M.S. BUILDERS,MORADABAD vs. ITO WARD-1(1), MORADABAD

ITA 616/DEL/2025Status: DisposedITAT Delhi16 January 2026AY 2018-191 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO's action of treating entire finished goods as sales was incorrect. The assessee followed the 'Project Completion Method' for revenue recognition, and sales are booked upon execution of sale deeds and physical possession. The advances received should not be taxed as income until the sale is concluded.

What were the facts?

The assessee, engaged in real estate business, filed its return for AY 2018-19. The Assessing Officer (AO) assessed income at INR 2,36,30,393/- after treating advances received for flat bookings as sales. The CIT(A) partly allowed the appeal, confirming an addition of Rs. 2,13,49,415/-.

What were the issues?

Whether advances received for property bookings can be treated as sales and taxed in the year of receipt, when the assessee follows the 'Project Completion Method' for revenue recognition?

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 143(2),Section 142(1),Section 145,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI B BENCH: NEW DELHI

Before: SHRI YOGESH KUMAR U.S & SHRI MANISH AGARWAL

For Appellant: Shri Mayank Patawari, Adv. &, Shri Akash Ojha, Adv
For Respondent: Shri Rajesh Kumar Dhanesta, Sr.DR
Hearing: 17.11.2025Pronounced: 16.01.2026

The present appeal is filed by the assessee against the order dated 20.12.2024 by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld. CIT(A)”] in Appeal No. NFAC/2017-18/10041203 assessed u/s 250 of the Income Tax Act, 1961 ["the Act"] arising out of the assessment order dated 19.04.2021 passed u/s 143(3) r.w.s. 144B of the Act pertaining to Assessment Year 2018-19. 2. Brief facts of the case are that assessee company is engaged in the business of construction of housing Estates, Apartments, shopping Centers, industrial building, offices, colonies, clubs, cinemas, de

The order continues below.

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