“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

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

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

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

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

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

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

Dlf Limited, Delhi vs. National Faceless Assessment Centre, Delhi

In the result, appeal of the Revenue is dismissed

ITA 677/DEL/2024[2021-22]Status: DisposedITAT Delhi30 Oct 2025AY 2021-22

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 142(1)Section 143(2)Section 143(3)Section 14A

computed on the basis of percentage of completion method. On appeal, the CIT(A) deleted the said addition and inter-alia held that project completed method or CCM is a well-recognized method of accounting and is the only method suitable for any developer who has to deliver a completed ... ITAT. The relevant extracts of the aforesaid decision of Delhi High Court are reproduced as under: “8. It is well settled that the project completion method is one of the recognized methods of accounting. ….. 9. After the above judgments of the Supreme Court it cannot be said that the project

Dlf Limited, Delhi vs. National Faceless Assessment Centre, Delhi

In the result, appeal of the Revenue is dismissed

ITA 676/DEL/2024[2020-21]Status: DisposedITAT Delhi30 Oct 2025AY 2020-21

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 142(1)Section 143(2)Section 143(3)Section 14A

Dosti Realty Limited, Mumbai vs. DCIT, Circle-1(1)(1), Mumbai

In the result appeal filed by the assessee stands partly allowed

ITA 6129/MUM/2024[2017-18]Status: DisposedITAT Mumbai28 Oct 2025AY 2017-18

Bench: Smt. Beena Pillai () & Shri Arun Khodpia ()

Section 115JSection 14ASection 37(1)

Ld.DR relied on the orders passed by the authorities below. He submitted that though there is no revenue impact, however as per project completion method followed by the assessee, the expenditure has to be proportionately considered to determine the total income in the hands of the assessee from the activity

DCIT, Central Circle-1(3), Mumbai vs. Amardeep Constructions, Mumbai

In the result, appeal of the revenue bearing ITA No

ITA 3202/MUM/2025[2019-20]Status: DisposedITAT Mumbai13 Oct 2025AY 2019-20

Bench: Shri. Vikram Singh Yadav & Shri. Anikesh Banerjeedcit, Central Circle -1(3), Mumbai Amardeep Constructions Room No. 903, 9Th Floor, Pratishtha 7/08, Patidar Complex, Vs. Bhavan, M.K. Road, Mumbai Kannamwar Nagar No. 2, Near 400020 Vikas High School Vikhroli East, Mumbai 400083 स्थायीलेखासं./जीआइआरसं./Pan/Gir No: Aaufa3513A (Appellant) (Respondent) निर्ााररतीकीओरसे/ Assessee By: Shri. J.P. Bairagra& Ms. Rupa Nanda /Revenue By: Shri. Surendra Mohan (Sr. Dr)

For Appellant: Shri. J.P. Bairagra& Ms. Rupa NandaFor Respondent: Shri. Surendra Mohan (SR. DR)

Section 131Section 133ASection 143(3)Section 250Section 43C

holding that Section 43CB of the Income Tax Act, 1961, was inapplicable to the assesse merely because the assesse had historically followed the Project Completion Method, without appreciating that substantial sales had occurred and income had in fact accrued during the relevant year, and that the principle of consistency ... Whether on facts and in law, the Ld. CIT(A) erred in holding that the assesse was entitled to continue following the Project Completion Method (PCM) despite substantial progress in construction and execution of agreements for sale, thereby failing to recognize real income that had accrued during the year

Trine Infracon LLP, Ahmedabad vs. The Dy.CIT, Circle-3(2), Ahmedabad

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

ITA 1397/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad30 Sept 2025AY 2017-18

Bench: Dr. B Before Dr. B.R.R. Kumar Kumar, , , , Vice Vice-Before Before Dr. B Dr. B Kumar Kumar Viceshri Siddhartha Nautiyal Shri Siddhartha Nautiyalshri Siddhartha Nautiyal Shri Siddhartha Nautiyaltrine Infracon Llp, Vs. C/O. Divyang Shah & Co., Dcit, Chartered Accountants, Circle 3(2), 201, Devashish Complex, Nr. Ahmedabad Regenta Central Antarim Hotel, Off. Cg Road, Ahmedabad-380009 [Pan :Aajft 2084 N] (Appellant Appellant Appellant) Appellant .. (Respondent Respondent Respondent) Respondent Appellant By : Appellant By : Appellant By : Appellant By : Shri Maulik Kansara, Ar Respondent By Respondent By: Respondent By Respondent By Shri Abhijit, Sr. Dr Date Of Hearing Date Of Hearing 18.09.2025 Date Of Hearing Date Of Hearing Date Of Pronouncement Date Of Pronouncement Date Of Pronouncement Date Of Pronouncement 30.09.2025

For Appellant: Appellant byFor Respondent: Respondent by Respondent by Shri Abhijit, Sr. DR

Section 250Section 69A

IN IN THE INCOME TAX APPELLATE IN IN THE INCOME TAX APPELLATE THE INCOME TAX APPELLATE TRIBUNAL THE INCOME TAX

DCIT, Central Circle 7(1), Mumbai vs. Sheth Realtors, Mumbai

In the result, appeal of the assessee is partly allowed

ITA 4008/MUM/2025[2017-18]Status: DisposedITAT Mumbai30 Sept 2025AY 2017-18

Bench: Shri Amit Shukla & Shri Girish Agrawalassessment Year: 2017-18 Sheth Realtors Income-Tax Officer-7(1) Vasant Oasis, Site Office, [Erstwhile Ito-23(3)(3)] Upper Basement, Mumbai Cts No 345A 1 To 3, Vs. 345A 5 To 6, Makwana Road, Marol, Andheri East., Mumbai – 400059 [Pan: Aavfa3975F] (Appellant) (Respondent) Assessment Year: 2017-18 Deputy Commissioner Of Sheth Realtors Income-Tax, Central Circle 12Th Floor, Hallmark Business 7(1), Vs. Plaza, Sant Dyaneshwar Marg Mumbai Bandra (East), Mumbai - 400051 [Pan: Aavfa3975F] (Appellant) (Respondent) Present For: Assessee : Dr. K. Shivaram, Sr. Advocate & Shri Rahul Hakani, Advocate Revenue : Shri Leyaqat Ali Aafaqui, Sr. Dr Date Of Hearing : 07.08.2025 Date Of Pronouncement : 30.09.2025 O R D E R Per Girish Agrawal: These Two Appeals Filed By Assessee & Revenue Are Against The Order Of Ld. Cit (A) 49, Mumbai, Vide Order No. Itba/Apl/S/250/2024- Assessment Year 2017-18 25/1075205796(1), Dated 28.03.2025, Passed Against The Assessment Order By Income-Tax Officer, Ward-23(3)(3), Mumbai, U/S. 143(3) Of The Income-Tax Act (Hereinafter Referred To As The “Act”), Dated 30.12.2019 For Assessment Year 2017-18. 2. Grounds Taken By Assessee & Revenue Are Reproduced As Under: I. Ita No. 2712/Mum/2025 [Assessee]

For Appellant: Dr. K. Shivaram, Sr. Advocate and Shri Rahul Hakani, AdvocateFor Respondent: Shri Leyaqat Ali Aafaqui, Sr. DR

Section 133(6)Section 139(1)Section 143(3)Section 2(24)(x)

circumstances of the case and in law, the Ld. CIT(A) erred in relying solely on the assessee's historical practice of following project completion method, disregarding the retrospective application of Section 43CB from 01.04.2017, and the fact that revenue recognition principles cannot be static where factual and statutory changes ... together deal with change in the method of accounting followed by the assessee. Ld. Assessing Officer had applied percentage completion method instead of project completion method for computing business income from real estate project undertaken by the assessee. Second issue is through ground no.7, whereby interest income of Rs.6

Sheth Realtors, Mumbai vs. ITO-7(1) (Erstwhile ITO-23(3)(3), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 2712/MUM/2025[2017-18]Status: DisposedITAT Mumbai30 Sept 2025AY 2017-18

For Appellant: Dr. K. Shivaram, Sr. Advocate and Shri Rahul Hakani, AdvocateFor Respondent: Shri Leyaqat Ali Aafaqui, Sr. DR

Section 133(6)Section 139(1)Section 143(3)Section 2(24)(x)

Allied Construction Company, Malad vs. Income Tax Officer - 30 (1) (1), Bandra

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

ITA 4121/MUM/2025[2012-13]Status: DisposedITAT Mumbai23 Sept 2025AY 2012-13

Bench: Shri Vikram Singh Yadav & Shri Raj Kumar Chauhanassessment Year : 2012-13 M/S. Allied Construction Ito-30(1)(1), Company, C-13, 5Th Floor, 4&5, Sai Zarukha Vs. Pratyakshakar Bhavan, B.J. Patel Road, Bandra East, Malad (West), Mumbai-400051. Mumbai-400064. Pan : Aapfa8255N (Appellant) (Respondent) Assessee By : Shri Jose Pulikkoden Revenue By : Shri Surendra Mohan, Sr.Dr

For Appellant: Shri Jose PulikkodenFor Respondent: Shri Surendra Mohan, Sr.DR

Section 133ASection 271(1)(c)

evidencing transparency and absence of mens rea. 6. The Ld. CIT(A) erred in not appreciating the fact that the Appellant followed the project completion method and that the profit is to be arrived at on completion of the project when the amount of Rs. 3,51,10,500/- being

Sumatinath Builders, Nallasopara vs. ACIT, Circle 4, Thane

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

ITA 4685/MUM/2025[2015-16]Status: DisposedITAT Mumbai15 Sept 2025AY 2015-16

Bench: Shri Om Prakash Kantms Suchitra Kamblesumatinath Builders, Vs. The Assistant Commissioner Shop No.1, Of Income Tax, Jay Vijay Nagari-1, Circle-4, Virar Link Road, Thane. Nallasopara, Vasai-Virar Dist. Thane-401209. Maharashtra. [Pan :Abdfs6440 E] (Appellant) .. (Respondent) Appellant By : None Respondent By: Ms Kavitha Kaushik, Sr. Dr Date Of Hearing 09.09.2025 Date Of Pronouncement 15.09.2025 O R D E R Per Suchitra Kamble:

For Appellant: NoneFor Respondent: Ms Kavitha Kaushik, Sr. DR

Section 133ASection 139(1)Section 143(2)Section 271(1)(c)Section 43CSection 68

loss accounts by the assessee-firm for the year under consideration. The reply of the assessee was that the assessee- firm is following Project Completion Method for the said project and therefore, all the sales will be booked at the time of completion of the project. Vide letter dated

Navkar Goa Corporation, Mumbai vs. Deputy Commissioner of Income Tax, Central Wing Central Circle

In the result, the appeal by the assessee is partly allowed

ITA 3529/MUM/2025[2017-18]Status: DisposedITAT Mumbai12 Sept 2025AY 2017-18

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhailnavkar Goa Corporation, 810 Raheja Centre Free Press Journal Marg Nariman Point, Mumbai-400021. ............... Appellant Pan : Aagfn2313K V/S Deputy Commissioner Of Income Tax, ……………… Respondent Room No. 1923, 19Th Floor, Air India Building Nariman Point, Mumbai – 400021. Assessee By : Shri Aditya Sharma Revenue By : Shri Leyaqat Ali Aafaqui, Sr.Dr

For Appellant: Shri Aditya SharmaFor Respondent: Shri Leyaqat Ali Aafaqui, Sr.DR

Section 142(1)Section 143(2)Section 143(3)Section 250

without appreciating that the said provision was made on a scientific and consistent basis in accordance with the matching principle in line with project completion method. 2. That the learned CIT(A) erred in confirming the disallowance of ₹ 1,00,00,000 being provision created towards anticipated legal claims, without

Aashirwad Builders, Rajkot vs. Deputy Commissioner of Income-Tax, Circle 1(1), Rajkot

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

ITA 66/RJT/2024[2015-2016]Status: DisposedITAT Rajkot11 Sept 2025AY 2015-2016

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinha

For Appellant: Shri Sumit Shingala, ARFor Respondent: Shri Abhimanyu Singh Yadav, Sr.DR

Section 142(1)Section 143(2)Section 143(3)Section 250

forming part of Profit & Loss A/c., requiring no separate effect to be given to the Total Income. In case of a Builder, following Project Completion Method, the accumulated stock gets reduced when corresponding Sales is effected and recognized in P&L. It is obvious and ostensible that upon Sale being ... matter in appeal before the Ld. CIT(A) who has confirmed the action of the assessing officer, observing as follows: “Taxpayer follows the Project Completion Method. This means profit or in this case sale is booked only when actual sale takes place. Here in taxpayers case "SALE" is the catch

Vijay Tukaram Raundal, Pune vs. The Deputy Commissioner of Income Tax, Central Circle-1(2), Pune

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

ITA 1637/PUN/2024[2020-21]Status: DisposedITAT Pune03 Sept 2025AY 2020-21

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

For Appellant: Shri Mihir NaniwadekarFor Respondent: Shri Amit Bobde, CIT

Section 115JSection 131Section 133ASection 271(1)(c)Section 80I

claimed in respect of housing project namely ‘Teerth Towers’ which consisted of 7 buildings and commercial shops. The assessee had been following project completion method by recognizing the income, as a result of which all the expenses incurred on the project till the immediately preceding financial year were shown

Vijay Tukaram Raundal, Pune vs. The Deputy Commissioner of Income Tax, Central Circle-1(2), Pune

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

ITA 1636/PUN/2024[2015-16]Status: DisposedITAT Pune03 Sept 2025AY 2015-16

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

For Appellant: Shri Mihir NaniwadekarFor Respondent: Shri Amit Bobde, CIT

Section 115JSection 131Section 133ASection 271(1)(c)Section 80I

Vijay Tukaram Raundal, Pune vs. The Deputy Commissioner of Income Tax, Central Circle-1(2), Pune

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

ITA 1635/PUN/2024[2014-15]Status: DisposedITAT Pune03 Sept 2025AY 2014-15

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

For Appellant: Shri Mihir NaniwadekarFor Respondent: Shri Amit Bobde, CIT

Section 115JSection 131Section 133ASection 271(1)(c)Section 80I

Vijay Tukaram Raundal, Pune vs. The Deputy Commissioner of Income Tax, Central Circle-1(2), Pune

ITA 1634/PUN/2024[2013-14]Status: DisposedITAT Pune03 Sept 2025AY 2013-14

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

For Appellant: Shri Mihir NaniwadekarFor Respondent: Shri Amit Bobde, CIT

Section 115JSection 131Section 133ASection 271(1)(c)Section 80I

claimed in respect of housing project namely ‘Teerth Towers' which consisted of 7 buildings and commercial shops. The assessee had been following project completion method by recognizing the income, as a result of which all the expenses incurred on the project till the immediately preceding financial year were shown

Ambrosia Realty, Vadodara vs. The ITO, Ward-1(3)(1), Vadodara

In the result, appeal filed by the assessee is allowed in above

ITA 2043/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad27 Aug 2025AY 2016-17

For Appellant: Shri Saurabh Soparkar, ARFor Respondent: Shri Hargovind Singh, Sr.DR

Section 234ASection 250Section 271(1)(c)

appellant. Ld. CIT (A) (NFAC) erred in law and on facts not appreciating submission that the appellant has already offered income on project completion method in subsequent years & the addition made during the year on percentage completion basis will tantamount to double taxation of the same income ... method of accounting followed by the assessee for revenue recognition. While the assessee had contended that it was recognizing revenue following the project completion method and in terms of the guidelines provided by Accounting Standard-9 ('AS-9') pertaining to Revenue recognition issued by the Institute of Chartered Accountants

The Dy.CIT, Central Circle-1, Vadodara vs. Pawan Edifice Pvt. Ltd., Vadodara

Appeals are partly allowed for

ITA 529/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad20 Aug 2025AY 2013-14

For Appellant: Ms. Amrin Pathan, ARFor Respondent: Shri Ashok Kumar Suthar, Sr. DR

Section 115JSection 139(1)Section 143(2)Section 143(3)Section 14ASection 36Section 68Section 80G

advances were booking advances for purchase of units and that the recipients had shown the amounts as income in their books under the project completion method. The learned CIT(A) observed that no corroborative evidence, such as agreements, ledger narrations identifying projects, or confirmations from the recipients, was placed

Pawan Edifice Pvt. Ltd., Vadodara vs. The Dy.CIT, Circle-2(1)(2), Vadodara

Appeals are partly allowed for

ITA 478/AHD/2023[2014-15]Status: DisposedITAT Ahmedabad20 Aug 2025AY 2014-15

Bench: Ms Suchitra Kamble

For Appellant: Ms. Amrin Pathan, ARFor Respondent: Shri Ashok Kumar Suthar, Sr. DR

Section 115JSection 139(1)Section 143(2)Section 143(3)Section 14ASection 36Section 68Section 80G

Pawan Edifice Pvt. Ltd., Vadodara vs. The Dy.CIT, Circle-2(1)(2), Vadodara

ITA 477/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad20 Aug 2025AY 2013-14

For Appellant: Ms. Amrin Pathan, ARFor Respondent: Shri Ashok Kumar Suthar, Sr. DR

Section 115JSection 139(1)Section 143(2)Section 143(3)Section 14ASection 36Section 68Section 80G

ITO-41(3)(2), Mumbai vs. K S Chamankar Enterprises, Malad (E), Mumbai

In the result, appeal of the Revenue is dismissed

ITA 4586/MUM/2024[2012-13]Status: DisposedITAT Mumbai19 Aug 2025AY 2012-13

Bench: Shri Saktijit Dey & Shri Prabhash Shankarincome Tax Officer, Ward V/S. K S Chamankar Enterprises, – 41(3)(2), Room No. 851, बनाम B-15, Pethe Nagar, Kedarmal 8Th Floor, Kautilya Bhavan, Road, Malad(E), Mumbai – Bandra Kurla Complex, 400097, Maharashtra Bandra (East), Mumbai 400051, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aagfk5823R Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Bharat Raichandani, Adv. [virtually appear]For Respondent: Shri Ritesh Mishra,(CIT-DR)

Section 143(3)Section 147Section 28

expenditure. Therefore, there was in fact a resultant loss. The assessee was stated to be following Project Completion method of accounting. In P a g e | 4 A.Y. 2012-13 K S Chamankar Enterprises, Mumbai this regard, reliance was also placed on the decision of hon’ble Apex Cpurt