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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

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Kaizen Enterprises Pvt. Ltd., Kota

In the result, appeal of the Revenue is dismissed

ITA 390/JPR/2024[2017-18]Status: DisposedITAT Jaipur18 Feb 2025AY 2017-18

Bench: Dr. S. Seethalakshmi & Shri Gagan Goyalm/S. Kaizen Enterprises Pvt. Ltd., Opera Hospital Road, S-67-68, Indra Vihar, Kota- 324005 Pan No.: Aabck 7751L ...... Appellant Vs. Acit, Central Circle, Kota ...... Respondent Acit, Circle-2, Kota ...... Appellant Vs. M/S. Kaizen Enterprises Pvt. Ltd., Opera Hospital Road, S-67-68, Indra Vihar, Kota- 324005 Pan No.: Aabck7751L ...... Respondent

For Appellant: Mr. Mahendra Gargieya, Adv. &For Respondent: Ms. Alka Gautam, CIT-DR, Ld. DR
Section 132Section 143(3)Section 153ASection 250

assessee on the other hand as per AS-9 the assessee is consistently following the method and calculating its profits on project completion method this fact is not under challenged either by the revenue or by the assessee. 14. It is also being to our notice that the assessee ... already offered to tax the income earned from the Project Completion Method in subsequent A.Y 2016- 17 and A.Y 2017-18. We have perused the specimen agreement between the assessee and buyers vide PB 57 -64 (relevant clauses 27,28,29,32 and 36) "27. It is also decided

Kaizen Entreprises Pvt. Ltd., Kota vs. ACIT-DCIT, Central Circle, Kota

In the result, appeal of the Revenue is dismissed

ITA 156/JPR/2024[2013-14]Status: DisposedITAT Jaipur18 Feb 2025AY 2013-14

Bench: Dr. S. Seethalakshmi & Shri Gagan Goyalm/S. Kaizen Enterprises Pvt. Ltd., Opera Hospital Road, S-67-68, Indra Vihar, Kota- 324005 Pan No.: Aabck 7751L ...... Appellant Vs. Acit, Central Circle, Kota ...... Respondent Acit, Circle-2, Kota ...... Appellant Vs. M/S. Kaizen Enterprises Pvt. Ltd., Opera Hospital Road, S-67-68, Indra Vihar, Kota- 324005 Pan No.: Aabck7751L ...... Respondent

For Appellant: Mr. Mahendra Gargieya, Adv. &For Respondent: Ms. Alka Gautam, CIT-DR, Ld. DR
Section 132Section 143(3)Section 153ASection 250

assessee on the other hand as per AS-9 the assessee is consistently following the method and calculating its profits on project completion method this fact is not under challenged either by the revenue or by the assessee. 14. It is also being to our notice that the assessee ... already offered to tax the income earned from the Project Completion Method in subsequent A.Y 2016- 17 and A.Y 2017-18. We have perused the specimen agreement between the assessee and buyers vide PB 57 -64 (relevant clauses 27,28,29,32 and 36) "27. It is also decided

Jitendra Shankerlal Brahmbhatt, Mumbai vs. Asstt Comm. of Income Tax, Mumbai

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

ITA 6705/MUM/2024[2018-19]Status: DisposedITAT Mumbai14 Feb 2025AY 2018-19

Bench: SHRI. OM PRAKASH KANT (Accountant Member), MS. KAVITHA RAJAGOPAL (Judicial Member)

For Appellant: Shri. Rahul HakkaniFor Respondent: Shri. Manish Saresh (CIT-DR)
Section 139(1)Section 143(2)Section 250Section 36(1)(iii)Section 40Section 68

which TDS was deducted but deposited late without appreciating that as the Assessee is a builder and following project completion method no disallowance u/s 40(a)(ia) is called for and hence the addition of Rs 10,81,34,955/- may be deleted. 2.2) The Learned CIT(A) erred

M/S. Bhakti Enterprises, Mumbai vs. Income Tax Officer 3(1), Kalyan

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

ITA 3974/MUM/2024[2012-13]Status: DisposedITAT Mumbai11 Feb 2025AY 2012-13

Bench: Shri Amarjit Singhshri Sandeep Singh Karhailm/S Bhakti Enterprises, Jai Maharashtra Building, Opp. Namaskar Mandal, Agra Road, Kalyan West, Thane-421301 ……………. Appellant Pan: Aaffb8767 J V/S Ito 3(1), ……………. Respondent Kalyan, Maharashtra-421301. Assessee By :Mr. H.N. Motiwalla, Ar Revenue By : Ms. Monika Pande, Sr.Dr

For Appellant: Mr. H.N. Motiwalla, ARFor Respondent: Ms. Monika Pande, Sr.DR
Section 142(1)Section 143(2)Section 250Section 40A(3)

Bhakti Enterprises 3 Upon perusal of the audit report, it was observed that the assessee follows the Project Completion Method. The assessee also submitted the comments and certificate in completion certificate from the Kalyan Development and Municipal Corporation (“KDMC”) for the project. After perusal of the details filed ... cost of construction should be taken on an actual basis instead of a hypothetical cost. The assessee submitted that it is following the Project Completion Method and has filed its return of income on the basis of books of accounts maintained up to the assessment year

The Assistant Commissioner of Income Tax, Circle-1(1)(1), Dehradun vs. Senior Citizen Home Complex Welfare Society, Greater Noida

ITA 9/DDN/2022[2000-2001]Status: DisposedITAT Dehradun27 Jan 2025AY 2000-2001

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra(Through Video Conferencing)

Section 145(3)Section 153A

books of accounts of the assessee and observing that expenses have been inflated. The appellant submitted that the books of accounts are maintained, project completion method followed, no incriminating documents could be found during search, still the addition has been made on estimation basis. The appellant submits that the society

The Assistant Commissioner of Income Tax, Circle-1(1)(1), Dehradun vs. Senior Citizen Home Complex Welfare Society, Greater Noida

ITA 8/DDN/2022[1999-2000]Status: DisposedITAT Dehradun27 Jan 2025AY 1999-2000

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra(Through Video Conferencing)

Section 145(3)Section 153A

books of accounts of the assessee and observing that expenses have been inflated. The appellant submitted that the books of accounts are maintained, project completion method followed, no incriminating documents could be found during search, still the addition has been made on estimation basis. The appellant submits that the society

ITO, Kolkata vs. Harmony Vinimay Pvt Ltd, Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 1978/KOL/2024[2018]Status: DisposedITAT Kolkata15 Jan 2025

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm Ito, Kolkata Harmony Vinimay Pvt. Ltd. Ward11(1), P-7, Chowringhee Square, 6 Th Floor, 67, Chistopher Road, Kolkata Vs. Kolkata-700069 West Bengal West Bengal (Appellant) (Respondent) Pan No. Aacch3211P Assessee By : Shri S.K. Tulsiyan & Smt Puja Somai, Ars Revenue By : Shri Prakash Nath Barnwal, Dr Date Of Hearing: 07.01.2025 Date Of Pronouncement : 15.01.2025

For Appellant: Shri S.K. Tulsiyan and Smt PujaFor Respondent: Shri Prakash Nath Barnwal, DR
Section 143(1)

expenses and area/revenue of the project was agreed to be shared with the other co-owners of the land. The assessee was following project completing method of accounting and accordingly, all the direct and indirect expenses incurred have been transferred to project work-in- progress account and the advances received ... recognition of revenue under POCM, whereas in the scrutiny proceedings of the immediately preceding year, the AO had accepted AS-9 and Project Completion method of accounting. The appellant has established that it is regularly following ‘Project Completion method’ of accounting and AS-9 for recognition of revenue w.r.t ALTIUS

Aryacon Contractors and Engineers Pvt Ltd, Perumbavoor vs. Assistant Commissioner of Income Tax, Circle-1, Aluva

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

ITA 853/COCH/2023[AY 2017-2018]Status: DisposedITAT Cochin06 Jan 2025

Bench: Shri Prashant Maharishi & Shri Keshav Dubeyassessmentyear:2017-18

For Appellant: Shri. Thomas Joseph, CAFor Respondent: Smt. Leena Lal, Snr AR
Section 143(2)Section 143(3)Section 250Section 43C

arising from a contract for providing services,— (i) with duration of not more than ninety days shall be determined on the basis of project completion method; (ii) involving indeterminate number of acts over a specific period of time shall be determined on the basis of straight line method ... purposes of percentage of completion method, project completion method or straight line method referred to in sub-section (1)— (i) the contract revenue shall include retention money; (ii) the contract costs shall not be reduced by any incidental income in the nature of interest, dividends or capital gains.” The above

Sms Concast Ag, New Delhi vs. ACIT, (International Taxation), Circle- 3(1)(2), New Delhi

In the result, all the three appeals of AYs 2015-16, 2016-17 & 2017-18

ITA 2695/DEL/2018[2014-15]Status: DisposedITAT Delhi06 Jan 2025AY 2014-15

Bench: Shri Saktijit Dey & Shri S.Rifaur Rahmanddit, Circle 2 (2), Vs. Sms Siemag Ag, New Delhi. C/O Mohinder Puri & Co., 1A-1D, Vandhna, 11, Tolstoy Marg, New Delhi – 110 01. (Aadcs1173J) Sms Siemag Ag, Vs. Ddit, Circle 2 (2), C/O Mohinder Puri & Co., New Delhi. 1A-1D, Vandhna, 11, Tolstoy Marg, New Delhi – 110 01. (Aadcs1173J)

For Appellant: Shri Percy Pardiwalla, Sr. AdvocateFor Respondent: Shri Vijay B Vasanta, CIT DR
Section 142(1)Section 143(1)Section 148

other aspect of the issue. It is the case of the assessee that the revenue from onshore supervisory services, is recognized based on project completion method followed year by year. It is the specific case of the assessee that since the project in respect of which it has received

The ITO, Ward-1(3)(5), Ahmedabad vs. Sainath Land Developers, Ahmedabad

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

ITA 441/AHD/2020[2015-16]Status: DisposedITAT Ahmedabad31 Dec 2024AY 2015-16

Bench: Shri Tr Senthil Kumar & Shri Narendra Prasad Sinhaआयकर अपील सं./Ita No. 441/Ahd/2020 िनधा"रण वष"/Asstt. Year: 2015-2016 The Income Tax Officer, Sainath Land Developers, बनामVs. Ward-1(3)(5), 207, Nirman House, Ahmedabad. Nr. Sardar Patel Under Bridge, Usmanpura, Ahmedabad-380013. Pan: Absfs3435Q

For Appellant: Shri Pritesh L Shah, ARFor Respondent: Shri Rignesh Das, Sr. DR
Section 143(3)

Under the circumstances, the AO was not correct in rejecting the accounting method of percentage completion consistently followed by the assessee and applying project completion method in the current year. The Ld. AR submitted since the income from sale of Rs.4,20,11,458/- disclosed in the current year

Pyramid Developers, Mumbai vs. The Deputy Comm. of Income Tax Circle 32(1), Mumbai

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

ITA 2409/MUM/2023[AY 2015-16]Status: DisposedITAT Mumbai20 Dec 2024

Bench: Shri Kuldip Singh & Shri Gagan Goyalpyramid Developers, 2Nd Floor, Sharda Bhavan, Nanda Patkar Road, Vile Parle (E) Mumbai- 400 005, Pan: Aaifp1958J ...... Appellant Vs. Dcit Circle 32(1), Kautilya Bhavan, Bandra Kurla Complex, Bandra (East) Mumbai-400 051 ..... Respondent

For Appellant: Shri Piyush Chajed a/w VeetragFor Respondent: Shri H. M. Bhatt, Ld. DR
Section 142(1)Section 250Section 43CSection 53A

Commissioner of Income Tax (Appeals), NFAC erred in confirming the addition of Rs.5, 29, 67,033/- without appreciating that the appellant followed Project completion method. The same income is offered in AY 2017-18. Therefore, the said addition is resultant in double taxation. The appellant craves leaves

DCIT CC 7(4), Mumbai vs. Poddar Renaissance Reality Pvt Ltd (Now Known As Imperial Renaissaice Reniasance Reality Pvt. Ltd), Mumbai

In the result, the appeal of the In the result, the appeal of the Revenue is partly allowed

ITA 2045/MUM/2019[2012-13]Status: DisposedITAT Mumbai20 Dec 2024AY 2012-13

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhaildcit, Cc-7(4), Mumbai V/S. Poddar Renaissance Reality Room No. 659, Aaykar बनाम Pvt. Ltd. (Now Known As Bhavan, M.K. Road, Imperial Renaissance Mumbai-400020 Renaissance Reality Pvt. Ltd.) 501/601, Aqua Marine, Carter Road, Mumbai-400050030 "थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aagcp2657R Appellant/अपीलाथ" .. Respondent/"ितवादी

For Appellant: Mr. Rishabh MehtaFor Respondent: Mr. R. A. Dhyani
Section 143Section 143(3)Section 68Section 69

moment, taxed. Suffice it to say at the moment, the assessee is following project the assessee is following project completion method and, therefore, all amounts, l.e., amounts received in completion method and, therefore, all amounts, l.e., amounts received in completion method and, therefore, all amounts, l.e., amounts received in cash

DCIT-Central Circle-7(1), Mumbai vs. Royal India Corporation Limited, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 5003/MUM/2024[2015-16]Status: DisposedITAT Mumbai22 Nov 2024AY 2015-16

Bench: Smt. Beena Pillai & Shri Prabhash Shankar

For Appellant: Shri Sharwan Kumar Jha,ARFor Respondent: Shri R. R. Makwana (Sr. DR)
Section 143(3)Section 68

reflected in assesses bank account. As regards Nil return filed by SDPL, it was observed in para 11 that the company was following Project completion method of accounting being engaged in the business of real estate. The expenses incurred every year were added to the Work-in Progress

Assistant Commissioner of Income Tax, Circle - 7(1), Kolkata vs. Ashiana Housing Limited, Kolkata

In the result, with these remarks, the appeal filed by the Revenue is dismissed

ITA 1391/KOL/2023[2018-2019]Status: DisposedITAT Kolkata18 Nov 2024AY 2018-2019

Bench: Sri Rajpal Yadav, Vice- & Sri Sanjay Awasthi

Section 43C

after such handing over of possession. It has been stated that the revenue from this real estate development business was recognized on the project completion method and provision was made for expenses to be incurred in respect of the projects which were already completed in the year under consideration ... averred, since these expenses were pertaining to the projects, the revenue of which was recognized in the year under consideration by following the project completion method, the deduction for the same was appropriately claimed in the accounts. The ld. A/R pointed out that this issue dates back to several preceding

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

arising from a contract for providing services, - (i)with duration of not more than ninety days shall be determined on the basis of project completion method; (ii)involving indeterminate number of acts over a specific period of time shall be determined on the basis of straight line method ... purposes of percentage of completion method, project completion method or straight line method referred to in sub-section (1)- (i)the contract revenue shall include retention money; (ii)the contract costs shall not be reduced by any incidental income in the nature of interest, dividends or capital gains

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)

account. The ITA Nos. 1370/Ahd/2024 (ITO vs. Aman Enterprise)A.Y.– 2018-19- 3 – assessee had merely submitted that it was following project completion method but the reason for not disclosing service receipt in the P&L account was not properly explained. Therefore, the same was added to income ... advance received from prospective buyers, which was appearing as current liabilities in the balance sheet. Further that since the assessee was following project completion method, the advance was not booked as revenue in the current year. The Ld. CIT(A) had correctly appreciated the facts of the case and given

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

explained that for the A.Y. 2016-17 and 2018-19 the case was selected for scrutiny and the 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 ... wherein the specific query was raised for accounting for practice adopted in the assessment proceedings. After various submissions against query raised, the Project Completion Method was accepted in speaking order by AO u/s 143(3) of the 1.T act. The order is already filed before your honour earlier [Copy

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

case for Assessment Year 2011 – 12 wherein the issue of determination of the profits of the assessee company by applying the project completion method or percentage completion method is discussed. It was held that assessee is realistic developer engaged in the business of developing housing projects at Navi Mumbai ... assessee is declaring the income under the project completion method for its projects. These projects commenced on 9/3/2010. The learned Assessing Officer has rejected the project completion method and held that only the percentage completion method should be adopted. The learned CIT–A that the income of the assessee

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)

regarding merits of the case, we do not find any reason as to why the AO had rejected the project completion method of accounting regularly employed by the assessee and had estimated the income on Percentage Completion basis in this year. The AO has neither doubted the correctness ... this year. The contention of the assessee is that it was a builder and not a contractor nor a developer. Therefore, the Project Completion Method was rightly adopted by it to recognize the revenue as per Accounting Standard -9. According to the assessee, the Accounting Standard-7 was not applicable

M/S Sahara States, Bhopal vs. The DCIT 1(1), Bhopal

In the result, both appeals of the assessee are allowed for statistical purposes

ITA 22/IND/2012[2008-09]Status: DisposedITAT Indore27 Sept 2024AY 2008-09

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani&

Section 143(3)Section 801B(10)Section 80I

following manner: “36. There is yet another reason for coming to the aforesaid conclusion. Take a scenario where an Assessee, following the project completion method of accounting, has completed the housing project approved by the local authority complying with all the conditions as set out in section