TaxTMI 
TaxTMI 
2026 (2) TMI 1361
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.... erred on law and on facts as the accounts of assessee cannot be relied and liable to be rejected on account of the following:- * The Progress of completion already exceeded 25% during preceding previous year itself as project cost incurred 33.87 Cr. against estimated project cost of 97.11 Cr. i.e. 34.87% and amount received on booking exceeded 10% while no revenue was recognized during that year thereby postponing payment of taxes. * No basis or details or certification for estimated project cost of 97.11 Cr. are on record and cannot be relied upon. 2. The Ld CIT(A) also erred on facts and on law by allowing VAT payments to Vendor as expenditure since sale of real estate before completion is liable for VAT and VA....
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....hed High Power Committee against the high-pitched assessment made by the AO. The Committee after examining facts of the case, gave its findings and recommendations holding that the AO has erred in extrapolating sales which has resulted in high pitched assessment. The CIT(A) considering recommendations of the high-power committee and books of the assessee deleted the additions made by the AO. Further, the CIT(A) held that the AO has wrongly rejected books of the assessee. Thus, the CIT(A) deleted entire addition made by the AO. Against the findings of the First Appellate Authority, the Revenue is in appeal before the Tribunal. 4. Shri Om Prakash, representing the department vehemently supporting the assessment order submitted that the CIT....
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....s of the High-Power Committee are extracted herein below:- "The A0 while passing the assessment order, recomputed the revenue on the basis of Accounting Standard -7 but ignored the main Accounting Standard AS-9 laid down for revenue recognition. The assessee explained the implications of AS 7 in its case. It was stated that the assessee may he assumed as Contractors and the flat Buyers with whom the Agreement to Sale have been executed shall be treated as Contractee. Now in order to determine the Total Contract Value, the Total of the sales value of only those flats can be considered whose agreements have been executed as only in those cases the Cohtractor-Contractee relationship has been established. Accordingly the sales value of....
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....o the remaining 30% unsold area. The CIT(A) after examining documents on record accepted that the assessee's manner of recognizing profit and accounting is in accordance with AS-7 read with AS-9. The aberration that led to the addition of more than Rs. 7 crores in case of the assessee for AY 2016-17 is on account of faulty method adopted by the AO in extrapolating sales revenue to the unsold area. Hence, the addition made by the AO was deleted by the CIT(A). The Revenue has not been able to point out any infirmity in the order of CIT(A). We find no reason to interfere with the impugned order, hence, the same is upheld. 8. Before parting with this order, we may point that the high-pitched assessment made by the AO was referred to High ....