July 2019

Section 145 The project completion method is one of the recognised methods of accounting and as the assessee has consistently been following such recognised method of accounting, in the absence of any prohibition or restriction under the Act for doing so, the CIT(A) is correct in holding that the AOs assertion that the project completion method is not a legal method of computation of income is not supported by facts and judicial precedents

Jagdish D. Shah | Jagdish T. Punjabi
Chartered Accountants

9 ITO vs. Shanti Constructions (Agra) Members: Sudhanshu Srivastava (JM) and Dr. Mitha Lal Meena (AM) ITA No. 289/Agra/2017 A.Y.: 2012-13 Date of order: 16thMay, 2019 Counsel for Revenue / Assessee: Sunil Bajpai / Pradeep K. Sahgal and Utsav Sahgal

 

Section 145 The project completion method is one of the recognised methods of accounting and as the assessee has consistently been following such recognised method of accounting, in the absence of any prohibition or restriction under the Act for doing so, the CIT(A) is correct in holding that the AOs assertion that the project completion method is not a legal method of computation of income is not supported by facts and judicial precedents

 

FACTS

The assessee, a partnership firm engaged in the business of real estate and construction of buildings for the past several years, filed its return of income declaring therein a total income of Rs. 1,12,120. The AO completed the assessment u/s. 143(3) of the Act, assessing the total income of the assessee to be Rs. 3,94,62,580. While assessing the total income of the assessee, the AO rejected the books of accounts on the ground that the assessee did not produce bills / vouchers before him for ascertaining

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