DCIT, Circle -10(1), , Kolkata V. M/s. Charansheela Advisory Pvt. Ltd., , Kolkata

ITA 2022/KOL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8623 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-04-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 24-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority
• Section: 143(3); 250; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA B BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER & SRI ABY T. VARKEY, HONBLE JUDICIAL MEMBER) [VIRTUAL COURT HEARING] ITA NO. 2022/KOL/2018 ASSESSMENT YEARS: 2014-15 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-10(1), KOLKATA....................APPELLANT VS. M/S. CHARANSHEELA ADVISORY PVT. LTD................................................................RESPONDENT 72/2, SARAT BOSE ROAD OPP. LANSDOWN KOLKATA 700 025 [PAN : AACCC 4291 J] APPEARANCES BY: SHRI VIJAY SHANKAR, CIT D/R, APPEARING ON BEHALF OF THE REVENUE. SHRI AKKAL DUDHEWALA, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. DATE OF CONCLUDING THE HEARING : JULY 15 TH , 2020 DATE OF PRONOUNCING THE ORDER : JULY 17 TH , 2020 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 1, KOLKATA, (HEREINAFTER THE LD.CIT(A)), PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 28/06/2018 FOR THE ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION OF FLATS ETC. IT HAS DEVELOPED/CONSTRUCTED AND SOLD UNITS/SPACES IN ITS PROJECT SHEKHAR CENTRAL AT INDORE, MADHYA PRADESH. IT FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014-15 ON 27/11/2015 DECLARING TOTAL INCOME AT RS.42,18,450/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT ON 28/12/2016, DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.13,96,14,618/- INTERALIA MAKING ADDITIONS OF RS.8,62,55,621/- BEING ADVANCES OUTSTANDING AS ON 31/03/2014, ON THE GROUND THAT THE CONSTRUCTION OF THE PROJECT WAS COMPLETE AS PER CERTIFICATE OF THE ARCHITECT AND HENCE THE ADVANCE AGAINST PURCHASES OF PROPERTY HAS TO BE RECOGNISED AS INCOME. THE ASSESSING OFFICER RELIED UPON:- A) THE CERTIFICATE OF THE ARCHITECT WHICH SAID THE CONSTRUCTION IS COMPLETED IN ALL RESPECT B) THE SALE DEED EXECUTED ON 25/01/2014 OF A SPACE SITUATED IN THE 10 FLOOR OF SHEKHAR CENTRAL. HE CONCLUDED THAT THE TOP MOST FLOOR REGISTERED ON 25/01/2014 TO THE BUYER, INDICATES THAT THE CONSTRUCTION IS COMPLETE. C) THE REGISTERED SALE DEED OF THE ASSESSEE HANDING OVER TF 25/01/2014 TO THE BUYER AND THE SALE DEED MENTIONS THAT OCCUPATION CERTIFICATE WAS ISSUED BY THE OF 29/06/2013. 2.1. THE LD. COUNSEL FOR THE ASSESSEE MADE SUBMISSIONS THAT THE ARCHITECT HAD MADE AN INADVERTENT MISTAKE FOR THE YEAR ENDING 31/03/2013 AS WELL AS FOR THE YEAR ENDING 31/03/2014 BY MENTIONING THAT THE CONSTRUCT THE ARCHITECT HIMSELF VIDE LETTER ADDRESSED TO THE ASSESSING OFFICER AND THAT THE METHOD OF ACCOUNTING OF THE ASSESSEE BEING FOLLOWED CONSISTENTLY YEAR AFTER YEAR MANDATES RECOGNITION OF INCOME ONLY ON HANDING OVER ISSUED BY THE LOCAL AUTHORITY ON 29/0 ASSESSING OFFICER REJECTED THESE EXPLANATIONS AND AT PARA 4 OF HIS ORDER HELD AS FOLLOWS: 4.8 IT IS SEEN FROM THE OCCUPATIONA OCCUPATIONAL CERTIFICATE UP TO THE HEIGHT OF 30 METER WAS ISSUED ON 29.06.2013. IT IS FURTHER SEEN FROM THE OCCUPATIONAL CERTIFICATE FILED BY THE ASSESSEE DATED 07.04.2015 THAT OCCUPATIONAL CERTIFIC ATE WAS ISSUED UP TO THE HEIGHT OF 36 METER. IT IS NOT POSSIBLE TO ISSUE OCCUPATIONAL CERTIFICATE BEFORE COMPLETION OF ANY PROJECT. WHEN A PROJECT IS UNDER CONSTRUCTION OCCUPATIONAL PRECONDITION AND BASIC REQUIREMENTS FOR ISSUING OCCUPATIONAL CERTIFICATE. WHEN A PROJECT IS COMPLETED AND ALL THE BASIC REQUIREMENTS SUCH WATER SUPPLY, PROVISION FOR FIRE FIGHTING ETC ARE TAKEN CARE AS PER REQUIREMENT AND LAW I THIS REGARD THEN ONLY OCCUPATIONAL CERTIFICATE CAN BE ISSUED. THERE IS NO ADDITION OF FLOOR AREA DURING THE YEAR UNDER CONSIDERATION AS APPEARED IN EVEN REVISED CERTIFICATES ISSUED FOR CLOSING STOCK AS ON 31 CIRCUMSTANCES IT IS AMPLY CLEAR THAT THE PROJECT WAS COMPLETED AS ON 31/03 THE CONSTRUCTION EXPENSES BOOKED BY THE ASSESSEE DURING THE YEAR IS BOGUS. THE ASSESSEE'S PROJECT 'SHEKHAR CENTRAL' INDORE WAS COMPETED AS ON 31 RECOGNIZE REVENUE BY NOT ONLY TAKING THE SALE CONSIDERATION DURING THE YEAR BUT ALSO BY TAKING INTO ACCOUNT OF ALL ADVANCES RECEIVED FOR SALE OF PROPERTY AS ON 31 ASSESSEE HAS ADVANCE OF RS. 8,62,55,621 THEREFORE RS. 8,62,55,621/ PENALTY PROCEEDINGS U/S. 271(1)(C ) INITIATED SEPARA 2 M/S. CHARANSHEELA ADVISORY PVT. LTD THE SALE DEED EXECUTED ON 25/01/2014 OF A SPACE SITUATED IN THE 10 FLOOR OF SHEKHAR CENTRAL. HE CONCLUDED THAT THE TOP MOST FLOOR REGISTERED ON 25/01/2014 TO THE BUYER, INDICATES THAT THE CONSTRUCTION IS THE REGISTERED SALE DEED OF THE ASSESSEE HANDING OVER TF 25/01/2014 TO THE BUYER AND THE SALE DEED MENTIONS THAT OCCUPATION CERTIFICATE WAS ISSUED BY THE OF FICER OF NAGAR PALIKA, INDORE ON THE LD. COUNSEL FOR THE ASSESSEE MADE SUBMISSIONS THAT THE ARCHITECT HAD MADE AN INADVERTENT MISTAKE FOR THE YEAR ENDING 31/03/2013 AS WELL AS FOR THE YEAR ENDING 31/03/2014 BY MENTIONING THAT THE CONSTRUCT ION IS COMPLETE AND THIS WAS CLARIFIED BY THE ARCHITECT HIMSELF VIDE LETTER ADDRESSED TO THE ASSESSING OFFICER AND THAT THE METHOD OF ACCOUNTING OF THE ASSESSEE BEING FOLLOWED CONSISTENTLY YEAR AFTER YEAR MANDATES RECOGNITION OF INCOME ONLY ON HANDING OVER OF THE PROPERTY AND THAT THE CERTIFICATE ISSUED BY THE LOCAL AUTHORITY ON 29/0 6 /2013 WAS OF PART COMPLETION OF THE PROJECT. THE ASSESSING OFFICER REJECTED THESE EXPLANATIONS AND AT PARA 4 OF HIS ORDER HELD AS FOLLOWS: 4.8 IT IS SEEN FROM THE OCCUPATIONA L CERTIFICATE FILED BY THE ASSESSEE DATED 29.06.2013 THAT OCCUPATIONAL CERTIFICATE UP TO THE HEIGHT OF 30 METER WAS ISSUED ON 29.06.2013. IT IS FURTHER SEEN FROM THE OCCUPATIONAL CERTIFICATE FILED BY THE ASSESSEE DATED 07.04.2015 THAT ATE WAS ISSUED UP TO THE HEIGHT OF 36 METER. IT IS NOT POSSIBLE TO ISSUE OCCUPATIONAL CERTIFICATE BEFORE COMPLETION OF ANY PROJECT. WHEN A PROJECT IS UNDER CONSTRUCTION OCCUPATIONAL CERTIFICATE CANNOT BE ISSUED. COMPLETION CERTIFICATE IS A BASIC REQUIREMENTS FOR ISSUING OCCUPATIONAL CERTIFICATE. WHEN A PROJECT IS COMPLETED AND ALL THE BASIC REQUIREMENTS SUCH ELECTRICITY CONNECTION, DRAINAGE CONNECTION, WATER SUPPLY, PROVISION FOR FIRE FIGHTING ETC ARE TAKEN CARE AS PER REQUIREMENT AND LAW I THIS REGARD THEN ONLY OCCUPATIONAL CERTIFICATE CAN BE ISSUED. THERE IS NO ADDITION OF FLOOR AREA DURING THE YEAR UNDER CONSIDERATION AS APPEARED IN EVEN REVISED CERTIFICATES ISSUED FOR CLOSING STOCK AS ON 31 /03/2013 AND 31/ 03/2014 BY THE ARCHITECT. UNDER CIRCUMSTANCES IT IS AMPLY CLEAR THAT THE PROJECT WAS COMPLETED AS ON 31/03 THE CONSTRUCTION EXPENSES BOOKED BY THE ASSESSEE DURING THE YEAR IS BOGUS. THE ASSESSEE'S PROJECT 'SHEKHAR CENTRAL' INDORE WAS COMPETED AS ON 31 /03/20 13 HENCE ASSESSEE SHOULD RECOGNIZE REVENUE BY NOT ONLY TAKING THE SALE CONSIDERATION DURING THE YEAR BUT ALSO BY TAKING INTO ACCOUNT OF ALL ADVANCES RECEIVED FOR SALE OF PROPERTY AS ON 31 ASSESSEE HAS ADVANCE OF RS. 8,62,55,621 /- AS ON 31/03/2 014 FOR SALE OF SHOPS AND OFFICES. THEREFORE RS. 8,62,55,621/ - IS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S. 271(1)(C ) INITIATED SEPARA TELY FOR CONCEALMENT OF INCOME. ITA NO. 2022/KOL/2018 ASSESSMENT YEARS: 2014-15 M/S. CHARANSHEELA ADVISORY PVT. LTD . THE SALE DEED EXECUTED ON 25/01/2014 OF A SPACE SITUATED IN THE 10 TH FLOOR OF SHEKHAR CENTRAL. HE CONCLUDED THAT THE TOP MOST FLOOR WHICH IS REGISTERED ON 25/01/2014 TO THE BUYER, INDICATES THAT THE CONSTRUCTION IS THE REGISTERED SALE DEED OF THE ASSESSEE HANDING OVER TF -01 ON 25/01/2014 TO THE BUYER AND THE SALE DEED MENTIONS THAT OCCUPATION FICER OF NAGAR PALIKA, INDORE ON THE LD. COUNSEL FOR THE ASSESSEE MADE SUBMISSIONS THAT THE ARCHITECT HAD MADE AN INADVERTENT MISTAKE FOR THE YEAR ENDING 31/03/2013 AS WELL AS FOR THE YEAR ENDING ION IS COMPLETE AND THIS WAS CLARIFIED BY THE ARCHITECT HIMSELF VIDE LETTER ADDRESSED TO THE ASSESSING OFFICER AND THAT THE METHOD OF ACCOUNTING OF THE ASSESSEE BEING FOLLOWED CONSISTENTLY YEAR AFTER YEAR MANDATES OF THE PROPERTY AND THAT THE CERTIFICATE /2013 WAS OF PART COMPLETION OF THE PROJECT. THE ASSESSING OFFICER REJECTED THESE EXPLANATIONS AND AT PARA 4 OF HIS ORDER HELD AS FOLLOWS: - L CERTIFICATE FILED BY THE ASSESSEE DATED 29.06.2013 THAT OCCUPATIONAL CERTIFICATE UP TO THE HEIGHT OF 30 METER WAS ISSUED ON 29.06.2013. IT IS FURTHER SEEN FROM THE OCCUPATIONAL CERTIFICATE FILED BY THE ASSESSEE DATED 07.04.2015 THAT ATE WAS ISSUED UP TO THE HEIGHT OF 36 METER. IT IS NOT POSSIBLE TO ISSUE OCCUPATIONAL CERTIFICATE BEFORE COMPLETION OF ANY PROJECT. WHEN A PROJECT IS UNDER CERTIFICATE CANNOT BE ISSUED. COMPLETION CERTIFICATE IS A BASIC REQUIREMENTS FOR ISSUING OCCUPATIONAL CERTIFICATE. WHEN A PROJECT IS ELECTRICITY CONNECTION, DRAINAGE CONNECTION, WATER SUPPLY, PROVISION FOR FIRE FIGHTING ETC ARE TAKEN CARE AS PER REQUIREMENT AND LAW I N THIS REGARD THEN ONLY OCCUPATIONAL CERTIFICATE CAN BE ISSUED. THERE IS NO ADDITION OF FLOOR AREA DURING THE YEAR UNDER CONSIDERATION AS APPEARED IN EVEN REVISED CERTIFICATES ISSUED 03/2014 BY THE ARCHITECT. UNDER THE FACTS AND CIRCUMSTANCES IT IS AMPLY CLEAR THAT THE PROJECT WAS COMPLETED AS ON 31/03 /2013 ITSELF AND THE CONSTRUCTION EXPENSES BOOKED BY THE ASSESSEE DURING THE YEAR IS BOGUS. THE ASSESSEE'S 13 HENCE ASSESSEE SHOULD RECOGNIZE REVENUE BY NOT ONLY TAKING THE SALE CONSIDERATION DURING THE YEAR BUT ALSO BY TAKING INTO ACCOUNT OF ALL ADVANCES RECEIVED FOR SALE OF PROPERTY AS ON 31 /03/2014. THE 014 FOR SALE OF SHOPS AND OFFICES. IS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSEE. TELY FOR CONCEALMENT OF INCOME. 2.2. HE FURTHER DISALLOWED EXPENDITURE OF RS.4,91,40,547/ EXPENDITURE WAS INCURRED AFTER COMPLETION OF THE PROJECT WAS BOGUS EXPENDITURE AND NOT ALLOWABLE. 3. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APP AUTHORITY, HELD THAT THE ASSESSING OFFICER WAS LEGALLY AND FACTUALLY INCORRECT IN MAKING THE ADDITIONS. HE HELD THAT THE ASSESSEE WAS FOLLOWING PROJECT COMPLETION METHOD OF ACCOUNTING AND WAS RECOGNISING INCOME ONLY ON HANDING ULTIMATE BUYER. HE FURTHER RECORDED THAT THE ARCHITECT HAS CLARIFIED THE ERRORS THAT CREPT INTO HIS EARLIER CERTIFICATES AND THE FACTUAL POSITION HAS BEEN WRONGLY ASSESSING OFFICER. HE FURTHER HELD THAT THE ENT ASSESSEE FOR THE ASSESSMENT YEAR 2015 ISSUED BY THE LOCAL AUTHORITIES I.E., 07/04/2015 AND THE ASSESSING OFFICER ACCEPTED THE SAME. HE GRANTED RELIEF. 4. AGGRIEVED T HE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: 6. IN THE GROUNDS OF APPEAL, THE ASSESSING OFFICER HAS NOT CHALLENGED THE FINDINGS OF THE LD. CIT(A) ON THE METHOD OF ACCOUNTING. THE LD. CIT(A) AT PARA 9, HELD AS FOLLOWS: I HAVE CONSIDERED THE FINDINGS OF THE A.O IN THE ASSESSMENT ORDER, THE WRITTEN SUB FILED BY THE A.R OF THE APPELLANT AND THE CITED JUDICIAL DECISION. THE APPELLANT WAS ENGAGED IN THE BUSINESS OF PROPERTY DEVELOPMENT. AS PER THE FINDING OF THE A.O IN THE ASSESSMENT ORDER, HE MADE THE ADDITION OF ADVANCES RECEIVED OF RS 8,62,55,621 OF THE APPELLANT. THE APPELLANT'S A/R HAS CONTENDED THROUGH THE WRITTEN SUBMISSIONS THAT THE SAID RECEIPTS IN THE NOMENCLATURE OF ADVANCES, WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS AS LIABILITY AND UNTIL AND UNLESS THE UNSOLD IN SALE OF FLATS TO THE RESPECTIVE PARTIES / POSSESSION IS NOT TRANSFERRED AND HANDED OVER TO THEM, THE SAME SHALL BE TREATED AS REVENUE, ONLY WHEN THE SALE IS RECOGNIZED, AS PER THE METHOD OF ACCOUNTING REGULARLY FOLLOWE A.O IN THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS. THE FINDING OF THE AO IN RESPECT OF THE IMPUGNED ADDITIONS WERE MADE ON THE BASIS OF THE FOLLOWING INFERENCES DRAWN AS REGARDS TO (A) THE ARCHITECT HAS REP CONSTRUCTION IS COMPLETED IN ALL RESPECT; (B) THAT THE SAMPLE SALE DEEDS FILED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS SHOW TRANSFER / SALE OF CERTAIN UNITS ON 25.1.2014 WHICH MEANS THAT T OCCUPATIONAL CERTIFICATE WAS ALREADY ISSUED WHICH MEANS THAT THE PROJECT IS COMPLETED. 3 M/S. CHARANSHEELA ADVISORY PVT. LTD HE FURTHER DISALLOWED EXPENDITURE OF RS.4,91,40,547/ - ON THE GROUND THAT THIS EXPENDITURE WAS INCURRED AFTER COMPLETION OF THE PROJECT I.E. ON 31/03/2013 AND HENCE WAS BOGUS EXPENDITURE AND NOT ALLOWABLE. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APP EAL. THE LD. FIRST APPELLATE AUTHORITY, HELD THAT THE ASSESSING OFFICER WAS LEGALLY AND FACTUALLY INCORRECT IN MAKING THE ADDITIONS. HE HELD THAT THE ASSESSEE WAS FOLLOWING PROJECT COMPLETION METHOD OF ACCOUNTING AND WAS RECOGNISING INCOME ONLY ON HANDING OVER OF THE PROPERTY TO THE ULTIMATE BUYER. HE FURTHER RECORDED THAT THE ARCHITECT HAS CLARIFIED THE ERRORS THAT CREPT INTO HIS EARLIER CERTIFICATES AND THE FACTUAL POSITION HAS BEEN WRONGLY ASSESSING OFFICER. HE FURTHER HELD THAT THE ENT IRE ADVANCES WERE SHOWN AS INCOME BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2015 - 16, THE YEAR IN WHICH OCCUPATION CERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITIES I.E., 07/04/2015 AND THE ASSESSING OFFICER ACCEPTED THE HE REVENUE IS IN APPEAL BEFORE US. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: - IN THE GROUNDS OF APPEAL, THE ASSESSING OFFICER HAS NOT CHALLENGED THE FINDINGS OF THE LD. CIT(A) ON THE METHOD OF ACCOUNTING. THE LD. CIT(A) AT PARA 9, HELD AS FOLLOWS: I HAVE CONSIDERED THE FINDINGS OF THE A.O IN THE ASSESSMENT ORDER, THE WRITTEN SUB FILED BY THE A.R OF THE APPELLANT AND THE CITED JUDICIAL DECISION. THE APPELLANT WAS ENGAGED IN THE BUSINESS OF PROPERTY DEVELOPMENT. AS PER THE FINDING OF THE A.O IN THE ASSESSMENT ORDER, HE MADE THE ADDITION OF ADVANCES RECEIVED OF RS 8,62,55,621 /- TO THE TAXABLE INCOME OF THE APPELLANT. THE APPELLANT'S A/R HAS CONTENDED THROUGH THE WRITTEN SUBMISSIONS THAT THE SAID RECEIPTS IN THE NOMENCLATURE OF ADVANCES, WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS AS LIABILITY AND UNTIL AND UNLESS THE UNSOLD IN VENTORY OF FLATS IS NOT TRANSFERRED / SALE OF FLATS TO THE RESPECTIVE PARTIES / POSSESSION IS NOT TRANSFERRED AND HANDED OVER TO THEM, THE SAME SHALL BE TREATED AS REVENUE, ONLY WHEN THE SALE IS RECOGNIZED, AS PER THE METHOD OF ACCOUNTING REGULARLY FOLLOWE D BY THE APPELLANT COMPANY AND ACCEPTED BY THE A.O IN THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS. THE FINDING OF THE AO IN RESPECT OF THE IMPUGNED ADDITIONS WERE MADE ON THE BASIS OF THE FOLLOWING INFERENCES DRAWN AS REGARDS TO (A) THE ARCHITECT HAS REP ORTED VIDE HIS REPORT DATED 30.4.2013 THAT THE CONSTRUCTION IS COMPLETED IN ALL RESPECT; (B) THAT THE SAMPLE SALE DEEDS FILED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS SHOW TRANSFER / SALE OF CERTAIN UNITS ON 25.1.2014 WHICH MEANS THAT T HE PROJECT WAS ALREADY COMPLETED AND (C) THAT OCCUPATIONAL CERTIFICATE WAS ALREADY ISSUED WHICH MEANS THAT THE PROJECT IS COMPLETED. ITA NO. 2022/KOL/2018 ASSESSMENT YEARS: 2014-15 M/S. CHARANSHEELA ADVISORY PVT. LTD . ON THE GROUND THAT THIS I.E. ON 31/03/2013 AND HENCE EAL. THE LD. FIRST APPELLATE AUTHORITY, HELD THAT THE ASSESSING OFFICER WAS LEGALLY AND FACTUALLY INCORRECT IN MAKING THE ADDITIONS. HE HELD THAT THE ASSESSEE WAS FOLLOWING PROJECT COMPLETION METHOD OF OVER OF THE PROPERTY TO THE ULTIMATE BUYER. HE FURTHER RECORDED THAT THE ARCHITECT HAS CLARIFIED THE ERRORS THAT CREPT INTO HIS EARLIER CERTIFICATES AND THE FACTUAL POSITION HAS BEEN WRONGLY CONSIDERED BY THE IRE ADVANCES WERE SHOWN AS INCOME BY THE 16, THE YEAR IN WHICH OCCUPATION CERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITIES I.E., 07/04/2015 AND THE ASSESSING OFFICER ACCEPTED THE WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES IN THE GROUNDS OF APPEAL, THE ASSESSING OFFICER HAS NOT CHALLENGED THE FINDINGS OF THE LD. CIT(A) ON THE METHOD OF ACCOUNTING. THE LD. CIT(A) AT PARA 9, HELD AS FOLLOWS: - I HAVE CONSIDERED THE FINDINGS OF THE A.O IN THE ASSESSMENT ORDER, THE WRITTEN SUB MISSION FILED BY THE A.R OF THE APPELLANT AND THE CITED JUDICIAL DECISION. THE APPELLANT WAS ENGAGED IN THE BUSINESS OF PROPERTY DEVELOPMENT. AS PER THE FINDING OF THE A.O IN THE ASSESSMENT TO THE TAXABLE INCOME OF THE APPELLANT. THE APPELLANT'S A/R HAS CONTENDED THROUGH THE WRITTEN SUBMISSIONS THAT THE SAID RECEIPTS IN THE NOMENCLATURE OF ADVANCES, WERE DULY RECORDED IN THE BOOKS OF VENTORY OF FLATS IS NOT TRANSFERRED / SALE OF FLATS TO THE RESPECTIVE PARTIES / POSSESSION IS NOT TRANSFERRED AND HANDED OVER TO THEM, THE SAME SHALL BE TREATED AS REVENUE, ONLY WHEN THE SALE IS RECOGNIZED, AS PER THE D BY THE APPELLANT COMPANY AND ACCEPTED BY THE A.O IN THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS. THE FINDING OF THE AO IN RESPECT OF THE IMPUGNED ADDITIONS WERE MADE ON THE BASIS OF THE FOLLOWING INFERENCES DRAWN AS ORTED VIDE HIS REPORT DATED 30.4.2013 THAT THE CONSTRUCTION IS COMPLETED IN ALL RESPECT; (B) THAT THE SAMPLE SALE DEEDS FILED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS SHOW TRANSFER / SALE OF CERTAIN UNITS HE PROJECT WAS ALREADY COMPLETED AND (C) THAT OCCUPATIONAL CERTIFICATE WAS ALREADY ISSUED WHICH MEANS THAT THE PROJECT IS COMPLETED. IN THIS REGARD, THE A/R HAS SUBMITTED THAT, THE APPELLANT MAINTAINS ITS BOOKS OF ACCOUNT BY FOLLOWING THE MERCANTILE METHOD OF ACCOUNTING, WHEREIN, THE REVENUE IS RECOGNIZED AS AND WHEN RISK AND REWARD ATTACHED WITH THE IMMOVABLE PROPERTY IS TRANSFERRED TO THE BUYER AND THE SALE OF PROPERTY BECOMES CERTAIN. THEREFORE, ANY AMOUNT RECEIVED BY TH ADVANCES AGAINST THE BOOKING OF THE PROPERTY PARTAKE THE CHARACTER ''CURRENT LIABILITY' AND THE SAME SHALL BE RECOGNIZED AS REVENUE ONLY WHEN THE RISK I S TRANSFERRED. IN SUPPORT OF THIS PROPOSITION, RELIANCE WAS PLACED UPON VARIOUS JUDICIAL PRONOUNCEMENTS VIZ., THE DECISION OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE O SHIVALIK BUILDWELL (P.) LTD. (2014) 220 TAXMAN 3 (GUJARAT) (MAG.), THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE 'OF CIT V. ASHALAND CORPORATION (1982) 133 ITR 55 (GUJARAT). THE HON'BLE HIGH COURT, OF GUJARAT IN THE CASE OF CIT VS. MOTILAL C. PATE 666 (GUJARAT) AND THE HON'BLE BOMBAY HIGH COURT DECISION DATED 30.01.2018 IN THE CASE OF CIT VS. MILLENNIUM ESTATES PVT. LTD. IN ITA NO. 853 OF 2015 (2018) 93 TAXMANN.COM 41 (BOMBAY) 6.1. THEREAFTER AT PARA 11, THE LD. CIT(A) HELD I FIND THAT THERE IS SUBSTANCE IN THE CONTENTIONS OF THE APPELLANT. FIRSTLY, TH THE APPELLANT FOR THE A.Y 2015 INCOME OF THE APPELLANT AND THE METHOD OF ACCOUNTING ARGUED THAT HAD THE DEPARTMENT BEEN CONSISTENT IN ITS APPROACH, THEN THE INCOME OFFERED BY THE APPELLANT FOR ALL THE SUBSEQUENT YEARS, SHOULD HAVE BEEN NULLIFIED AS THE AO HAD ALREADY MADE ADDITION OF THE ENTIRE ADVANCES THE ONE HAND, FOR AY 2014 THE APPELLANT AS CURR ENT LIABILITY ARE TREATED AS INCOME (NET INCOME), WHEREAS, IN THE SUBSEQUENT YEARS, THE INCOME ACCR IS ALSO A FACT THAT, THE APPELLANT HAS OFFERED INCOME UPON EFFECTING SALES, IN ALL THE SUBSEQUENT YEARS, AS AND WHEN THE SALE DEEDS WERE REGISTERED. FURTHER, NO CONSEQUENTIAL DEDUCTION OR ADJUSTMENT THE AO IN THE PRESENT ASSESSMENT ORDER. MOREOVER, THE AO HAS NOT REJECTED THE BOOK RESULTS BY POINTING OUT ANY DEFECTS IN THE BOOKS OF ACC ANY SPE CIFIC FINDING AS TO WHY THE ADVANCES RECEIVED ARE NET INCOME F THE APPELLANT. IT WAS ARGUED THAT WHEN THE ARCHITECT HAS RECTIFIED THE CERTIFICATE HE RELIANCE EXCLUSIVELY BY THE A.O ON THE ERRONEOUS DATA WAS A RBITRARY, AS THE SAME WAS STATED TO HAVE BEEN INADVERTEN CONSIDERING THE FACT THAT THE CORRECTED CERTIFICATE ALONG WITH DOCUMENTARY EVIDENCES I.E SUBSEQUENT ISSUANCE OF COMPLETION CERTIFICATE BY COMPETENT AUTHORITY WERE PLA RECORD IN SUPPORT OF THE APPELLANT'S METHOD OF ACCOUNTING. IT IS ALSO PERTINENT TO THE ISSUE IN DISPUTE THAT, THE METHOD OF ACCOUNTING, VIZ., RECOGNIZING SALES UPON EXECUTION OF SALE DEED, IS AN ACCEPTED METHOD OF ACCOUNTING, AS PER ACCOUNTING STAN DARDS OF THE ICAI AS WELL AS IN VARIOUS JUDICIAL PRONOUNCEMENTS, THE APPELLATE TRIBUNALS/COURTS HAVE ACCEPTED THIS NORM AND THIS HAS NOW BECOME AN ACCEPTED PRINCIPLE FOR THIS LINE OF TRADE. THEREFORE, THE ADDITION MERELY ON THE BASIS OF ERRONEOUS ASSUMPTIO NS MADE BY THE AO, WHICH DOES NOT LEAD TO ESTABLISHING THAT THE METHOD OF ACCOUNTING FOLLOWED BY THE APPELLANT WAS INCORRECT. FURTHER, ADVANCES PER BECOME THE TAXABLE INCOME OF THE APPELLANT. AS FAR AS THE CERTIFICATE OF TH OCCUPATION CERTIFI CATE ARE CONCERNED, IT WAS EXPLAINED BY THE A/R AS PER SUBMISSIONS PLACED ON RECORD THAT CORRECTED WHEREIN THE ARCHITECT HAS STATED THAT THE CONSTRUCTION IS UNDER PROGRESS. 4 M/S. CHARANSHEELA ADVISORY PVT. LTD IN THIS REGARD, THE A/R HAS SUBMITTED THAT, THE APPELLANT MAINTAINS ITS BOOKS OF ACCOUNT BY FOLLOWING THE MERCANTILE METHOD OF ACCOUNTING, WHEREIN, THE REVENUE IS RECOGNIZED AS AND WHEN RISK AND REWARD ATTACHED WITH THE IMMOVABLE PROPERTY IS THE BUYER AND ALSO, WHEN ULTIMATE COLLECTION OF THE CONSIDERATION THE SALE OF PROPERTY BECOMES CERTAIN. THEREFORE, ANY AMOUNT RECEIVED BY TH ADVANCES AGAINST THE BOOKING OF THE PROPERTY PARTAKE THE CHARACTER ''CURRENT LIABILITY' THE SAME SHALL BE RECOGNIZED AS REVENUE ONLY WHEN THE RISK AND REWARD OF THE PROPERTY S TRANSFERRED. IN SUPPORT OF THIS PROPOSITION, RELIANCE WAS PLACED UPON VARIOUS JUDICIAL PRONOUNCEMENTS VIZ., THE DECISION OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE O SHIVALIK BUILDWELL (P.) LTD. (2014) 220 TAXMAN 3 (GUJARAT) (MAG.), THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE 'OF CIT V. ASHALAND CORPORATION (1982) 133 ITR 55 (GUJARAT). THE HON'BLE HIGH COURT, OF GUJARAT IN THE CASE OF CIT VS. MOTILAL C. PATE L & CO. (1988) 173 ITR 666 (GUJARAT) AND THE HON'BLE BOMBAY HIGH COURT DECISION DATED 30.01.2018 IN THE CASE OF CIT VS. MILLENNIUM ESTATES PVT. LTD. IN ITA NO. 853 OF 2015 (2018) 93 TAXMANN.COM 41 THEREAFTER AT PARA 11, THE LD. CIT(A) HELD AS FOLLOWS:- THAT THERE IS SUBSTANCE IN THE CONTENTIONS OF THE APPELLANT. FIRSTLY, TH THE APPELLANT FOR THE A.Y 2015 - 16 HAS BEEN COMPLETED WHEREIN THE A.O HAS ACCEPTED THE INCOME OF THE APPELLANT AND THE METHOD OF ACCOUNTING CONSISTENTLY FOLLOWED BY IT. IT WAS ARGUED THAT HAD THE DEPARTMENT BEEN CONSISTENT IN ITS APPROACH, THEN THE INCOME OFFERED BY THE APPELLANT FOR ALL THE SUBSEQUENT YEARS, SHOULD HAVE BEEN NULLIFIED AS THE AO HAD ALREADY MADE ADDITION OF THE ENTIRE ADVANCES RECEIVED DURING THE YEAR ITSELF. THEREFORE, ON THE ONE HAND, FOR AY 2014 - 15, THE ENTIRE ADVANCES RECEIVED AND RECORDED IN THE BOOKS OF ENT LIABILITY ARE TREATED AS INCOME (NET INCOME), WHEREAS, IN THE SUBSEQUENT YEARS, THE INCOME ACCR UED FROM SALES EFFECTED ARE TREATED AS TAXABLE INCOME. IT IS ALSO A FACT THAT, THE APPELLANT HAS OFFERED INCOME UPON EFFECTING SALES, IN ALL THE SUBSEQUENT YEARS, AS AND WHEN THE SALE DEEDS WERE REGISTERED. FURTHER, NO CONSEQUENTIAL DEDUCTION OR ADJUSTMENT WAS GIVEN ~O THE APPELLANT, ON THE BASIS OF THE ADDITIONS MADE BY THE AO IN THE PRESENT ASSESSMENT ORDER. MOREOVER, THE AO HAS NOT REJECTED THE BOOK RESULTS BY POINTING OUT ANY DEFECTS IN THE BOOKS OF ACC OUNT MAINTAINED BY THE APPELLANT NOR GIVEN CIFIC FINDING AS TO WHY THE CO MPLETED CONTRACT METHOD IS NOT ACCEPTABLE AND ADVANCES RECEIVED ARE NET INCOME F THE APPELLANT. IT WAS ARGUED THAT WHEN THE ARCHITECT HAS RECTIFIED THE CERTIFICATE HE RELIANCE EXCLUSIVELY BY THE A.O ON THE ERRONEOUS DATA WAS RBITRARY, AS THE SAME WAS STATED TO HAVE BEEN INADVERTEN TLY SUBMITTED BY THE APPELLANT, CONSIDERING THE FACT THAT THE CORRECTED CERTIFICATE ALONG WITH DOCUMENTARY EVIDENCES I.E SUBSEQUENT ISSUANCE OF COMPLETION CERTIFICATE BY COMPETENT AUTHORITY WERE PLA RECORD IN SUPPORT OF THE APPELLANT'S METHOD OF ACCOUNTING. IT IS ALSO PERTINENT TO THE ISSUE IN DISPUTE THAT, THE METHOD OF ACCOUNTING, VIZ., RECOGNIZING SALES UPON EXECUTION OF SALE DEED, IS AN ACCEPTED METHOD OF ACCOUNTING, AS PER DARDS OF THE ICAI AS WELL AS IN VARIOUS JUDICIAL PRONOUNCEMENTS, THE APPELLATE TRIBUNALS/COURTS HAVE ACCEPTED THIS NORM AND THIS HAS NOW BECOME AN ACCEPTED PRINCIPLE FOR THIS LINE OF TRADE. THEREFORE, THE ADDITION MERELY ON THE BASIS OF ERRONEOUS NS MADE BY THE AO, WHICH DOES NOT LEAD TO ESTABLISHING THAT THE METHOD OF ACCOUNTING FOLLOWED BY THE APPELLANT WAS INCORRECT. FURTHER, ADVANCES PER BECOME THE TAXABLE INCOME OF THE APPELLANT. AS FAR AS THE CERTIFICATE OF TH CATE ARE CONCERNED, IT WAS EXPLAINED BY THE A/R AS PER SUBMISSIONS PLACED ON RECORD THAT THE SAME WAS ISSUED INADVERTENTLY. IT WAS CLARIFIED THAT THIS WAS CORRECTED WHEREIN THE ARCHITECT HAS STATED THAT THE CONSTRUCTION IS UNDER PROGRESS. ITA NO. 2022/KOL/2018 ASSESSMENT YEARS: 2014-15 M/S. CHARANSHEELA ADVISORY PVT. LTD . IN THIS REGARD, THE A/R HAS SUBMITTED THAT, THE APPELLANT MAINTAINS ITS BOOKS OF ACCOUNT BY FOLLOWING THE MERCANTILE METHOD OF ACCOUNTING, WHEREIN, THE REVENUE IS RECOGNIZED AS AND WHEN RISK AND REWARD ATTACHED WITH THE IMMOVABLE PROPERTY IS OF THE CONSIDERATION TOWARDS THE SALE OF PROPERTY BECOMES CERTAIN. THEREFORE, ANY AMOUNT RECEIVED BY TH E APPELLANT AS ADVANCES AGAINST THE BOOKING OF THE PROPERTY PARTAKE THE CHARACTER ''CURRENT LIABILITY' AND REWARD OF THE PROPERTY S TRANSFERRED. IN SUPPORT OF THIS PROPOSITION, RELIANCE WAS PLACED UPON VARIOUS JUDICIAL PRONOUNCEMENTS VIZ., THE DECISION OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE O F CIT V. SHIVALIK BUILDWELL (P.) LTD. (2014) 220 TAXMAN 3 (GUJARAT) (MAG.), THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE 'OF CIT V. ASHALAND CORPORATION (1982) 133 ITR 55 (GUJARAT). THE L & CO. (1988) 173 ITR 666 (GUJARAT) AND THE HON'BLE BOMBAY HIGH COURT DECISION DATED 30.01.2018 IN THE CASE OF CIT VS. MILLENNIUM ESTATES PVT. LTD. IN ITA NO. 853 OF 2015 (2018) 93 TAXMANN.COM 41 THAT THERE IS SUBSTANCE IN THE CONTENTIONS OF THE APPELLANT. FIRSTLY, TH E ASSESSMENT OF 16 HAS BEEN COMPLETED WHEREIN THE A.O HAS ACCEPTED THE CONSISTENTLY FOLLOWED BY IT. IT WAS ARGUED THAT HAD THE DEPARTMENT BEEN CONSISTENT IN ITS APPROACH, THEN THE INCOME OFFERED BY THE APPELLANT FOR ALL THE SUBSEQUENT YEARS, SHOULD HAVE BEEN NULLIFIED AS THE AO HAD RECEIVED DURING THE YEAR ITSELF. THEREFORE, ON 15, THE ENTIRE ADVANCES RECEIVED AND RECORDED IN THE BOOKS OF ENT LIABILITY ARE TREATED AS INCOME (NET INCOME), WHEREAS, IN THE UED FROM SALES EFFECTED ARE TREATED AS TAXABLE INCOME. IT IS ALSO A FACT THAT, THE APPELLANT HAS OFFERED INCOME UPON EFFECTING SALES, IN ALL THE SUBSEQUENT YEARS, AS AND WHEN THE SALE DEEDS WERE REGISTERED. FURTHER, NO CONSEQUENTIAL THE ADDITIONS MADE BY THE AO IN THE PRESENT ASSESSMENT ORDER. MOREOVER, THE AO HAS NOT REJECTED THE BOOK RESULTS OUNT MAINTAINED BY THE APPELLANT NOR GIVEN MPLETED CONTRACT METHOD IS NOT ACCEPTABLE AND ADVANCES RECEIVED ARE NET INCOME F THE APPELLANT. IT WAS ARGUED THAT WHEN THE ARCHITECT HAS RECTIFIED THE CERTIFICATE HE RELIANCE EXCLUSIVELY BY THE A.O ON THE ERRONEOUS DATA WAS TLY SUBMITTED BY THE APPELLANT, CONSIDERING THE FACT THAT THE CORRECTED CERTIFICATE ALONG WITH DOCUMENTARY EVIDENCES I.E ., SUBSEQUENT ISSUANCE OF COMPLETION CERTIFICATE BY COMPETENT AUTHORITY WERE PLA CED ON IT IS ALSO PERTINENT TO THE ISSUE IN DISPUTE THAT, THE METHOD OF ACCOUNTING, VIZ., RECOGNIZING SALES UPON EXECUTION OF SALE DEED, IS AN ACCEPTED METHOD OF ACCOUNTING, AS PER DARDS OF THE ICAI AS WELL AS IN VARIOUS JUDICIAL PRONOUNCEMENTS, THE APPELLATE TRIBUNALS/COURTS HAVE ACCEPTED THIS NORM AND THIS HAS NOW BECOME AN ACCEPTED PRINCIPLE FOR THIS LINE OF TRADE. THEREFORE, THE ADDITION MERELY ON THE BASIS OF ERRONEOUS NS MADE BY THE AO, WHICH DOES NOT LEAD TO ESTABLISHING THAT THE METHOD OF ACCOUNTING FOLLOWED BY THE APPELLANT WAS INCORRECT. FURTHER, ADVANCES PER -SE DOES NOT BECOME THE TAXABLE INCOME OF THE APPELLANT. AS FAR AS THE CERTIFICATE OF TH E ARCHITECT AND CATE ARE CONCERNED, IT WAS EXPLAINED BY THE A/R AS PER SUBMISSIONS INADVERTENTLY. IT WAS CLARIFIED THAT THIS WAS CORRECTED WHEREIN THE ARCHITECT HAS STATED THAT THE CONSTRUCTION IS UNDER PROGRESS. HOWE VER, THERE IS NO VARIATION OF INVENTORY VALUATION IN BOTH THE CERTIFICATES, WHICH LEADS TO THE INFERENCE THAT THERE WAS NO MALA FIDE INTENTION BEHIND THE CLARIFICATION ISSUED BY THE ARCHITECT OR SUPPRESSION OF FACTS BY THE APPELLANT RELEVANT TO THE ACCOUNT THE FINAN CIAL YEAR UNDER CONSIDERATION. 6.1.1. WE FIND NO INFIRMITY IN THESE FINDINGS OF THE LD. CIT(A). 6.2. THE LD. D/R, RELIES MAINLY ON THE CERTIFICATE ISSUED BY THE ARCHITECT TO COME TO A CONCLUSION THAT THE PROJECT HAS BEEN COMP ARCHITECT HAS CLARIFIED THAT THERE WAS A SIMILAR MISTAKE HAD ALSO OCCURRED IN THE CERTIFICATE ISSUED BY HIM AS ON 31/03/2013. HE FILED RECTIFIED CERTIFICATES. IF WE CANNOT RE CONSIDER OTHER FACTUAL EVIDENCES TO ARRIVE AT THE CONCLUSION AS TO WHETHER THE CONSTRUCTION OF THE PROJECT WAS COMPLETE. THAT SUBSTANTIAL EXPENDITURE HAS BEEN INC COST OF THE PROJECT (WHICH WAS DISALLOWED BY THE ASSESSING OFFICER) SUBSEQUENT ASSESSMENT YEARS I.E., RELEVANT TO THE FINANCIAL YEAR 01/04/2014 TO 31/03/2015 WHICH INDICATES THAT THE PROJECT WAS NOT COM CONSTRUCTION WAS COMPLETED, THEN SUCH HUGE EXPENDITURE WOULD NOT BE REQUIRED TO BE INCURRED. WE ALSO FIND THAT THE LOCAL AUTHORITIES HAVE GIVEN OCCUPATION CERTIFICATE ONLY ON 07/04/2015. THE CERTIFICATE RELIED UPON BY THE ASSESS ON 29/08/2013, IS ONLY A PART OCCUPATION CERTIFICATE. THE PROJECT WAS NOT COMPLETE AS ON 31/03/2013. 6.2.1. WE FIND THAT THE ASSESSEE RECOG PR OJECT FOLLOWING THE PROJECT COMPLETION METHOD/ COMPLETED CONTRACT METHOD. THE SALE OF UNITS/ SPACES IS RECOGNIZED UPON COMPLETION OF THE SAID UNIT, HANDING OVER OF POSSESSION AND EXECUTION OF CONVEYANCE IN FAVOUR OF THE INTENDING BUYER. THE REVENUE IS THUS RECOGNIZED AS AND WHEN THE RISK AND REWARDS AS ALSO THE TITLE IN THE IMMOVEABLE PROPERTY IS TRANSFERRED TO THE BUYER AND WHEN THERE I COLLECTION OF THE CONSI DERATION. THIS METHOD OF ACCOUN FOLLOWED BY T HE ASSESSEE AND HAS BEEN ACCEPTED BY THE DEPARTMENT IN ALL THE PR AS WELL AS SUBSEQUENT YEARS. 5 M/S. CHARANSHEELA ADVISORY PVT. LTD VER, THERE IS NO VARIATION OF INVENTORY VALUATION IN BOTH THE CERTIFICATES, WHICH LEADS TO THE INFERENCE THAT THERE WAS NO MALA FIDE INTENTION BEHIND THE CLARIFICATION ISSUED BY THE ARCHITECT OR SUPPRESSION OF FACTS BY THE APPELLANT RELEVANT TO THE ACCOUNT CIAL YEAR UNDER CONSIDERATION. WE FIND NO INFIRMITY IN THESE FINDINGS OF THE LD. CIT(A). THE LD. D/R, RELIES MAINLY ON THE CERTIFICATE ISSUED BY THE ARCHITECT TO COME TO A CONCLUSION THAT THE PROJECT HAS BEEN COMP LETED ON 31/03/2013 . WE FIND THAT THE ARCHITECT HAS CLARIFIED THAT THERE WAS A N INADVERTENT MISTAKE IN THE SIMILAR MISTAKE HAD ALSO OCCURRED IN THE CERTIFICATE ISSUED BY HIM AS ON 31/03/2013. HE IF WE CANNOT RE LY ON THESE CERTIFICATES OF THE ARCHITECT, WE MAY CONSIDER OTHER FACTUAL EVIDENCES TO ARRIVE AT THE CONCLUSION AS TO WHETHER THE CONSTRUCTION OF THE PROJECT WAS COMPLETE. WE ALSO FIND FROM THE FINANCIALS STATEMENTS THAT SUBSTANTIAL EXPENDITURE HAS BEEN INC URRED BY THE ASSESSEE TOWARDS CONSTRUCTION COST OF THE PROJECT (WHICH WAS DISALLOWED BY THE ASSESSING OFFICER) SUBSEQUENT ASSESSMENT YEARS I.E., RELEVANT TO THE FINANCIAL YEAR 01/04/2014 TO 31/03/2015 WHICH INDICATES THAT THE PROJECT WAS NOT COM PLETED AS ON 31/03/2014. CONSTRUCTION WAS COMPLETED, THEN SUCH HUGE EXPENDITURE WOULD NOT BE REQUIRED TO BE WE ALSO FIND THAT THE LOCAL AUTHORITIES HAVE GIVEN OCCUPATION CERTIFICATE ONLY ON 07/04/2015. THE CERTIFICATE RELIED UPON BY THE ASSESS ING OFFICER, WHICH WAS ISSUED ON 29/08/2013, IS ONLY A PART OCCUPATION CERTIFICATE. THUS, AS PER THE LOCAL AUTHORITIES, THE PROJECT WAS NOT COMPLETE AS ON 31/03/2013. ASSESSEE RECOG NI ZES THE REVENUES AND COSTS IN RELATION TO THE OJECT FOLLOWING THE PROJECT COMPLETION METHOD/ COMPLETED CONTRACT METHOD. THE SALE OF UNITS/ SPACES IS RECOGNIZED UPON COMPLETION OF THE SAID UNIT, HANDING OVER OF POSSESSION AND EXECUTION OF CONVEYANCE IN FAVOUR OF THE INTENDING BUYER. THE REVENUE IS RECOGNIZED AS AND WHEN THE RISK AND REWARDS AS ALSO THE TITLE IN THE IMMOVEABLE PROPERTY IS TRANSFERRED TO THE BUYER AND WHEN THERE I S A REASONABLE CERTAINTY OF DERATION. THIS METHOD OF ACCOUN TING HAS BEEN CONSISTENTLY HE ASSESSEE AND HAS BEEN ACCEPTED BY THE DEPARTMENT IN ALL THE PR AS WELL AS SUBSEQUENT YEARS. THIS IS NOT DISPUTED BY THE LD. D/R. ITA NO. 2022/KOL/2018 ASSESSMENT YEARS: 2014-15 M/S. CHARANSHEELA ADVISORY PVT. LTD . VER, THERE IS NO VARIATION OF INVENTORY VALUATION IN BOTH THE CERTIFICATES, WHICH LEADS TO THE INFERENCE THAT THERE WAS NO MALA FIDE INTENTION BEHIND THE CLARIFICATION ISSUED BY THE ARCHITECT OR SUPPRESSION OF FACTS BY THE APPELLANT RELEVANT TO THE ACCOUNT ING OF PROFITS FOR THE LD. D/R, RELIES MAINLY ON THE CERTIFICATE ISSUED BY THE ARCHITECT TO COME TO A . WE FIND THAT THE THE CERTIFICATE AND SIMILAR MISTAKE HAD ALSO OCCURRED IN THE CERTIFICATE ISSUED BY HIM AS ON 31/03/2013. HE LY ON THESE CERTIFICATES OF THE ARCHITECT, WE MAY CONSIDER OTHER FACTUAL EVIDENCES TO ARRIVE AT THE CONCLUSION AS TO WHETHER THE WE ALSO FIND FROM THE FINANCIALS STATEMENTS TOWARDS CONSTRUCTION COST OF THE PROJECT (WHICH WAS DISALLOWED BY THE ASSESSING OFFICER) DURING THE SUBSEQUENT ASSESSMENT YEARS I.E., RELEVANT TO THE FINANCIAL YEAR 01/04/2014 TO PLETED AS ON 31/03/2014. IF CONSTRUCTION WAS COMPLETED, THEN SUCH HUGE EXPENDITURE WOULD NOT BE REQUIRED TO BE WE ALSO FIND THAT THE LOCAL AUTHORITIES HAVE GIVEN OCCUPATION CERTIFICATE ONLY ING OFFICER, WHICH WAS ISSUED THUS, AS PER THE LOCAL AUTHORITIES, ZES THE REVENUES AND COSTS IN RELATION TO THE OJECT FOLLOWING THE PROJECT COMPLETION METHOD/ COMPLETED CONTRACT METHOD. THE SALE OF UNITS/ SPACES IS RECOGNIZED UPON COMPLETION OF THE SAID UNIT, HANDING OVER OF POSSESSION AND EXECUTION OF CONVEYANCE IN FAVOUR OF THE INTENDING BUYER. THE REVENUE IS RECOGNIZED AS AND WHEN THE RISK AND REWARDS AS ALSO THE TITLE IN THE IMMOVEABLE S A REASONABLE CERTAINTY OF TING HAS BEEN CONSISTENTLY HE ASSESSEE AND HAS BEEN ACCEPTED BY THE DEPARTMENT IN ALL THE PR ECEDING 6.4. WE ALSO FIND THAT FOR THE SUBSEQUENT ASSESSMENT YEAR 2015 RECOGNIZED AS INCOME ALL THESE ADVANCES ON THE GROUND THAT THE PROJECT IS SUBSTANTIALLY COMPLETE DURING ASSESSMENT YEAR 2015 ADVANCE AS INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2015 SAME TO TAX . THUS, TAXING THEM ONCE AGAIN FOR THE ASSESSMENT YEAR 2014 AMOUNT TO DOUBLE TAXATION OF THE SAME AMOUNT. IS IN DISPUTE. 7. THUS, FOR ALL THESE REASONS, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THE LD. CIT(A) HAS RIGHTLY RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MILLENNIUM ESTATES PVT. LTD. IN ITA NO. 853 OF 2015 (2018) 93 41 (BOMBAY) AND OTHER CASE AUTHORITY AND DISMISS GROUND NO. 1 OF THE REVENUE. 8. GROUND NO. 2 HAS TO BE DISMISSED AS WE HAD ADJUDICATED COMPLEX HAS NOT COMPLETED DELET ED THE DISALLOWANCE AT PAGE 22 TO 23 OF HIS ORDER. EXTRACT THE SAME. WE UPHOLD THE SAME AND DISMISS GROUND NO. 2 OF THE REVENUE. 9. GROUND NO. 3 IS GEN ERAL IN NATURE. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE SD/- [ ABY T. VARKEY] JUDICIAL MEMBER DATED : 17.07.2020 {SC SPS} 6 M/S. CHARANSHEELA ADVISORY PVT. LTD WE ALSO FIND THAT FOR THE SUBSEQUENT ASSESSMENT YEAR 2015 - 16, THE ASSESSEE HAS RECOGNIZED AS INCOME ALL THESE ADVANCES ON THE GROUND THAT THE PROJECT IS SUBSTANTIALLY DURING ASSESSMENT YEAR 2015 -16 . THE ASSESSING OFFICER HAS ACCEPTED THIS AS INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2015 - 16 . THUS, TAXING THEM ONCE AGAIN FOR THE ASSESSMENT YEAR 2014 AMOUNT TO DOUBLE TAXATION OF THE SAME AMOUNT. THIS IS A CASE WHERE THE YEAR OF TAXATION THUS, FOR ALL THESE REASONS, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THE LD. CIT(A) HAS RIGHTLY RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CIT VS. MILLENNIUM ESTATES PVT. LTD. IN ITA NO. 853 OF 2015 (2018) 93 AND OTHER CASE - LAW. THUS, WE UPHOLD THE FINDINGS OF THE LD. FIRST APPELLATE AUTHORITY AND DISMISS GROUND NO. 1 OF THE REVENUE. GROUND NO. 2 HAS TO BE DISMISSED AS WE HAD ADJUDICATED THAT THE WHILE ADJUDICATING GROUND NO. 1 . THE LD. CIT(A) HAS RIGHTLY ED THE DISALLOWANCE AT PAGE 22 TO 23 OF HIS ORDER. FOR THE SAKE OF BREVITY, WE DO NOT EXTRACT THE SAME. WE UPHOLD THE SAME AND DISMISS GROUND NO. 2 OF THE REVENUE. ERAL IN NATURE. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE 17 TH DAY OF JULY, 2020. [ J. SUDHAKAR REDDY ACCOUNTANT MEMBER ITA NO. 2022/KOL/2018 ASSESSMENT YEARS: 2014-15 M/S. CHARANSHEELA ADVISORY PVT. LTD . 16, THE ASSESSEE HAS RECOGNIZED AS INCOME ALL THESE ADVANCES ON THE GROUND THAT THE PROJECT IS SUBSTANTIALLY . THE ASSESSING OFFICER HAS ACCEPTED THIS 16 AND ASSESSED THE . THUS, TAXING THEM ONCE AGAIN FOR THE ASSESSMENT YEAR 2014 -15, WOULD THIS IS A CASE WHERE THE YEAR OF TAXATION THUS, FOR ALL THESE REASONS, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THE LD. CIT(A) HAS RIGHTLY RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CIT VS. MILLENNIUM ESTATES PVT. LTD. IN ITA NO. 853 OF 2015 (2018) 93 TAXMANN.COM LAW. THUS, WE UPHOLD THE FINDINGS OF THE LD. FIRST APPELLATE THE CONSTRUCTION OF . THE LD. CIT(A) HAS RIGHTLY FOR THE SAKE OF BREVITY, WE DO NOT EXTRACT THE SAME. WE UPHOLD THE SAME AND DISMISS GROUND NO. 2 OF THE REVENUE. SD/- J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER COPY OF THE ORDER FORWARDED TO: 1. M/S. CHARANSHEELA ADVISORY PVT. LTD 72/2, SARAT BOSE ROAD OPP. LANSDOWN KOLKATA 700 025 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 7 M/S. CHARANSHEELA ADVISORY PVT. LTD M/S. CHARANSHEELA ADVISORY PVT. LTD DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -10(1), KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES ITA NO. 2022/KOL/2018 ASSESSMENT YEARS: 2014-15 M/S. CHARANSHEELA ADVISORY PVT. LTD . TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES