Assessee is partnership firm engaged in the business of development of housing project. It started residential housing project in the F.y. 2013-14 and decided to adopt project completion Method for recognizing revenue . In the F.Y. 2013-14 and 2014-15 assessee has not offered any income and capitalized all cost in WIP. In the 2015-16 search u\/132 was carried out at business premises , managing partner in the statement recorded u\/sec. 132(4) has stated that he was not aware about offering of income on % completion Method and he accepted that he will offer income computed as per Guidence Note issued by ICAI. Accordingly he has offered the income as per percent completion method in FY2015-16 .<\/p>\n
In the assessment proceedings,\u00a0 for FY\u00a0 2014-15 , on the basis of statement given by managing partner U\/Sec. 132(4) AO has made addition by rejecting books of accounts u\/Sec.145(3) and by estimating income as per percentage completion method.<\/p>\n
CIt A has also confirm the addition made by AO on the ground that assessee has accepted percentage completion method in the FY 2014-15.<\/p>\n
Issues<\/p>\n
1. Whether action of AO in making an addition in FY 2014-15 on the basis of admission of managing partner u\/Sec 132(4) making declaration of adoption of percentage completion method From F.Y. 2015_16 and accordingly offer the income in FY 2015-16.<\/p>\n
2. Whether rejection of books of accounts u\/Sec. 145(3) is justified on the ground that in the FY 2015-16 assessee has accepted Percentage completion Method.<\/p>\n
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