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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

ACIT, Circle-50(1), New Delhi vs. Harkanwarpal Singh Lamba, New Delhi

In the result, the appeal of the Revenue is allowed for statistical

ITA 604/DEL/2020[2016-17]Status: DisposedITAT Delhi09 Apr 2025AY 2016-17

Bench: Shri Yogesh Kumar Us & Shri Avdhesh Kumar Mishra

Section 10(38)

Rs.78,76,459/- as advance. However, the treated the sum of Rs.78,76,459/- as the revenue receipt as per percentage completion method regularly followed by the assessee for his real estate business. Aggrieved, the assessee filed appeal before CIT(A) and succeeded. 4. The Ld. Senior Departmental Representative (hereinafter ... into collaboration agreement with the builder; Bestech India Pvt. Ltd. in 2011. The builder built the flats and recorded 27.31% revenue as per percentage completion method. The assessee got11 flats in lieu of the transfer of the land. The assessee has shown receipt of advance ofRs.3,94,08,582/- from

Newry Properties Pvt. Ltd., Chennai vs. DCIT, Corp. Circle-4(1), Chennai

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

ITA 94/CHNY/2025[2021-22]Status: DisposedITAT Chennai08 Apr 2025AY 2021-22

Bench: SHRI MANU KUMAR GIRI (Judicial Member), SHRI S.R. RAGHUNATHA (Accountant Member)

For Appellant: Shri Y. Sridhar, FCAFor Respondent: Ms. Anitha, Addl.CIT
Section 139(1)Section 143(1)Section 145(1)Section 154Section 194I

impugned assessment year on the revenues which has already been offered to tax in the earlier assessment years based on the percentage completion method. Before us, the Ld.AR furnished the reconciliation of TDS received, corresponding revenue offered to tax in each of the earlier assessment years along with the 26AS

ACIT, Circle, Panchkula vs. M/S Haryana State Industrial & Infrastructure Dev. Corp. Ltd., Panchkula

In the result, appeal of the Revenue is dismissed

ITA 1424/CHANDI/2019[2014-15]Status: DisposedITAT Chandigarh07 Apr 2025AY 2014-15

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri A.K. Jindal and Ms. Rattan Kaur, C.A’sFor Respondent: Shri Rohit Sharma, CIT DR
Section 14ASection 28

method of accounting of the assessee for the A.Y. 2018-19 onwards and no objection has been raised for the mercantile method (percentage completion method) completion method. 4.3 It was further submitted that every year is independent separate year and the present appeal should not continue, after the decision

Goel Eisha Capitals, Pune vs. PCIT(Central), Pune

ITA 1006/PUN/2024[AY 2019 - 20]Status: DisposedITAT Pune07 Apr 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Krishna GujarathiFor Respondent: Shri Amol Khairnar, CIT-DR
Section 132Section 142(1)Section 143(2)Section 143(3)Section 263

with "Viva Highways Pvt. Ltd. (land owner)", wherein the assessee was the developer having 70% share in revenue and has followed the "percentage completion method for revenue recognition. Further, the assessee had claimed an amount of Rs.9,87,26,677/- as "Provision for Construction Expenditure" for pending work pertaining ... submit details of Work-In-Progress(WIP) of its all mojor concerns and details of revenue going to be recognized by following Percentage Completion Method of accounting by 31.03.2019. In reply to Q.No.36 & 37 of his aforesaid statement, he offered sales of Rs.208,82,98,161/- out of total

Suchita Bhatia, Jaipur vs. DCIT Cir-6, Jaipur

In the result, this appeal of the assessee is allowed

ITA 902/JPR/2024[2016-17]Status: DisposedITAT Jaipur17 Mar 2025AY 2016-17

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Vivek Bhargav, C.AFor Respondent: Shri. Anup Singh, Addl.CIT a
Section 143(2)Section 250

Delhi ITA no. 7496/Del/2019 Issue:- Real Estate business with high closing stock (verify whether assessee has adopted percentage completion method) Order Passed by AO:- AO found that assessee company sold some plots below circle rate and made addition accordingly u/s 43CA. Contention of the Assessee: Assessee took objection ... instruction but addition could only be made on the specific issue of valuation of stock only. In the instant case assessee informed that percentage completion method was not applicable on it despite this AO without obtaining prior approval from authorities made the addition u/s 43CA and exceeded the limit hence

Dy. Commissioner of Income Tax, Central Circle-5(1), Mumbai vs. Itd Cementation India Limited, Mumbai

ITA 5235/MUM/2024[2015-16]Status: DisposedITAT Mumbai17 Mar 2025AY 2015-16

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Vijay Mehta, CAFor Respondent: Shri Amol Kirtane, CIT DR
Section 14Section 143(3)Section 148Section 148A

Accounting standard and consistent policy of revenue recognition according to which the revenue from constriction contract is always recognized on the basis of Percentage Completion Method (PCM). If it is accepted that the contract will make a loss the estimated loss is immediately provided for in the books of account

Dy. Commissioner of Income Tax, Central Circle-5(1), Mumbai vs. Itd Cementation India Limited, Mumbai

ITA 5234/MUM/2024[2016-17]Status: DisposedITAT Mumbai17 Mar 2025AY 2016-17

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Vijay Mehta, CAFor Respondent: Shri Amol Kirtane, CIT DR
Section 143(3)Section 148Section 148A

Accounting standard and consistent policy of revenue recognition according to which the revenue from constriction contract is always recognized on the basis of Percentage Completion Method (PCM). If it is accepted that the contract will make a loss the estimated loss is immediately provided for in the books of account

Dy. Commissioner of Income Tax, Central Circle-5(1), Mumbai vs. Itd Itd Cem Joint Venture, Mumbai

In the result, appeals of both, assessee and revenue are decided as per the table below:

ITA 5232/MUM/2024[2015-16]Status: DisposedITAT Mumbai17 Mar 2025AY 2015-16

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Vijay Mehta, CAFor Respondent: Shri Amol Kirtane, CIT DR
Section 1Section 143(3)Section 148Section 148A

Accounting standard and consistent policy of revenue recognition according to which the revenue from constriction contract is always recognized on the basis of Percentage Completion Method (PCM). If it is accepted that the contract will make a loss the estimated loss is immediately provided for in the books of account

Itd Itd Cem Joint Venture, Mumbai vs. The Deputy Commissioner of Income Tax, Central Circle 5(1), Mumbai

ITA 4620/MUM/2024[2015-16]Status: DisposedITAT Mumbai17 Mar 2025AY 2015-16

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Vijay Mehta, CAFor Respondent: Shri Amol Kirtane, CIT DR
Section 143(3)Section 148Section 148A

Accounting standard and consistent policy of revenue recognition according to which the revenue from constriction contract is always recognized on the basis of Percentage Completion Method (PCM). If it is accepted that the contract will make a loss the estimated loss is immediately provided for in the books of account

Itd Cementation India Limited, Mumbai vs. The Deputy Commissioner of Incme Tax, Central Circle 5(1), Mumbai, Mumai

ITA 4568/MUM/2024[2016-17]Status: DisposedITAT Mumbai17 Mar 2025AY 2016-17

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Vijay Mehta, CAFor Respondent: Shri Amol Kirtane, CIT DR
Section 143(3)Section 148Section 148A

Accounting standard and consistent policy of revenue recognition according to which the revenue from constriction contract is always recognized on the basis of Percentage Completion Method (PCM). If it is accepted that the contract will make a loss the estimated loss is immediately provided for in the books of account

Itd Cementation India Limited, Mumbai vs. The Deputy Commissioner of Income Tax, Central Circle 5(1), Mumbai

In the result, appeals of both, assessee and revenue are decided as per the table below:

ITA 4539/MUM/2024[2015-16]Status: DisposedITAT Mumbai17 Mar 2025AY 2015-16

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Vijay Mehta, CAFor Respondent: Shri Amol Kirtane, CIT DR
Section 1Section 143(3)Section 148Section 148A

Accounting standard and consistent policy of revenue recognition according to which the revenue from constriction contract is always recognized on the basis of Percentage Completion Method (PCM). If it is accepted that the contract will make a loss the estimated loss is immediately provided for in the books of account

Itd Cementation India Limited, Mumbai vs. The Deputy Commissioner of Income Tax, Central Circle 5(1), Mumbai

In the result, appeals of both, assessee and revenue are decided as per the table below:

ITA 4532/MUM/2024[2019-20]Status: DisposedITAT Mumbai17 Mar 2025AY 2019-20

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Vijay Mehta, CAFor Respondent: Shri Amol Kirtane, CIT DR
Section 1Section 143(3)Section 148Section 148A

Accounting standard and consistent policy of revenue recognition according to which the revenue from constriction contract is always recognized on the basis of Percentage Completion Method (PCM). If it is accepted that the contract will make a loss the estimated loss is immediately provided for in the books of account

Asst. CIT-CC-6(1), Mumbai, Bkc Mumbai vs. Ganadhish Gnp, Mumbai

ITA 4485/MUM/2024[2019-20]Status: DisposedITAT Mumbai17 Mar 2025AY 2019-20

Bench: Shri Amarjit Singh, Hon'Ble & Shri Raj Kumar Chauhan, Hon'Ble

For Appellant: Shri Nishit Gandhi & Aadnya BhandariFor Respondent: Dr. Kishor Dhule, CIT/DR
Section 132Section 132(4)

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH 'G', MUMBAI BEFORE SHRI AMARJIT SINGH, HON'BLE ACCOUNTANT MEMBER AND SHRI

ACIT CC 6(1), Mumbai vs. Ganadhish Gnp, Mumbai

ITA 4481/MUM/2024[2021-22]Status: DisposedITAT Mumbai17 Mar 2025AY 2021-22

Bench: Shri Amarjit Singh, Hon'Ble & Shri Raj Kumar Chauhan, Hon'Ble

For Appellant: Shri Nishit Gandhi & Aadnya BhandariFor Respondent: Dr. Kishor Dhule, CIT/DR
Section 132Section 132(4)

require fair estimation of net income earned by assessee out of “on money” receipts. 7.26 It is also noticed that assessee is following percentage completion method of recognizing the revenue in the books of accounts. Assessee has offered the income on proportionate completion method in the return of income filed ... period AY 2018-19 to 2022-23 as under: - | AY | Sales as per books of accounts | Net Income offered by assessee on percentage completion method | Net profit as per books

M/S Ganadhish Gnp, Mumbai vs. DCIT Circle -6(1), Mumbai

ITA 3980/MUM/2024[2021-22]Status: DisposedITAT Mumbai17 Mar 2025AY 2021-22

Bench: Shri Amarjit Singh, Hon'Ble & Shri Raj Kumar Chauhan, Hon'Ble

For Respondent: Shri Nishit Gandhi & Aadnya Bhandari
Section 132Section 132(4)

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH 'G', MUMBAI BEFORE SHRI AMARJIT SINGH, HON'BLE ACCOUNTANT MEMBER AND SHRI

Ganadhish Gnp, Navi Mumbai vs. DCIT Circle 6(1), Mumbai

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

ITA 3966/MUM/2024[2019-20]Status: DisposedITAT Mumbai17 Mar 2025AY 2019-20

Bench: Shri Amarjit Singh, Hon’Ble & Shri Raj Kumar Chauhan, Hon’Bleita No. 3965/Mum/2024 (A.Y. 2020-21) Ganadhish Gnp Dcit, Circle-6(1), Mumbai Shop No. 1203, 12Th Floor, Rupa Solitaire, Building No. A-I, Vs Sector-I, Millennium Business Park, Mahape Navi Mumbai- 400710. Pan: Aapfg 1164 L (Appellant) (Respondent) Ita No. 4481/Mum/2024 (A.Y. 2021-22) Dcit, Circle-6(1), Ganadhish Gnp Mumbai Shop No. 1203, 12Th Floor, Rupa Solitaire, Building No. A- Vs I, Sector-I, Millennium Business Park, Mahape Navi Mumbai-400710. Pan: Aapfg 1164 L (Appellant) (Respondent)

For Appellant: Shri Nishit Gandhi & Aadnya BhandariFor Respondent: Dr. Kishor Dhule, CIT/DR
Section 132Section 132(4)

require fair estimation of net income earned by assessee out of “on money” receipts. 7.26 It is also noticed that assessee is following percentage completion method of recognizing the revenue in the books of accounts. Assessee has offered the income on proportionate completion method in the return of income filed ... embedded in such receipt to be brought to tax and not the entire receipt itself. Further, it is noticed that assessee has followed percentage completion method of recognizing the revenue in the books of account. It is evident from the return of income filed by the assessee

Ganadhish Gnp, Navi Mumbai vs. DCIT Circle 6(1), Mumbai

ITA 3965/MUM/2024[2020-21]Status: DisposedITAT Mumbai17 Mar 2025AY 2020-21

Bench: Shri Amarjit Singh, Hon'Ble & Shri Raj Kumar Chauhan, Hon'Ble

For Appellant: Shri Nishit Gandhi & Aadnya BhandariFor Respondent: Dr. Kishor Dhule, CIT/DR
Section 132Section 132(4)

require fair estimation of net income earned by assessee out of “on money” receipts. 7.26 It is also noticed that assessee is following percentage completion method of recognizing the revenue in the books of accounts. Assessee has offered the income on proportionate completion method in the return of income filed ... Sales as per books of accounts | | | | | | 23,67,06,040 | | 9,30,53,313 | | Net Income offered by assessee on percentage completion method | | | | 1,31,95,081 | | 6,81,97,793 | | 1,19,96,715 | | Net profit as per books (in %) | | | | 13% | | 29% | | 13% | 7.27 It is also noticed

DCIT, Central Circle-2(4), Ahmedabad vs. Hiralal Dayaram Thakkar, Ahmedabad

In the result, appeal of the Revenue is partly allowed for statistical purposes and the cross objection of the assessee is dismissed

ITA 159/AHD/2024[2014-15]Status: DisposedITAT Ahmedabad12 Mar 2025AY 2014-15

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinhaआयकर अपील सं./I.T.A. Nos. 157, 158 & 159/Ahd/2024 & Cross Objection Nos. 39, 40 & 41/Ahd/2024 ("नधा"रण वष" / Assessment Years : 2012-13, 2013-14 & 2014-15) बनाम/ Dcit Hiralal Dayaram Thakkar Central Circle-2(4), 1, Nilkanth Complex, Nr. Vs. Ahmedabad Tv-9, Jivraj Park, Gujarat – 380051 Hiralal Dayaram Thakkar & Dcit 1, Nilkanth Complex, Nr. Central Circle-2(4), Tv-9, Jivraj Park, Gujarat Ahmedabad - 380051 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aanpt3721E (Appellant / Cross Objector) .. (Respondent) Shri Vivek Chavda & Shri Nishit Assessee By : Jesur, A.Rs. Revenue By : Shri Kalpesh Rupavatia, Sr. Dr 06/03/2025 Date Of Hearing Date Of Pronouncement 12/03/2025

For Appellant: Jesur, A.RsFor Respondent: Shri Kalpesh Rupavatia, Sr. DR
Section 250Section 68

found that the assessee was not maintaining his accounts in accordance with the recognized method of accounting of project completion or percentage completion method. Therefore, he rejected the books of accounts of the assessee and estimated the profit @ 20%. Accordingly, the assessment for A.Y. 2012-13 was completed u/s.143 ... assessee was engaged in the construction activity, he was duty bound to follow the prescribed accounting standard of either project completion or percentage completion method. In the course of assessment, even the basic details of unit-wise or party-wise receipts of sales were not made available by the assessee

DCIT, Central Circle-2(4), Ahmedabad vs. Hiralal Dayaram Thakkar, Ahmedabad

In the result, appeal of the Revenue is partly allowed for statistical purposes and the cross objection of the assessee is dismissed

ITA 158/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad12 Mar 2025AY 2013-14

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinhaआयकर अपील सं./I.T.A. Nos. 157, 158 & 159/Ahd/2024 & Cross Objection Nos. 39, 40 & 41/Ahd/2024 ("नधा"रण वष" / Assessment Years : 2012-13, 2013-14 & 2014-15) बनाम/ Dcit Hiralal Dayaram Thakkar Central Circle-2(4), 1, Nilkanth Complex, Nr. Vs. Ahmedabad Tv-9, Jivraj Park, Gujarat – 380051 Hiralal Dayaram Thakkar & Dcit 1, Nilkanth Complex, Nr. Central Circle-2(4), Tv-9, Jivraj Park, Gujarat Ahmedabad - 380051 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aanpt3721E (Appellant / Cross Objector) .. (Respondent) Shri Vivek Chavda & Shri Nishit Assessee By : Jesur, A.Rs. Revenue By : Shri Kalpesh Rupavatia, Sr. Dr 06/03/2025 Date Of Hearing Date Of Pronouncement 12/03/2025

For Appellant: Jesur, A.RsFor Respondent: Shri Kalpesh Rupavatia, Sr. DR
Section 250Section 68

found that the assessee was not maintaining his accounts in accordance with the recognized method of accounting of project completion or percentage completion method. Therefore, he rejected the books of accounts of the assessee and estimated the profit @ 20%. Accordingly, the assessment for A.Y. 2012-13 was completed u/s.143 ... assessee was engaged in the construction activity, he was duty bound to follow the prescribed accounting standard of either project completion or percentage completion method. In the course of assessment, even the basic details of unit-wise or party-wise receipts of sales were not made available by the assessee

DCIT, Central Circle-2(4), Ahmedabad vs. Hiralal Dayaram Thakkar, Ahmedabad

In the result, appeal of the Revenue is partly allowed for statistical purposes and the cross objection of the assessee is dismissed

ITA 157/AHD/2024[2012-13]Status: DisposedITAT Ahmedabad12 Mar 2025AY 2012-13

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinhaआयकर अपील सं./I.T.A. Nos. 157, 158 & 159/Ahd/2024 & Cross Objection Nos. 39, 40 & 41/Ahd/2024 ("नधा"रण वष" / Assessment Years : 2012-13, 2013-14 & 2014-15) बनाम/ Dcit Hiralal Dayaram Thakkar Central Circle-2(4), 1, Nilkanth Complex, Nr. Vs. Ahmedabad Tv-9, Jivraj Park, Gujarat – 380051 Hiralal Dayaram Thakkar & Dcit 1, Nilkanth Complex, Nr. Central Circle-2(4), Tv-9, Jivraj Park, Gujarat Ahmedabad - 380051 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aanpt3721E (Appellant / Cross Objector) .. (Respondent) Shri Vivek Chavda & Shri Nishit Assessee By : Jesur, A.Rs. Revenue By : Shri Kalpesh Rupavatia, Sr. Dr 06/03/2025 Date Of Hearing Date Of Pronouncement 12/03/2025

For Appellant: Jesur, A.RsFor Respondent: Shri Kalpesh Rupavatia, Sr. DR
Section 250Section 68

found that the assessee was not maintaining his accounts in accordance with the recognized method of accounting of project completion or percentage completion method. Therefore, he rejected the books of accounts of the assessee and estimated the profit @ 20%. Accordingly, the assessment for A.Y. 2012-13 was completed u/s.143 ... assessee was engaged in the construction activity, he was duty bound to follow the prescribed accounting standard of either project completion or percentage completion method. In the course of assessment, even the basic details of unit-wise or party-wise receipts of sales were not made available by the assessee