JG: It is not mandatory for all Real estate developers to work out their profits by following percentage completion method as prescribed by ICAI under AS 7. Therefore,there was no justification in rejection of accounts by application of provision of S.145(3) and changing the method from project completion to percentage completion method by the AO. Therefore,the order of Commissioner(Appeals) was to be set aside - Krish Infrastructure P.Ltd vs ACIT [2013] 35 taxmann 38 [ Jaipur trib.]. The Apex court in the case of CIT vs Hyundai heavy industries Co Ltd.[2007] 161 taxmann 191 (SC) also took the similar view and held that both the methods of accounting i.e.percentage completion & completed contract method were recognised methods.
Posted on: Wed, 17 Jul 2013 13:11:47 +0000
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