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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

M/S Malubu Estate Pvt. Ltd., New Delhi vs. Addl. CIT, New Delhi

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

ITA 3295/DEL/2013[2008-09]Status: DisposedITAT Delhi12 Aug 2021AY 2008-09

Bench: Shri O.P. Kant & Shri K. Narasimha Charyassessment Year:2008-09

For Appellant: Sh. Anil Kumar Chopra, AdvFor Respondent: Ms. Paramita M. Biswas, CIT/DR

same by order dated 13.12.2013 for the assessment year 2007-08 (ITA No. 2778/Del/2011), upheld the contention of the assessee that the project completion method followed by the assessee will not result in deferment of tax and there is no justification for the Ld. Assessing Officer to adopt POC method

Roop Kumar Bansal, Gurgaon vs. Pr, CIT (Central), Gurgaon

In the result, ITA.No.383/Del

ITA 386/DEL/2021[2017-18]Status: DisposedITAT Delhi31 May 2021AY 2017-18

Bench: Shri Bhavnesh Saini & Shri O.P.Kant

For Appellant: And Shri Lalit Mohan, C.AFor Respondent: Shri Satpal Gulati, CIT-DR
Section 132Section 139(1)Section 142(1)Section 143(2)Section 143(3)Section 153B(1)(b)Section 263

case of assessee because assessee is an Investor who has made investment in the Villas. Merely because MIPL has offered the profit under Project Completion Method [“POCM”] in assessment year under appeal, it cannot be presumed that assessee tried to evade the taxes. The Learned PCIT has merely re-appreciated

Shri Basant Bansal, Gurgaon vs. Pr, CIT (Central), Gurgaon

In the result, ITA.No.383/Del

ITA 385/DEL/2021[2017-18]Status: DisposedITAT Delhi31 May 2021AY 2017-18

Bench: Shri Bhavnesh Saini & Shri O.P.Kant

For Appellant: And Shri Lalit Mohan, C.AFor Respondent: Shri Satpal Gulati, CIT-DR
Section 132Section 139(1)Section 142(1)Section 143(2)Section 143(3)Section 153B(1)(b)Section 263

case of assessee because assessee is an Investor who has made investment in the Villas. Merely because MIPL has offered the profit under Project Completion Method [“POCM”] in assessment year under appeal, it cannot be presumed that assessee tried to evade the taxes. The Learned PCIT has merely re-appreciated

Pankaj Bansal, Gurgaon vs. Pr, CIT (Central), Gurgaon

In the result, ITA.No.383/Del

ITA 384/DEL/2021[2017-18]Status: DisposedITAT Delhi31 May 2021AY 2017-18

Bench: Shri Bhavnesh Saini & Shri O.P.Kant

For Appellant: And Shri Lalit Mohan, C.AFor Respondent: Shri Satpal Gulati, CIT-DR
Section 132Section 139(1)Section 142(1)Section 143(2)Section 143(3)Section 153B(1)(b)Section 263

case of assessee because assessee is an Investor who has made investment in the Villas. Merely because MIPL has offered the profit under Project Completion Method [“POCM”] in assessment year under appeal, it cannot be presumed that assessee tried to evade the taxes. The Learned PCIT has merely re-appreciated

Abha Bansal, Gurgaon vs. PCIT, Central, Gurgaon

In the result, ITA.No.383/Del

ITA 383/DEL/2021[2017-18]Status: DisposedITAT Delhi31 May 2021AY 2017-18

Bench: Shri Bhavnesh Saini & Shri O.P.Kant

For Appellant: And Shri Lalit Mohan, C.AFor Respondent: Shri Satpal Gulati, CIT-DR
Section 132Section 139(1)Section 142(1)Section 143(2)Section 143(3)Section 153B(1)(b)Section 263

case of assessee because assessee is an Investor who has made investment in the Villas. Merely because MIPL has offered the profit under Project Completion Method [“POCM”] in assessment year under appeal, it cannot be presumed that assessee tried to evade the taxes. The Learned PCIT has merely re-appreciated

Addl. CIT, New Delhi vs. M/S. Ircon International Ltd., New Delhi

In the result, the appeal of the Revenue is accordingly dismissed

ITA 3768/DEL/2017[2009-10]Status: DisposedITAT Delhi22 Jan 2021AY 2009-10

Bench: Shri Amit Shukla & Shri O.P. Kant[Through Video Conferencing]

Section 143(3)Section 148

issue of notice dated 24/09/2009 (within four years from the end of the relevant assessment year). The original assessment was completed on project completion method, whereas in the reasons recorded by the Assessing Officer recorded that the assessment should have been completed on percentage completion method. The Hon’ble High