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Income Tax Appellate Tribunal, “D” Bench, Mumbai
Before: Shri B.R. Baskaran (AM)& Ramlal Negi (JM)
O R D E R Per B.R. Baskaran (AM) :- Both the appeals filed by the assessee are directed against the orders passed by learned CIT(A)-8, Mumbai and they relate to A.Y. 2010-11 & 2011- 12.
The assessee is aggrieved by the decision of learned CIT(A) in confirming the additions made by the Assessing Officer to the total income of the assessee.
We have heard the parties and perused the record. The assessee is engaged in the business of construction and development. The assessee offered income under percentage completion method. The Assessing Officer noticed that the assessee has worked out percentage of completion by excluding cost of land. Hence the Assessing Officer recomputed the profit under ‘percentage completion method’ by including cost of land and the same has resulted in an 2 Deekay Realtors Pvt. Ltd.
addition of ` 5,98,680/- in A.Y. 2010-11 and ` 4,16,529/- in A.Y. 2011-12. Learned CIT(A) confirmed the order of the Assessing Officer and hence the assessee has filed these appeals before us.
The learned AR was asked about the method followed in other years. He submitted that in A.Y. 2009-10 and 2012-13, the assessee has accepted the workings made by the Assessing Officer. Thus, we noticed that the assessee has accepted the method adopted by the AO in other years and hence the variation made in the years under consideration to the working of “Percentage of completion” would not require any interference.
Learned AR submitted that the assessee had computed final profit upon completion of project by offsetting the income as declared by it in the returns of income of earlier years. He submitted that the income assessed by the Assessing Officer, if confirmed by the Tribunal, should be set off at the time of ascertaining final profit upon completion of the project. Accordingly, he prayed that suitable direction may be given to the Assessing Officer in this regard.
We also heard Ld D.R on the alternative plea put forth by Ld A.R. The Ld D.R did not object to the same. Having heard the rival submissions on this issue, we are of the view that there is merit in the submissions made by the assessee. Accordingly we direct the Assessing Officer to arrive at the final profit upon completion of the project by offsetting the income that has already been assessed in the earlier years.
In the result, both the appeals filed by the assessee are treated as partly allowed. Order has been pronounced in the Court on 20.7.2016