Real Estate Developers Can Follow AS-9 Instead of Percentage Completion Method Under Section 43CB

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The ITAT ruled in favor of the assessee real estate developer, rejecting the Revenue's attempt to apply the Percentage Completion Method under Section 43CB. The Tribunal held that real estate developers appropriately follow AS-9 for revenue recognition, recognizing revenue only upon execution of conveyance deeds and transfer of possession. The ITAT distinguished between contractors (who provide construction services to clients) and developers (who build and sell property at their own risk), finding that the assessee's business model involved selling completed units rather than entering into construction contracts. The Tribunal also upheld the principle of consistency, noting the Revenue had accepted the same accounting method in previous assessment years with no material change in circumstances.....