S. 145 : Method of accounting-Project completion method-The Assessing Officer is not justified in rejecting the project completion method and estimating the income on percentage completion method- No addition can be made merely on the basis of sales shown in the GST return and Income tax return when the assessee is able to reconcile the difference. [S. 4]
The assessee is in the business of real estate. It followed the project completion method as the project is not completed the income was not shown in the return of income filed by the Assessee. In the course of assessment proceedings the Assessing Officer noticed huge difference of sales as shown in the GST return and in the income tax return. The assessee has explained the difference due to project completion method followed by the assesee as well as the different concept of sale for the GST and income tax. The Assessing Officer not satisfied with the explanation made difference as per GST return and sales as per regular book as income of the assessee. On appeal the CIT(A) deleted the addition accepting the project completion method followed by the assessee. On appeal by the Revenue, it was contended that the assesee should have offered the income on percentage completion method. The Honourable Tribunal analysing the provisions of GST, accounting standard and various judgements, affirmed the order of the CIT(A) deleting the addition. As regards other issues the matter was remanded to the file of the Assessing Officer. (ITA No. 3751/M/2023 dt. 30-9-2024)(AY. 2018-19)
ITO v. Reliable Builders and Developers (Mum.)(Trib.) www.itatonline.org
(Coram : Hon’ble Shri Narender Kumar Choudhry, JM And Hon’ble Shri Girish Agrawal, AM)