instead of 58.49% and from the profi....
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....e will assume as correct the the finding of fact by the Assessing Officer and the Commissioner of Income Tax that the amount of Rs. 31,10,000/- pertained to the assessment year 2005-06 and not the assessment year 2007-08. On 16.1.2007, the search was conducted under Section 132 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). It is undisputed that the respondent/assessee surrendered the tax amounting to 84.20 lacs. It is also admitted that the amount was brought to tax by the department for the assessment year 2007-08. The only contention raised by the department is that the amount ought to be brought to tax for the assessment year 2005-06. 4 Even assuming that the department's contention is correct, it would make no difference in view of the judgments of the Hon'ble Supreme Court, the Bombay High Court and the Delhi High Court. 5. In Commissioner of Income-Tax, Delhi, Ajmer, Rajasthan and Madhya Bharat v. Nagri Mills Co. Ltd. (1958) ITR 681, the Bombay High Court held:- "We have often wondered why the Income-tax authorities, in a matter such as this where the deduction is obviously a permissible deduction under the Income-Tax Act, raise disputes as....
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....13) 358 ITR 295 (SC). The Hon'ble Supreme Court held:- "32. Thirdly, the real question concerning us is the year in which the assessee is required to pay tax. There is no dispute that in the subsequent accounting year, the assessee did make imports and did derive benefits under the advance licence and the duty entitlement pass book and paid tax thereon. Therefore, it is not as if the Revenue has been deprived of any tax. We are told that the rate of tax remained the same in the present assessment year as well as in the subsequent assessment year. Therefore, the dispute raised by the Revenue is entirely academic or at best may have a minor tax effect. There was, therefore, no need for the Revenue to continue with this litigation when it was quite clear that not only was it fruitless (on merits) but also that it may not have added anything much to the public coffers." 8. It was conceded that even in the present case, the rate of tax remained the same in both the assessment years i.e. 2005-06 and 2007- 08. Following the above judgment of the Hon'ble Supreme Court, it must be held that the dispute raised by the revenue is essentially academic. The issue may have some tax ef....