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“project completion method”

ICDS & AccountingICDS IIIICDS III326 judgments

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

Leading authorities on project 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. Shivalik Buildwell P Ltd.
40 Taxmann.com 219 · 2013 · High Court
44
citing judgments

Real estate developers' profits arise only upon the transfer of title, and advances received from customers cannot be treated as trading receipts in the year of receipt.

CIT v. Ashaland Corporation
133 ITR 55 · 1982 · High Court
44
citing judgments

Income from the sale of immovable property, including any 'on-money' component, is taxable only when the sale is complete, marked by the execution and registration of the sale deed and/or transfer of possession to the buyer.

CIT v. Happy Home Corporation
94 Taxmann.com 292 · 2018 · High Court
42
citing judgments

When a partner admits to undisclosed income during a survey, and that income is linked to future sale deed registrations, it can be considered as income received for the purpose of assessment under Section 145 of the Income-tax Act, 1961, even if it is subject to conditions.

Ltd. v. ITO
64 DTR 251 · 2011 · ITAT
39
citing judgments

The Assessing Officer accepted the assessee's claim of being in the construction business and its use of the project completion method, and the Revenue did not take remedial measures under sections 263 or 147, indicating acceptance of the assessment.

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.

Judgments citing project completion method

DCIT Circle 3(3)(1), Mumbai vs. S D Corporation Private Limited, Mumbai

In the result, the appeal of the revenue vide ITA Nos

ITA 6033/MUM/2019[2008-09]Status: DisposedITAT Mumbai30 Aug 2023AY 2008-09

Bench: Shri Vikas Awasthy & Shri Amarjit Singhita Nos.6191 To 6194, 6204 & 6033 /Mum/2019 (A.Ys. 2008-09, 2009-10, 2011-12 To 2014-15)

For Appellant: Mahita NairFor Respondent: Dharmesh Shah &
Section 115JSection 143(3)Section 147

relation to work executed for SDCL which has been filed before the AO. The assessee further contended that because he is following project completion method for recognising revenue from the work, whatever expenditure incurred for the project has been shown under WIP, pending recognition of revenue. The assessee further contended ... without allowing any deduction for expenditure is arbitrary. The Ld. Senior Counsel for the assessee submitted that the assessee has recognised revenue on project completion method, therefore, if at all the income from the activity of the assessee is to be recognised during the relevant financial year

M/S Parth Developers, Dhar vs. The PCIT -1, Indorer

In the result, appeal of assessee is allowed

ITA 419/IND/2022[2015-16]Status: DisposedITAT Indore28 Aug 2023AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanim/S. Parth Developers Pr. Cit-1 Manawar Dist. Indore Vs. Dhar (Appellant / Assessee) (Respondent/ Revenue) Pan: Aalfp 4509 N Assessee By Shri Milind Wadhwani, Ar Revenue By Shri P.K. Mishra, Cit-Dr Date Of Hearing 22.06.2023 Date Of Pronouncement 28.07.2023

Section 142(1)Section 143Section 143(3)Section 263Section 43C

show cause notice the Pr. CIT has raised the issue of applicability of Percentage Completion Method as against the Project Completion Method adopted by the assesse. There was no response on behalf of the assesse to the notice issued by the Pr. CIT consequently the impugned order was passed ... present appeal. 5. The Ld. AR of the assesse has submitted that the assesse followed mercantile system of accounting and consistently following the Project Completion Method of accounting from year after year. The assesse offered the revenue for taxation in the year when the sales were made and sale deed

DCIT, Central Circle, Karnal vs. Dwarkadhis Buildwell Pvt. Ltd., Bhiwani

In the result, the appeal of the Revenue in ITA No

ITA 4807/DEL/2019[2014-15]Status: DisposedITAT Delhi16 Aug 2023AY 2014-15

Bench: Shri N.K. Billaiya & Shri Yogesh Kumar U.S

For Appellant: Shri Gautam Jain, AdvFor Respondent: Shri T. James Singson, CIT-DR
Section 143(3)Section 145(2)

crores. 7. The assessee carried the matter before the ld. CIT(A) and convinced the ld. CIT(A) that the Project Completion Method is applicable. It was further contended that the assessee has been consistently following the PCM since A.Y 2010-11 and in all the preceding years, method

DCIT, Central Circle, Karnal vs. Trishla Buildtech Pvt. Ltd., Delhi

The appeal of the assessee is allowed and that of the Revenue is liable to be dismissed on this ground

ITA 2468/DEL/2022[2012-13]Status: DisposedITAT Delhi09 Aug 2023AY 2012-13

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Ashwani Kumar, CA &For Respondent: Sh. Amit Katoch, Sr. DR
Section 132Section 133ASection 143(1)Section 143(2)Section 147Section 148Section 68

builders and developers and same in the case with our firms and in no way provide service as contractors. We are following the project completion method for a/c purpose continuously since inception and department is also accepting our returns accordingly. We have tried our best to provide you all kind

Trishla Buildtech Pvt Ltd, Haryana vs. DCIT, Central Circle Karnal, Haryana

The appeal of the assessee is allowed and that of the Revenue is liable to be dismissed on this ground

ITA 2093/DEL/2022[2012-13]Status: DisposedITAT Delhi09 Aug 2023AY 2012-13

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Ashwani Kumar, CA &For Respondent: Sh. Amit Katoch, Sr. DR
Section 132Section 133ASection 143(1)Section 143(2)Section 147Section 148Section 68

builders and developers and same in the case with our firms and in no way provide service as contractors. We are following the project completion method for a/c purpose continuously since inception and department is also accepting our returns accordingly. We have tried our best to provide you all kind

DCIT Central Circle-2(4), Mumbai vs. Rustomjee Evershine Joint Venture, Mumbai

In the result, the appeals filed by the revenue for AY 2013-14 &

ITA 1825/MUM/2022[2014-15]Status: DisposedITAT Mumbai31 Jul 2023AY 2014-15

Bench: Shri Aby T. Varkey, Jm & Shri S. Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.1349/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2013-14) Dcit, Central Circle-2(4) बिधम/ Rustomjee Evershine Room No. 802, 8Th Floor, Joint Venture Vs. Prathishtha Bhavan, M. K. Global City, Narangi Road, Churchgate, Mumbai- Bypass Road, Close To 400020. Viva College, Virar (W), Virar-401303. Cross Objection No. 27/Mum/2023 Arising Out Of I.T.A. No.1349/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2013-14) Rustomjee Evershine Joint बिधम/ Dcit, Central Circle-2(4) Room No. 802, 8Th Floor, Venture Vs. Global City, Narangi Prathishtha Bhavan, M. K. Bypass Road, Close To Viva Road, Churchgate, College, Virar (W), Virar- Mumbai-400020. 401303. आयकर अपील सं/ I.T.A. Nos.1824 & 1825/Mum/2022 (निर्धारण वर्ा / Assessment Years: 2016-17 & 2014-15) Dcit, Central Circle-2(4) बिधम/ Rustomjee Evershine Room No. 802, 8Th Floor, Joint Venture Vs. Prathishtha Bhavan, M. K. Global City, Narangi Road, Churchgate, Mumbai- Bypass Road, Close To 400020. Viva College, Virar (W), Virar-401303. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaaar7687M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Naresh Kumar Revenue By: Shri P. D. Chougule (Addl. Cit) सुनवाई की तारीख / Date Of Hearing: 25/05/2023 घोषणा की तारीख /Date Of Pronouncement: 31/07/2023

For Appellant: Shri Naresh KumarFor Respondent: Shri P. D. Chougule (Addl. CIT)

noted that the assessee has been C.O. 27/Mum/2023 A.Ys. 2013-14, 2014-15 & 2016-17 Rustomjee Evershine Joint Venture following the percentage of project completion method in accordance to Accounting Standard (AS)-16. And he examined the working given by the assessee and noted that the assessee had revenue from ... Institute of Chartered Accountants of India recognizes the position that in the case of construction contracts the assessee can follow either the project completion method or percentage completion method. Neither revised guidance notes 2012 issued by Institute of Chartered Accountants of India nor "Exposer Draft for Guidance Note on recognition

DCIT Central Circle-2(4), Mumbai vs. Rustomjee Evershine Joint Venture, Mumbai

In the result, the appeals filed by the revenue for AY 2013-14 &

ITA 1824/MUM/2022[2016-17]Status: DisposedITAT Mumbai31 Jul 2023AY 2016-17

Bench: Shri Aby T. Varkey, Jm & Shri S. Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.1349/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2013-14) Dcit, Central Circle-2(4) बिधम/ Rustomjee Evershine Room No. 802, 8Th Floor, Joint Venture Vs. Prathishtha Bhavan, M. K. Global City, Narangi Road, Churchgate, Mumbai- Bypass Road, Close To 400020. Viva College, Virar (W), Virar-401303. Cross Objection No. 27/Mum/2023 Arising Out Of I.T.A. No.1349/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2013-14) Rustomjee Evershine Joint बिधम/ Dcit, Central Circle-2(4) Room No. 802, 8Th Floor, Venture Vs. Global City, Narangi Prathishtha Bhavan, M. K. Bypass Road, Close To Viva Road, Churchgate, College, Virar (W), Virar- Mumbai-400020. 401303. आयकर अपील सं/ I.T.A. Nos.1824 & 1825/Mum/2022 (निर्धारण वर्ा / Assessment Years: 2016-17 & 2014-15) Dcit, Central Circle-2(4) बिधम/ Rustomjee Evershine Room No. 802, 8Th Floor, Joint Venture Vs. Prathishtha Bhavan, M. K. Global City, Narangi Road, Churchgate, Mumbai- Bypass Road, Close To 400020. Viva College, Virar (W), Virar-401303. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaaar7687M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Naresh Kumar Revenue By: Shri P. D. Chougule (Addl. Cit) सुनवाई की तारीख / Date Of Hearing: 25/05/2023 घोषणा की तारीख /Date Of Pronouncement: 31/07/2023

For Appellant: Shri Naresh KumarFor Respondent: Shri P. D. Chougule (Addl. CIT)

noted that the assessee has been C.O. 27/Mum/2023 A.Ys. 2013-14, 2014-15 & 2016-17 Rustomjee Evershine Joint Venture following the percentage of project completion method in accordance to Accounting Standard (AS)-16. And he examined the working given by the assessee and noted that the assessee had revenue from ... Institute of Chartered Accountants of India recognizes the position that in the case of construction contracts the assessee can follow either the project completion method or percentage completion method. Neither revised guidance notes 2012 issued by Institute of Chartered Accountants of India nor "Exposer Draft for Guidance Note on recognition

DCIT Central Circel-2(4), Mumbai vs. Rustomji Evershine Joint Venture, Mumbai

In the result, the appeals filed by the revenue for AY 2013-14 &

ITA 1349/MUM/2022[2013-2014]Status: DisposedITAT Mumbai31 Jul 2023AY 2013-2014

Bench: Shri Aby T. Varkey, Jm & Shri S. Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.1349/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2013-14) Dcit, Central Circle-2(4) बिधम/ Rustomjee Evershine Room No. 802, 8Th Floor, Joint Venture Vs. Prathishtha Bhavan, M. K. Global City, Narangi Road, Churchgate, Mumbai- Bypass Road, Close To 400020. Viva College, Virar (W), Virar-401303. Cross Objection No. 27/Mum/2023 Arising Out Of I.T.A. No.1349/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2013-14) Rustomjee Evershine Joint बिधम/ Dcit, Central Circle-2(4) Room No. 802, 8Th Floor, Venture Vs. Global City, Narangi Prathishtha Bhavan, M. K. Bypass Road, Close To Viva Road, Churchgate, College, Virar (W), Virar- Mumbai-400020. 401303. आयकर अपील सं/ I.T.A. Nos.1824 & 1825/Mum/2022 (निर्धारण वर्ा / Assessment Years: 2016-17 & 2014-15) Dcit, Central Circle-2(4) बिधम/ Rustomjee Evershine Room No. 802, 8Th Floor, Joint Venture Vs. Prathishtha Bhavan, M. K. Global City, Narangi Road, Churchgate, Mumbai- Bypass Road, Close To 400020. Viva College, Virar (W), Virar-401303. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaaar7687M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Naresh Kumar Revenue By: Shri P. D. Chougule (Addl. Cit) सुनवाई की तारीख / Date Of Hearing: 25/05/2023 घोषणा की तारीख /Date Of Pronouncement: 31/07/2023

For Appellant: Shri Naresh KumarFor Respondent: Shri P. D. Chougule (Addl. CIT)

noted that the assessee has been C.O. 27/Mum/2023 A.Ys. 2013-14, 2014-15 & 2016-17 Rustomjee Evershine Joint Venture following the percentage of project completion method in accordance to Accounting Standard (AS)-16. And he examined the working given by the assessee and noted that the assessee had revenue from ... Institute of Chartered Accountants of India recognizes the position that in the case of construction contracts the assessee can follow either the project completion method or percentage completion method. Neither revised guidance notes 2012 issued by Institute of Chartered Accountants of India nor "Exposer Draft for Guidance Note on recognition

Lakshya Realinfra Pvt. Ltd., Noida vs. ACIT, Circle- 15(1), New Delhi

In the result, appeal of the assessee is partly allowed

ITA 4293/DEL/2017[2012-13]Status: DisposedITAT Delhi31 Jul 2023AY 2012-13

Bench: Shri C.M. Garg & Shri M. Balaganeshlakshya Realinfra Pvt. Ltd, Vs. Acit, Unit No. 703-704, 7Th Floor, Circle-15(1), P-6, Ocean Complex, Opp Gip New Delhi Mall, Sector-18, Noida (Appellant) (Respondent) Pan: Aabcl5225G Assessee By : Sh. Sandeep Sapra, Adv Revenue By: Ms. Raja Rajeshwari R., Sr. Dr Date Of Hearing 23/05/2023 Date Of Pronouncement 31/07/2023

For Appellant: Sh. Sandeep Sapra, AdvFor Respondent: Ms. Raja Rajeshwari R., Sr. DR
Section 57

against income of other projects which were completed during the impugned years, resulted into distortion of the correct profits, as per the project completion method followed. While reaching this conclusion, the ITAT discussed the then Bombay High Court decision in the case of Taparia Tools

M/S. Mauli Sai Developers Pvt Ltd., Mumbai vs. Income Tax Department, NFAC, Delhi

In the result, appeal of the assessee is allowed for statistical purposes

ITA 318/MUM/2023[2012-13]Status: DisposedITAT Mumbai19 Jul 2023AY 2012-13
Section 143(3)Section 68

Addition of Rs. 1,49,67,065 as profits from three projects by following Percentage Completion Method for recognition of revenue instead of Project Completion Method followed by the Appellant. 3. Addition of Rs. 15,00,000 in respect of receipt of old project (Mauli Chayya) which was taxed

Amar Developers, Mumbai vs. Income Tax Officer, Ward 30(1)(1), Mumbai

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

ITA 1330/MUM/2023[2017-2018]Status: DisposedITAT Mumbai06 Jul 2023AY 2017-2018

Bench: Shri B.R. Baskaran (Am) & Shri Pavan Kumar Gadale (Jm)

cash deposited into the bank account. 2. The assessee is a partnership firm engaged in the business of construction. The assessee has followed project completion method for determining the total income. Accordingly, it filed its return of income for the year under consideration declaring NIL income. The Assessing Officer, however

DCIT Central Circle-3, Thane vs. Moreshwar Krushna Baria, Thane

ITA 2218/MUM/2022[2014-15]Status: DisposedITAT Mumbai28 Jun 2023AY 2014-15

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Subodh Ratnaparkhi, A.RFor Respondent: Smt. Riddhi Mishra, CIT D.R
Section 132Section 69C

order passed by co ordinate bench of Tribunal and keeping in view of the facts that the Revenue department has already accepted the project completion method of accounting in earlier years and subsequent years, this income has to be taxed in the years of completion. 34. The contention

DCIT Central Circle-3, Thane vs. Moreshwar Krushna Baria, Thane

ITA 2217/MUM/2022[2013-14]Status: DisposedITAT Mumbai28 Jun 2023AY 2013-14

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Subodh Ratnaparkhi, A.RFor Respondent: Smt. Riddhi Mishra, CIT D.R
Section 132Section 69C

order passed by co ordinate bench of Tribunal and keeping in view of the facts that the Revenue department has already accepted the project completion method of accounting in earlier years and subsequent years, this income has to be taxed in the years of completion. 34. The contention

Moreshwar Krushna Baria, Thane vs. Asst Comm of Income Tax Central Circle-3, Thane

ITA 1966/MUM/2022[2014-15]Status: DisposedITAT Mumbai28 Jun 2023AY 2014-15

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Subodh Ratnaparkhi, A.RFor Respondent: Smt. Riddhi Mishra, CIT D.R
Section 132Section 69C

order passed by co ordinate bench of Tribunal and keeping in view of the facts that the Revenue department has already accepted the project completion method of accounting in earlier years and subsequent years, this income has to be taxed in the years of completion. 34. The contention

Moreshwar Krushna Baria, Thane vs. Asst Comm of Income Tax Central Circle-3, Thane

ITA 1965/MUM/2022[2013-14]Status: DisposedITAT Mumbai28 Jun 2023AY 2013-14

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Subodh Ratnaparkhi, A.RFor Respondent: Smt. Riddhi Mishra, CIT D.R
Section 132Section 69C

order passed by co ordinate bench of Tribunal and keeping in view of the facts that the Revenue department has already accepted the project completion method of accounting in earlier years and subsequent years, this income has to be taxed in the years of completion. 34. The contention

Moreshwar Krushna Baria, Mumbai vs. Assistant Commissioner of Income Tax, Thane

ITA 1964/MUM/2022[2012-13]Status: DisposedITAT Mumbai28 Jun 2023AY 2012-13

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Subodh Ratnaparkhi, A.RFor Respondent: Smt. Riddhi Mishra, CIT D.R
Section 132Section 69C

order passed by co ordinate bench of Tribunal and keeping in view of the facts that the Revenue department has already accepted the project completion method of accounting in earlier years and subsequent years, this income has to be taxed in the years of completion. 34. The contention

Moreshwar Krushna Baria, Thane vs. Asst Comm of Income Tax Central Circle-3, Thane

ITA 1963/MUM/2022[2011-12]Status: DisposedITAT Mumbai28 Jun 2023AY 2011-12

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Subodh Ratnaparkhi, A.RFor Respondent: Smt. Riddhi Mishra, CIT D.R
Section 132Section 69C

order passed by co ordinate bench of Tribunal and keeping in view of the facts that the Revenue department has already accepted the project completion method of accounting in earlier years and subsequent years, this income has to be taxed in the years of completion. 34. The contention

Moreshwar Krushna Baria, Thane vs. Asst Comm of Income Tax Central Circle-3, Thane

ITA 1962/MUM/2022[2010-11]Status: DisposedITAT Mumbai28 Jun 2023AY 2010-11

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Subodh Ratnaparkhi, A.RFor Respondent: Smt. Riddhi Mishra, CIT D.R
Section 132Section 69C

order passed by co ordinate bench of Tribunal and keeping in view of the facts that the Revenue department has already accepted the project completion method of accounting in earlier years and subsequent years, this income has to be taxed in the years of completion. 34. The contention

Moreshwar Krushna Baria, Thane vs. ACIT Central Circle-3, Thane

ITA 1961/MUM/2022[2009-10]Status: DisposedITAT Mumbai28 Jun 2023AY 2009-10

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Subodh Ratnaparkhi, A.RFor Respondent: Smt. Riddhi Mishra, CIT D.R
Section 132Section 69C

order passed by co ordinate bench of Tribunal and keeping in view of the facts that the Revenue department has already accepted the project completion method of accounting in earlier years and subsequent years, this income has to be taxed in the years of completion. 34. The contention

Dy. Commissioner of Income Tax, CC, Vapi vs. Poonam Developers LLP, Dadra & Nagar Haveli (Ut)

In the result, these Cross-Objections Nos

ITA 320/SRT/2022[2019-20]Status: DisposedITAT Surat26 Jun 2023AY 2019-20

Bench: Shri Pawan Singh, Hon'Ble & Dr. A. L. Saini, Hon'Ble(Physical Court Hearing) Sl.

Section 143(3)

different decisions of jurisdictional High Court and Tribunals and hence liable to be deleted. 10.Further, where assessee, engaged in construction business, is following project completion method, its income could be brought to tax only in year when sale deeds of units sold were registered even though sale consideration/advance might have