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“percentage completion method”

ICDS & AccountingICDS IIIICDS III467 judgments

The decision most relied on for percentage completion method is CIT v. Bilahari Investment (P) Ltd. (299 ITR 1), cited in 206 judgments on BharatTax.

Leading authorities on percentage completion method

CIT v. Bilahari Investment (P) Ltd.
299 ITR 1 · 2008 · Supreme Court
206
citing judgments

The project completion method and the percentage of completion method are both recognized methods for recognizing income from real estate contracts.

CIT v. Hyundai Heavy Industries Co. Ltd.
291 ITR 482 · 2007 · Supreme Court
166
citing judgments

The Supreme Court held that the 'project completion method' and the 'percentage of completion method' are recognized accounting methods for ascertaining profit for contracts. The case affirms these methods in the context of contract accounts.

CIT v. ARUN EXCELLO FOUNDATIONS (P) LTD.
212 Taxmann 342 · 2013 · High Court
35
citing judgments

Accounting Standard 7 is not applicable to real estate developers, and therefore, the percentage of completion method cannot be imposed on them. Assessees are justified in following the project completion method as per Accounting Standard 9.

Prestige Estate Projects (P) Ltd. v. DCIT
33 DTR 514 · 2010 · ITAT
28
citing judgments

A real estate developer adopting the completed contract method of accounting cannot be forced to follow the percentage completion method under AS-7 if AS-7 has not been specified by the Central Government under section 145(2). The Assessing Officer cannot reject accounts under section 145(3) solely on this ground.

CIT v. Associated Cables P. Ltd.
286 ITR 596 · 2006 · High Court
25
citing judgments

Retention money withheld by a contractee is not taxable in the year it is retained, but only in the year the obligations under the contract are fulfilled and the amount becomes due to the assessee.

Mazagaon Dock Limited v. JCIT
29 SOT 356 · 2009 · ITAT
25
citing judgments

Anticipated or foreseeable losses on fixed-price construction contracts are deductible in the year the loss is foreseen, aligning with accounting standards like AS-7. This approach is supported by decisions allowing deduction of foreseeable losses based on technical estimation.

Wall Construction Co Ltd. v. JCIT
102 TTJ 505 · 2006 · ITAT
21
citing judgments

Interest expenditure on borrowed funds used for stock-in-trade is allowable as a deduction in the year the revenue is offered to tax, even when following the percentage completion method for recognizing revenue.

CIT v. Aditya Builders
378 ITR 75 · 2015 · High Court
21
citing judgments

The appropriate method of accounting to correctly reflect a true financial statement is a matter of opinion and debate, which is not amenable to revisional jurisdiction under Section 263 of the Act. The Assessing Officer cannot change the method of revenue recognition to the percentage completion method if the assessee has consistently followed the project completion method.

Judgments citing percentage completion method

DCIT, Central Circle 1(1) Ahmedabad, Ahmedabad vs. Navratna Organisers and Developers Private Limited, Ahmedabad

In the result the appeal filed by the Revenue is hereby dismissed

ITA 895/AHD/2024[2007-08]Status: DisposedITAT Ahmedabad06 Dec 2024AY 2007-08

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 143(3)

executed between various entities. The Assessing Officer has not accepted the method of assessee and held that the income was not recognised on percentage completion method. The AO considered the assessee as owner of the project and concluded that income of Rs.4,00,00,000/- offered to tax in respect

Asstt.Commissioner of Income Tax Circle-5, Nagpur vs. The Nirmal Ujwal Credit Co-Op Society Ltd, Nagpur

In the result, appeal filed by the Revenue for the assessment year

ITA 390/NAG/2019[2012-13]Status: HeardITAT Nagpur27 Nov 2024AY 2012-13

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Manoj G. MoryaniFor Respondent: Shri Vikash Agrawal
Section 139(1)Section 143(1)Section 143(2)Section 80PSection 80P(2)

construction completion method in accounting and by mistake it was mentioned by the auditor of assessee society in the audit report issued. The percentage completion method as mentioned in AS-7 is applicable to contractors and assessee society is not a contractor. Therefore, as no sale deed is executed during ... view that the assessee ought to have offered for taxation the profit on the housing project on the percentage of percentage completion method. The Assessing Officer, accordingly drew reference from the provisions of section 44AD of the Act and estimated income @8% on work in progress reported by the assessee

Tpl- Sucg Consortium, Hyderabad vs. Income Tax Officer, Circle 6(3), Hyderabad

In the result, the appeal of assessee is allowed

ITA 753/HYD/2024[2018-19]Status: DisposedITAT Hyderabad14 Nov 2024AY 2018-19

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon’Ble

For Appellant: Shri Malay Kalavadia, C.AFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 142(1)Section 143(2)Section 80Section 80I

treated while computing the profit and gains arising from the construction contract. Section 43CB(2)(i) clearly provides that for the purposes of percentage completion method, the project completion method or straight-line method, the contract revenue shall include retention money. In view of the clear provision

Income Tax Officer, Ward-3(3)(1), Ahmedabad vs. Aman Enterprise, Ahmedabad

In the result, the appeal of the Revenue is dismissed

ITA 1370/AHD/2024[2018-19]Status: DisposedITAT Ahmedabad08 Nov 2024AY 2018-19

Bench: Shri T.R. Senthil Kumar & Shri Narendra Prasad Sinha

For Appellant: Shri Deepak Shah, A.RFor Respondent: Date of Hearing
Section 143(3)

under the respective laws with due taxes paid. With regards to taxation of this advance amount, the appellant stated that it had followed percentage completion method and accounted for this amount as liability in the balance sheet. Once the sales of flats were executed, the income was accounted ... rather than examining whether the income was correctly reported in ITA Nos. 1370/Ahd/2024 (ITO vs. Aman Enterprise)A.Y.– 2018-19- 6 – accordance with percentage completion method, had erroneously held the entire booking advance receipt as income of the assessee, which can’t be held as correct. The Revenue

Supreme High Spaces LLP, Mumbai vs. Nafac, Delhi

The Appeals are dismissed

ITA 4431/MUM/2023[2018-19]Status: DisposedITAT Mumbai07 Nov 2024AY 2018-19

Bench: Shri Narender Kumar Choudhry

Section 145(1)Section 14ASection 250

claimed that during the AY under consideration, it was carrying on the real estate development project namely “Amadore” and has been following the percentage completion method. The Assessee during the AY under consideration could not secure at least 25% of the saleable project area by contracts or agreements with ... project “Amadore” was completed in F.Y. 2017-18. Therefore, revenue is to be recognized in F.Y. 2017-18 as per percentage completion method as prescribed in Ind. AS-09 r.w.s. 145 of the Act. And therefore considering the facts that sufficient advances were received against project Amadore and cost incurred

Deputy Commissioner of Income Tax, Circle-1, Thane, Ashar It Part, Wagle Industrial Estate, Thane West vs. Ashirwad Enterprises, Makhamali Talao, Thane

Appeal is dismissed

ITA 2134/MUM/2024[2016-17]Status: DisposedITAT Mumbai06 Nov 2024AY 2016-17

Bench: Shri Amit Shukla & Smt. Renu Jauhrideputy Commissioner Of V/S. Ashirwad Enterprises, Income Tax, Circle -1, बनाम 302/3Rd Floor / Rajshree Ashar It Part, Wagle Plaza, Noori Baba Road, Industrial Estate, Thane Lbs Marg, Makhmali Talao West Thane 400602,Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aanfa8929M Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Sanjiv Brahme & Shri Jayant BhattFor Respondent: Shri Ajay Chandra (CIT - DR)
Section 250

Ashirwad Enterprises, Thane the year under consideration. It was held by the Ld. AO that the income recognized on the basis of Percentage Completion Method works out to Rs. 18,70,28,374/-, whereas, the assessee has recognized income only to the extent of Rs. 5,06,50,406/-. Accordingly ... Thane 6. We have heard the rival submissions and perused the material before us. Ld. AR has reiterated that the assessee has applied Percentage Completion Method consistently and the same cannot be disturbed at this stage. The department has also accepted the assessee’s computation for earlier as well

Vidhi Realtors, Mumbai vs. National Faceless Assessment Centre, Delhi

In the result, the cross appeals are treated as allowed for statistical purposes

ITA 1385/MUM/2024[2018-19]Status: DisposedITAT Mumbai28 Oct 2024AY 2018-19

Bench: Shri B.R. Baskaran & Shri Anikesh Banerjee

For Appellant: Shri Akshay JainFor Respondent: Shri Ashish Kumar, Sr.DR
Section 44A

Ld.CIT(A)‟] and it relates to AY. 2018-19. 2. The Ld.AR submitted that the assessee is a builder and he is following Percentage Completion Method for computing income. During the course of assessment proceedings, the AO, however,estimated the income of the assessee @10% of the cumulative advances received

Incometax Officer, Mumbai vs. Vidhi Realtors, Mumbai Maharashtra

In the result, the cross appeals are treated as allowed for statistical purposes

ITA 1059/MUM/2024[2018-19]Status: DisposedITAT Mumbai28 Oct 2024AY 2018-19

Bench: Shri B.R. Baskaran & Shri Anikesh Banerjee

For Appellant: Shri Akshay JainFor Respondent: Shri Ashish Kumar, Sr.DR
Section 44A

Ld.CIT(A)‟] and it relates to AY. 2018-19. 2. The Ld.AR submitted that the assessee is a builder and he is following Percentage Completion Method for computing income. During the course of assessment proceedings, the AO, however,estimated the income of the assessee @10% of the cumulative advances received

Asstt. Commissioner of Income-Tax, Circle-5, Pune vs. Sangam Press Private Limited, Pune

Appeal is dismissed

ITA 674/PUN/2024[2017-18]Status: DisposedITAT Pune25 Oct 2024AY 2017-18

Bench: Shri R. K. Panda & Shri Satbeer Singh Godaraआयकर अपील सं. / Ita No.674/Pun/2024 िनधा"रण वष" / Assessment Year: 2017-18 Acit, Circle-5, Pune. Vs. Sangam Press Private Limited, 17-B, Sangam House, Sangam Press Road, Pune- 411038. Pan : Aaccs5995B Appellant Respondent Revenue By : Shri Ajay Kumar Keshari Assessee By Shri C. H. Naniwadekar : Date Of Hearing : 10.09.2024 Date Of Pronouncement : 25.10.2024 आदेश / Order Per Satbeer Singh Godara, Jm: This Revenue’S Appeal For Assessment Year 2017-18 Arises Against The Commissioner Of Income Tax (Appeals)-12, [In Short The “Cit(A)”] Pune’S Din & Order No.Itba/Apl/S/250/2023- 24/1060642739(1), Dated 08.02.2024, In Proceedings U/S 143(3) Of The Income Tax Act, 1961 (In Short “The Act”). Heard Both The Parties. Case File Perused.

For Respondent: Shri Ajay Kumar Keshari
Section 143(3)Section 43C

with retrospective effect from 1.4.2017, profits and gains arising from construction contract and service contracts were to be determined on the basis of percentage completion method only and therefore, assessee was mandatorily obliged disclose its income relating to the real-estate business by following the Percentage Completion Method ... then AO accepted Project Completion Method opted by the appellant. Further, the appellant contended that the AO did not adopt the percentage completion method which is one of the two methods available rather he assessed income on ‘adhoc basis’. The relevant portion of the said submission is as under. 5.PROTECT

Centre of Science and Technology for Rural Development, Ayyanthole, Thrissur vs. Income Tax Officer, Ward-1(1), Shakthanthampuran Nagar, Thrissur

In the result, all the appeals filed by the assessee are allowed for statistical purposes

ITA 361/COCH/2024[2017-18]Status: DisposedITAT Cochin21 Oct 2024AY 2017-18

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Sri.Vipin K, CAFor Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 139Section 142(1)Section 145(3)Section 147Section 148Section 69A

ld.AR also contended that the Revenue in the assessment year 2004-2005 has accepted the method of accounting of the assessee being percentage completion method, which is placed at pages 51 to 56 of the details filed by the ld.AR of the assessee. Accordingly, the mismatch between the TDS statement ... parties cannot be a ground for rejecting the books of account of the assessee. Likewise, the assessee is a civil contractor and following percentage completion method, which has also been accepted in the assessment year 2004-2005 in the assessment framed u/s143(3) of the Act. The relevant extract from

Centre of Science and Technology for Rural Development, Ayyanthole, Thrissur vs. Income Tax Officer, Shakthanthampuran Nagar, Thrissur

In the result, all the appeals filed by the assessee are allowed for statistical purposes

ITA 360/COCH/2024[2016-17]Status: DisposedITAT Cochin21 Oct 2024AY 2016-17

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Sri.Vipin K, CAFor Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 139Section 142(1)Section 145(3)Section 147Section 148Section 69A

ld.AR also contended that the Revenue in the assessment year 2004-2005 has accepted the method of accounting of the assessee being percentage completion method, which is placed at pages 51 to 56 of the details filed by the ld.AR of the assessee. Accordingly, the mismatch between the TDS statement ... parties cannot be a ground for rejecting the books of account of the assessee. Likewise, the assessee is a civil contractor and following percentage completion method, which has also been accepted in the assessment year 2004-2005 in the assessment framed u/s143(3) of the Act. The relevant extract from

Centre of Science and Tehcnology for Rural Development, Ayyanthole, Thrissur vs. Income Tax Officer, Shakthanthampuran Nagar, Thrissur

In the result, all the appeals filed by the assessee are allowed for statistical purposes

ITA 350/COCH/2024[2015-16]Status: DisposedITAT Cochin21 Oct 2024AY 2015-16

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Sri.Vipin K, CAFor Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 139Section 142(1)Section 145(3)Section 147Section 148Section 69A

ld.AR also contended that the Revenue in the assessment year 2004-2005 has accepted the method of accounting of the assessee being percentage completion method, which is placed at pages 51 to 56 of the details filed by the ld.AR of the assessee. Accordingly, the mismatch between the TDS statement ... parties cannot be a ground for rejecting the books of account of the assessee. Likewise, the assessee is a civil contractor and following percentage completion method, which has also been accepted in the assessment year 2004-2005 in the assessment framed u/s143(3) of the Act. The relevant extract from

Centre of Science and Technology for Rural Development, Ayyanthole, Thrissur vs. Income Tax Officer, Shakthanthampuran Nagar

In the result, all the appeals filed by the assessee are allowed for statistical purposes

ITA 349/COCH/2024[2014-15]Status: DisposedITAT Cochin21 Oct 2024AY 2014-15

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Sri.Vipin K, CAFor Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 139Section 142(1)Section 145(3)Section 147Section 148Section 69A

ld.AR also contended that the Revenue in the assessment year 2004-2005 has accepted the method of accounting of the assessee being percentage completion method, which is placed at pages 51 to 56 of the details filed by the ld.AR of the assessee. Accordingly, the mismatch between the TDS statement ... parties cannot be a ground for rejecting the books of account of the assessee. Likewise, the assessee is a civil contractor and following percentage completion method, which has also been accepted in the assessment year 2004-2005 in the assessment framed u/s143(3) of the Act. The relevant extract from

Centre of Science and Technology for Rural Development, Ayyanthole, Thrissur vs. Income Tax Officer, Sakthanthampuran Nagar, Thrissur

In the result, all the appeals filed by the assessee are allowed for statistical purposes

ITA 348/COCH/2024[2013-14]Status: DisposedITAT Cochin21 Oct 2024AY 2013-14

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Sri.Vipin K, CAFor Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 139Section 142(1)Section 145(3)Section 147Section 148Section 69A

ld.AR also contended that the Revenue in the assessment year 2004-2005 has accepted the method of accounting of the assessee being percentage completion method, which is placed at pages 51 to 56 of the details filed by the ld.AR of the assessee. Accordingly, the mismatch between the TDS statement ... parties cannot be a ground for rejecting the books of account of the assessee. Likewise, the assessee is a civil contractor and following percentage completion method, which has also been accepted in the assessment year 2004-2005 in the assessment framed u/s143(3) of the Act. The relevant extract from

ACIT CC-3, Thane vs. Jagdale Infrastructure Pvt. Ltd, Thane

ITA 4446/MUM/2024[2019-20]Status: DisposedITAT Mumbai09 Oct 2024AY 2019-20

Bench: Ms Padmavathy S, Am & Shri Rahul Chaudhary, Jm

Section 133ASection 145(3)

following grounds: “(a) The adhock method of estimating income @ 15% of receipts as followed by the Ld AO to determine income as per percentage completion method is not as per Guidance Note on Accounting for Real Estate Transactions issued by ICAI (b) Estimation of income is done ... favour of the buyer. (d) Booking advances not supported by executed agreement for sale are to be excluded in determining income as per percentage completion method. (e) Income from booking advances not supported by executed agreement for sale is offered to tax by the respondent in the subsequent asst. years

ACIT, Central Cirlce-4, Thane vs. Neel Sidhi Developers, Vashi Navi Mumbai

Appeal is dismissed

ITA 3064/MUM/2024[2013-14]Status: DisposedITAT Mumbai08 Oct 2024AY 2013-14

Bench: Shri Prashant Maharishi, Am & Shri Raj Kumar Chauhan, Jm A.Y.2013-14 Acit, Neel Sidhi Developers , Central Circle-4, Plot No.195, Beside Neel Thane Sidhi Towers, Sector-12, Vs. Vashi, Navi Mumbai 400703

made by the learned A Y : 2013–14 ACIT, Thane Versus Neel Sidhi Developers Assessing Officer in the assessment order by applying percentage completion method, was deleted. 2. Therefore, the learned AO is in appeal raising following grounds:- a) On the facts and in the circumstances of the case ... learned CIT (A) has erred in deleting the addition of Rs. 35,119,146/– made by the AO by applying percentage completion method without appreciating the fact that the assessee satisfied all the conditions for revenue recognition specified in accounting standard – 9 guidelines issued by ICAI, and therefore revenue should

Vallabh Infra, Vadodara vs. The ACIT, Circle-3(1), Vadodara

In the result, appeal preferred by the assessee is allowed for statistical purposes

ITA 910/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad01 Oct 2024AY 2016-17

Bench: Ms. Suchitra Kamble, Judical Member & Shri Narendra Prasad Sinhaआयकर अपील सं./I.T.A. No. 910/Ahd/2024 (िनधा"रण वष" / Assessment Year: 2016-17)

For Appellant: Shri Prashant Upadhyay, A.RFor Respondent: Shri Rohit Aasudani, Sr. DR
Section 143(3)

received total booking amount (in excess of 10%) of Rs.9,22,86,501/-. The AO worked out the gross profit by applying Percentage Completion Method and accordingly computed the gross profit at Rs.1,09,66,430/- (Rs.9,22,86,501/- x 93.93% x 12.65%). Accordingly, differential gross profit of Rs.26 ... Circle 3(1), Vadodara (hereinafter referred to as the AO) being estimated profits by wrongly applying the gross profit margin based on Percentage Completion Method. 3. The Honourable CIT (Appeals) erred in fact and in law by passing order without considering submissions made by the appellant to the AO against

Shri. Irulandi Thevar Vetrivel, Madurai vs. ACIT, Central Cricle 2, Madurai

In the result, all the appeals of the Revenue are dismissed and the appeals of the assessee are partly allowed

ITA 240/CHNY/2024[2021-22]Status: DisposedITAT Chennai01 Oct 2024AY 2021-22

Bench: Shri Aby T. Varkey & Shri Amitabh Shukla

For Appellant: Shri Y Sridhar, FCAFor Respondent: Shri R Clement Ramesh
Section 132Section 139Section 139(1)Section 153ASection 37Section 65B

exercise of re-casting the P&L A/c for AY 2020-21 itself wherein the assessee had re-drawn the accounts following the percentage completion method. It was brought to our notice that, the above-mentioned provision was originally created by the assessee in relation to the Chettikulam-Natham project ... said year-end provision was however removed, while drawing up the re-casted P&L A/c for AY 2020-21 under the recognized percentage completion method. The Ld. CIT, DR contended that, on one hand, the assessee had removed the year-end provision, but it had also re-stated

Shri. Irulandi Thevar Vetrivel, Madurai vs. ACIT, Central Circle 2, Madurai

In the result, all the appeals of the Revenue are dismissed and the appeals of the assessee are partly allowed

ITA 239/CHNY/2024[2020-21]Status: DisposedITAT Chennai01 Oct 2024AY 2020-21

Bench: Shri Aby T. Varkey & Shri Amitabh Shukla

For Appellant: Shri Y Sridhar, FCAFor Respondent: Shri R Clement Ramesh
Section 132Section 139Section 139(1)Section 153ASection 37Section 65B

exercise of re-casting the P&L A/c for AY 2020-21 itself wherein the assessee had re-drawn the accounts following the percentage completion method. It was brought to our notice that, the above-mentioned provision was originally created by the assessee in relation to the Chettikulam-Natham project ... said year-end provision was however removed, while drawing up the re-casted P&L A/c for AY 2020-21 under the recognized percentage completion method. The Ld. CIT, DR contended that, on one hand, the assessee had removed the year-end provision, but it had also re-stated

Shri. Irulandi Thevar Vetrivel, Madurai vs. ACIT, Central Circle 2, Madurai

ITA 238/CHNY/2024[2019-20]Status: DisposedITAT Chennai01 Oct 2024AY 2019-20

Bench: Shri Aby T. Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita Nos. 131 To 136/Chny/2024 निर्धारण वर्ष/Assessment Years: 2016-17 To 2021-22 The Acit, Central Circle-2, Madurai. (अपीलार्थी/Appellant) V. Shri Irulandi Thevar Vetrivel, No.3/1, Ashok Nagar, 4Th Street, Palamedu Main Road, Madurai - 625 018. [Pan: Acopv 5310 J] (प्रत्यर्थी/Respondent) आयकर अपील सं./Ita Nos. 235 To 240/Chny/2024 निर्धारण वर्ष/Assessment Years: 2016-17 To 2021-22 Shri Irulandi Thevar Vetrivel, No.3/1, Ashok Nagar, 4Th Street, Palamedu Main Road, Madurai - 625 018. [Pan: Acopv_5310 J] (अपीलार्थी/Appellant) V. The Acit, Central Circle-2, Madurai. (प्रत्यर्थी/Respondent) Department By : Shri R Clement Ramesh Kumar, Cit-Dr Assessee By : Shri Y Sridhar, Fca सुनवाईकीतारीख/Date Of Hearing : 12.08.2024 घोषणाकीतारीख /Date Of Pronouncement : 01.10.2024

For Appellant: Shri Y Sridhar, FCAFor Respondent: Shri R Clement Ramesh
Section 132Section 139Section 139(1)Section 153ASection 37Section 65B

आयकर अपीलीय अधिकरण, 'सी' न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिक