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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ NEW DELHI
PAN No. AABCS5720R Appellant by: Smt. Rashmita Jha Sr. DR. Respondent by: Sh. Raman Chawla, CA Date of final hearing : 15.02.2016 Date of pronouncement : 24.02.2016 ORDER
Per C.M. Garg, JM
This appeal by the Revenue has been filed against the order of the Commissioner of the Income Tax (Appeals) –X, New Delhi order dated 19.08.2013 passed in First Appeal No. 51/12-13 for AY 2010-11.
We have heard arguments of both the sides and carefully perused the relevant materials placed before us on record. The Ld. assessee representative (AR) submitted copies of the order of the Hon’ble high Court of Delhi passed in assessee’s own case i.e. and 113/2014 order dated 07.01.2015 passed in appeals filed by the revenue and submitted that the orders of the ITAT for AY 2006-07 & 2007-08 and 2008- 09 & 2009-10 passed in ITA No. 4572/Delhi/2009 & 2813/Delhi/2010 and ITA No. 478/Delhi/2013 & 480/Delhi/2013 has been upheld by the Hon’ble High Court therefore the issue is squarely covered in favour of the assessee by the said order of Hon’ble high Court as well coordinate benches of the Tribunal in assessee’s own cases wherein similar issue has been decided in favour of the assessee and against the revenue. The Ld AR. Also placed copies of the orders of Hon’ble High Court and the Tribunal.
The Ld. DR strongly supported the action of the AO and submitted that the AO was quite correct in rejecting the method of accounting adopted by the assessee for revenue reorganization and applying the percentage completion method (PCM). However, she could not assist us whether the orders of the Tribunal and Hon’ble High Court have been modified or dismissed by any higher forum.
On careful consideration of above submission of both the sides at the outset we note that the Hon’ble Jurisdictional High Court of Delhi in the order dated 07.01.2015 in assesseee’s own case dismissing the appeal of the assessee has upheld orders of the tribunal dated 20.04.2012 for AY 2006-07 & 2007-08 (Supra) and dated 31.07.2013 for AY 2008-09 & 2009-10. The relevant operative part of the order of Hon’ble High Court is being respectfully reproduced as follows: “The Revenue claims to be aggrieved by a common order of the Income Tax Appellate Tribunal (ITAT) passed in ITA478/DEL/2013 and ITA 480/DEL/2013 dated 31.07.2013. These cover AY 2008-09 and 2009-10. The question of law sought to be urged is whether the ITAT was correct in upholding the findings of the CIT(A) that Accounting Standard (AS-9) which sanctions the project completion method, was correctly applicable in the circumstances of the cases. The brief facts are that the assessee in engaged in real estate development and derives its income from actual sale and transfer of property. For this purpose, it purchases land-including built up property-which it subsequently demolishes and develops in the layout township and after which the residential units are sold. In all previous years, the assessee had adopted AS-9, i.e. the project completion method whereby the consideration received on actual sales was shown in its books and claimed as income. Apparently, in a previous detailed order, the ITAT sanctioned this method and held it to be applicable to the business of the assessee, for AY 2006-07 and 2007-08. The CIT(A) had, for the years in question in these appeals, considered the decision of the ITAT for those years (ITA Nos. 4572/Del/09 and 2813/Del/2010 dated 20.04.2012. in the said decision of the ITAT, the previous judgment of this Court in CIT Vs. Manish Buildwell Pvt. Ltd. (ITA 928/2011) decided on 15.11.2011, was relied upon. Likewise, the Supreme Court ruling in CIT Vs. Belahari Investments Pvt.Ltd. (2008) 299 ITR1, to this effect –which discussed both the percentage completion and the project completion methods, and noted its difference were considered. In Manish Buildwell (Supra) it was held that it cannot be said that project completion method would result in deferment in payment of taxes which are to be assessed annually. The ITAT in these circumstances held-in relation to the assessee/respondent- that the adoption of the project completion method is an established method of accounting. In these circumstances, without there being any rationale or new development, the Revenue could not have concluded that the project completion method was not appropriate for the assessee. Consequently, it is held that no substantial question of law arises for consideration. The appeals are accordingly dismissed.”
In view of above we are incline to hold that the Hon’ble High Court has upheld that conclusion of the ITAT that the adoption of PCM is in establish method of accounting and without there being any rationale or new development in the fact and circumstances of the case as well as without bringing out any defect on record in the accounting procedure adopted by the assessee, the revenue could not have concluded that the project completion method was not appropriate for the assessee. Hence, order of Hon’ble High Court is also applicable in favour of the assessee to the present case pertaining to AY 2010-11 and accordingly sole ground of the revenue being devoid of merits is dismissed in the result appeal of the revenue is dismissed.