Santha Build-Tech India Pvt. Ltd., CHENNAI V. DCIT, CHENNAI

ITA 950/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9429 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 23-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-04-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: N ANUSH SHANK E R
• Section: 143(3); 153A; 234B; 2

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER I.T.A.NO S . 2 308, 2309 & 2310/MDS/2013 AND 949 & 950/MDS/2015 ASSESSMENT YEAR S : 2008 - 09, 2009 - 10 & 2011 - 12 AND 2007 - 08 & 2010 - 11 M/S. SANTHA BUILD - TECH INDIA PVT. LTD., T.S. 64, SIDCO INDUSTRIAL ESTATE, GUINDY, CHENNAI. [PAN: A A C C S 9327H ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX , C ENTRAL CIRCLE III ( 1 ), CHENNAI . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI N. ANUSH SHANK E R, C.A. / RESPONDENT BY : SHRI A. V. SREEKANTH, J CIT / DATE OF HEARING : 23 . 0 3 .201 6 / DATE OF P RONOUNCEMENT : 29 . 0 4 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH E S E FIVE APPEAL S FILED BY THE SAME ASSESSEE IN WHICH THREE APPEALS ARE DIRECTED AGAINST COMMON ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) (C) I I , CHENNAI , DATED 3 0 . 0 9 .20 1 3 RELEVANT TO THE ASSESSMENT YEAR S 2008 - 09, 2009 - 10 AND 20 11 - 1 2 . OTHER TWO APPEALS ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF THE LD. CIT(A)(C) 18, CHENNAI BOTH DATED 28.01.2015 FOR THE ASSESSMENT YEARS 2007 - 08 AND 2010 - 11. TH E ASSESSEE HAS RAISED THE FOLLOWING COMMON GROUNDS FOR ALL THE ASSESSMENT YEARS: I.T.A. NO S . 2308 - 2310 /M/ 13 & I.T.A. NOS. 949 - 950/M/15 2 1. THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF THE A. O. , WHEN THE A. O HAD WRONGLY MADE ADDITIONS, WHICH WERE NOT BASED ON ANY INCRIMINATING EVIDENCE FOUND DURING SEARCH ACTION CONDUCTED IN THE CASE OF THE APPELLANT . 2. THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THAT NO INCRIMINATING EVIDENCES WERE FOUND DURING SEARCH ACTION AND THEREFORE THE A. O. OUGHT NOT TO HAVE MADE THE ADDITIONS WHICH ARE NOT BASED ON ANY EVIDENCE FOUND DURING SEARCH ACTION, THEREBY RENDERING THE ADDITIONS BEYOND JURISDICTION . 3. THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ADDITION MADE BY THE LEARNED A. O. WHICH WAS WITHOUT ANY BASIS AND NOT SUPPORTED BY FACTS OR LEGAL PRINCIPLES. 4. T HE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE APPELLANT HAS BEEN FOLLOWING THE PROJECT COMPLETION METHOD CONSISTENTLY OVER THE YEARS . 5. THE LEARNED CIT(A) ERRED IN IGNORING THE SETTLED PRINCIPLE THAT THE TAXPAYERS ARE ENTITLED T O FOLLOW A PARTICULAR METHOD OF ACCOUNTING, AS LONG AS IT IS AN ACCEPTED METHOD AND IS CONSISTENTLY FOLLOWED BY THE ASSESSEE. 6. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT 'PROJECT COMPLETION METHOD' IS AN ACCEPTED AND VALID METHOD OF A CCOUNTING, WELL RECOGNIZED BY LAW AND SUPPORTED BY DECISIONS OF THE COURTS. 7. THE LEARNED CIT(A) ERRED IN CONCLUDING THAT THE 'PROJECT COMPLETION METHOD' IS NO MORE IN EXISTENCE SINCE 104.2003, IN TOTAL DISREGARD TO THE PRINCIPLES ENUNCIATED BY THE HIGHER COURT S ON THIS ISSUE . 8. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE POINT OF SALE OCCURS ONLY AT THE TIME OF HANDING OVER OF POSSESSION AND HENCE IS THE RIGHT POINT OF RECOGNITION OF INCOME . 9. THE LEARNED CIT(A) ERRED IN UPHOLDING THE DECISION OF THE A.O IN TAXING THE INCOME ON THE BASIS OF COST OF CONSTRUCTION, THEREBY CHARGING THE AMOUNTS TO TAX, WHEN THE INCOME HAS NOT EVEN ACCRUED. I.T.A. NO S . 2308 - 2310 /M/ 13 & I.T.A. NOS. 949 - 950/M/15 3 10. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE A.O IN ADOPTING 8% AS THE PERCENTAGE OF INCOME, WITHOUT GIVING ANY BASIS FOR ADOPTING THIS PERCENTAGE . 11. THE LEARNED CIT (A) ERRED IN NOT DELETING THE LEVY OF INTEREST U/S 234A AND 234 B OF THE INCOME TAX ACT, 1961, WHICH HAS BEEN RAISED WITHOUT CREATING A CHARGE IN T HE ASSESSMENT ORDER AS A CHARGE WAS NOT CREATED BY THE ASSESSING OFFICER AS PART OF THE ORDER, THE LEVY OF INTEREST IS ILLEGAL AND IS INVALID AND VOID AB - INITIO. 12. ALL THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER. 13. THE APPELL ANT CRAVES LEAVE TO ADD, TO ALTER OR AMEND ALL OR ANY OF THE AFORE - STATED GROUNDS OF APPEAL. 2. THE FIRST EFFECTIVE GROUND RAISED IN THE APPEALS OF THE ASSESSEE IS WITH REGARD TO ADOPTION OF 8% OF THE CONSTRUCTION COST UNDER WORK - IN - PROGRESS METHOD . TH E FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE BUILDER AND THERE WAS A SEARCH IN THE GROUP CASE OF M/S . OM S HAKTHY AGENCIES (MADRAS) PVT. LTD. ON 02.07.2010. THE ASSESSEE HAS FILED ORIGINAL RETURN OF INCOME ON 29.09.2011 ADMITTING A TOTAL LOSS OF .4 ,46 ,892/ - . THE A SSESSMENT WAS COMPLETED UNDER SECTION 143(3) R . W . S . 153B OF THE INCOME TAX ACT , 1961 [ ACT IN SHORT] ON 30.03.2013 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT . 1,12,44,315/ - BY MAKING VARIOUS ADDITIONS . 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A), DISMISSED THE GROUND RAISED IN THE APPEALS OF THE ASSESSEE. I.T.A. NO S . 2308 - 2310 /M/ 13 & I.T.A. NOS. 949 - 950/M/15 4 4. AGGRIEVED , THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL FOR ALL THE ASSESSMENT YEARS. BY RELYING ON THE DECISION IN THE CASE OF UNIQUE ENTERPRISES V. ITO [2010 - TIOL - 737 - ITAT - MUM] , THE LD. COUNSEL FOR THE ASSESSEE HAS PLEADED THAT THE GROUND RAISED BY THE ASSESSEE SHOULD BE ALLOWED. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDER P ASSED BY THE LD. CIT(A). 5. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE MAIN DISPUTE IN THIS CASE IS FOR COMPUTATION OF PROFITS, WHETHER PROJECT COMPLETION METHOD ADOPTED BY T HE ASSESSEE IS CORRECT OR PERCENTAGE OF C OMPLETION M ETHOD ADOPTED BY THE ASSESSING OFFICER IS CORRECT TO DETERMINE THE REVENUE AND COSTS OF A PROJECT . BOTH THE ASSESSING OFFICER AND THE LD. CIT(A) HAVE OBSERVED THAT THE PROJECT COMPLETION METHOD ADOPTED BY THE ASSESSEE HAS NO EXISTENCE AT ALL SINCE 01.04.2003. WE FIND THAT B EFORE THE LD. CIT(A), THE ASSESSEE HAS RELIED ON VARIOUS DECISIONS INCLUDING THE DECISION IN THE CASE OF UNIQUE ENTERPRISES V. ITO [2010 - TIOL - 737 - ITAT - MUM] FOR THE A SSESSMENT YEAR 2005 - 06 , WHEREIN , IT WAS HELD THAT THE ACCOUNTING STANDARDS (AS) 7 - CONSTRUCTION C ONTRACT (REVISED) ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (ICAI) IS APPLICABLE ONLY TO THE CONTRACTORS AND NOT TO BUILDERS AND REAL ESTATE DEVELOPERS. ACCORDIN GLY, THE PROJECT COMPLETION METHOD FOLLOWED BY THE TAX PAYER FOR RECOGNIZING REVENUE IN THE BOOKS OF ACCOUNTS CANNOT BE REGARDED AS UNREASONABLE. FURTHER, THE TAX DEPARTMENT CANNOT CHANGE THE METHOD OF ACCOUNTING. DESPITE NOT CONTROVERTING I.T.A. NO S . 2308 - 2310 /M/ 13 & I.T.A. NOS. 949 - 950/M/15 5 THE DECISIONS O F THE MUMBAI BENCHES OF THE TRIBUNAL IN THE CASE OF UNIQUE ENTERPRISES V. ITO (SUPRA), THE LD. CIT(A) COULD NOT DISTINGUISH AS TO WHAT WAS THE REVENUE LOSS BY FOLLOWING THE PROJECT COMPLETION METHOD ADOPTED BY THE ASSESSEE. THE ASSESSMENT ORDER IS VERY CRY PTIC AND NOT GIVEN COMPLETE FACTS AND FIGURES TO DEMONSTRATE THAT THE IMPUGNED METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE RESULTS IN UNDERESTIMATION OF PROFIT AND THEREFORE, THE ASSESSING OFFICER AND THE LD. CIT(A) REJECTED THE METHOD ADOPTED BY THE ASSE SSEE. 6. FURTHER, IN THE CASE OF AWADHESH BUILDERS V. ITO [2010] 37 SOT 122 (MUM), THE MUMBAI BENCHES OF ITAT HAS OBSERVED AND HELD AS UNDER: 2.6 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE ASSESSEE IS A BUILDER AND REAL ESTATE DEVELOPER. THE DISPUTE IS REGARDING YEAR OF ACCOUNTING OF INCOME. THE DISPUTE IS NOT WHETHER THE ASSESSEE HAD UNDERESTIMATED THE INCOME IN A PARTICULAR YEAR. THE ASSESSEE HAS BEEN FOLLOWING PROJECT COMPLETION METHOD AS PER WHICH INCOME HAS TO BE ACCOUNTED IN THE YEAR IN WHICH PROJECT IS COMPLETE AND THE FLATS ARE SOLD. THE ASSESSEE IN THE EARLIER TWO YEARS FOLLOWED THE SAME METHOD WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT. THOUGH THE EARLIER RETURNS WERE ACCEPTED SUMMARILY UNDER SECTION 143(1), THE FACT IS THAT THESE ASSESSMENTS HAVE BECOME FINAL AND METHOD FOLLOWED BY THE ASSESSEE IN THESE YEARS STANDS ACCEPTED BY THE DEPARTMENT. HOWEVER, IN THE CURRENT YEAR, THE DEPARTMENT HAS TRIED TO ASSESS THE INCOME ON THE BASIS OF PERCENTAGE COMPLETION ME THOD AS PER WHICH THE INCOME HAS TO BE ASSESSED ON THE BASIS OF PERCENTAGE OF WORK COMPLETED DURING THE YEAR. THE CASE OF THE DEPARTMENT IS THAT THE PROFIT IS INBUILT INTO THE QUANTUM OF WORK DONE BY THE ASSESSEE AND, THEREFORE, THE PROFIT HAS TO BE COMPUT ED ANNUALLY ON THE BASIS OF WORK DONE IN A PARTICULAR YEAR. THE DEPARTMENT HAS PLACED RELIANCE ON THE JUDGMENT OF HON'BLE HIGH COURT OF DELHI IN CASE OF TIRATH RAM AHUJA (SUPRA) AND ON THE JUDGMENT OF HON'BLE HIGH COURT OF PATNA IN CASE OF SRI SUKHDEODAS J ALAN (SUPRA). REFERENCE HAS ALSO BEEN MADE TO THE DECISION OF TRIBUNAL IN CASE OF CHAMPION CONSTRUCTION CO. (SUPRA). I.T.A. NO S . 2308 - 2310 /M/ 13 & I.T.A. NOS. 949 - 950/M/15 6 2.7 HOWEVER, ON CAREFUL PERUSAL OF THE ABOVE ORDERS, WE FIND THAT THE SAME ARE DISTINGUISHABLE. THE CASE OF TIRATH RAM AHUJA (SUPRA) AND SRI SUKHDEODAS JALAN (SUPRA) RELATED TO THE PROFIT DECLARED BY A CONTRACTOR. THE CASE OF A CONTRACTOR IS DIFFERENT FROM THAT OF THE REAL ESTATE DEVELOPER. THE PROFIT EARNED BY A CONTRACTOR DEPENDS UPON THE QUANTUM OF WORK DONE AND IS NOT DEPENDENT ON WHET HER THE FLATS/SHOPS CONSTRUCTED ARE ACTUALLY SOLD BY THE OWNER OR NOT. THEREFORE, IN CASE OF A CONTRACTOR, PROFIT CAN BE ESTIMATED ON THE BASIS OF WORK DONE. IN CASE OF REAL ESTATE DEVELOPER, HE CAN EARN THE PROFIT ONLY WHEN THE SPACE CONSTRUCTED SOLD. IN CASE, DUE TO SOME REASONS, THE PROJECT IS TERMINATED OR IS ABANDONED THE BUILDER HAS TO REFUND THE ADVANCES RECEIVED FROM THE BUYERS AND IN THAT CASE, THERE CANNOT BE ANY PROFIT BECAUSE THE FLATS/ SHOPS COULD NOT BE SOLD AS THE CONSTRUCTION REMAINED INCOMP LETE. IN THAT CASE, IT WILL BE ONLY A CASE OF INVESTMENT BY THE BUILDER PROFIT FROM WHICH WILL ARISE ONLY ON SALE OF FLATS. SIMILARLY THE CASE OF CHAMPION CONSTRUCTION CO. (SUPRA) IS ALSO DISTINGUISHABLE AS IN THAT CASE CONSTRUCTION WAS COMPLETE AND 80 PER CENT OF THE FLATS HAD BEEN SOLD. 2.8 IT IS ESTABLISHED LEGAL POSITION THAT AN ASSESSEE CAN FOLLOW ANY RECOGNISED METHOD OF ACCOUNTING AND CONDITION IS THAT THE SAME METHOD HAS TO BE FOLLOWED CONSISTENTLY. IN CASE OF A BUILDING PROJECT, THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA WHICH IS AN AUTHORITY ON PRESCRIBING ACCOUNTING STANDARDS HAD PRESCRIBED ACCOUNTING STANDARD AS - 7 IN 1983 FOR ACCOUNTING OF INCOME IN RESPECT OF REAL ESTATE PROJECTS AND IN TERMS OF AS - 7 WHICH WAS APPLICABLE TO BOTH CONTRACT OR AND REAL ESTATE DEVELOPER, A PERSON IS FREE TO FOLLOW EITHER OF PROJECT COMPLETION METHOD OR PERCENTAGE COMPLETION METHOD DEPENDING UPON THE NATURE OF PROJECT. THE ASSESSEE, IN THIS CASE, HAS FOLLOWED PROJECT COMPLETION METHOD WHICH IS ONE OF THE PRESCR IBED METHODS BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA. THE ACCOUNTING STANDARD AS - 7 WAS SUBSEQUENTLY REVISED AND REVISED STATEMENTS WERE MADE APPLICABLE TO HOUSING PROJECTS UNDERTAKEN ON OR AFTER 1 - 4 - 2003 AND AS PER THE REVISED STANDARDS, REVISED AS - 7 WAS APPLICABLE ONLY TO A CONTRACTOR AND IN CASE OF REAL ESTATE DEVELOPER, REVISED AS - 9 WAS PRESCRIBED AS PER WHICH THE INCOME HAS TO BE ACCOUNTED ONLY ON COMPLETION OF PROJECT WHEN THE FLATS ARE SOLD, I.E., WHEN LEGAL TITLE PASSES TO THE BUYER OR WHE N SELLER ENTERS INTO AGREEMENT WITH THE BUYER FOR THE SALE AND GIVES POSSESSION TO THE BUYER UNDER THE AGREEMENT. IN THIS CASE, THE PROJECT WAS NOT COMPLETE DURING THE YEAR AND, THEREFORE, THERE WAS NO QUESTION OF PASSING ON OF THE TITLE OF OWNERSHIP OR HA NDING OVER OF THE POSSESSION. THUS, EVEN IN TERMS OF THE REVISED ACCOUNTING STANDARD WHICH WAS APPLICABLE FOR MOST PART OF THE WORK DONE BY THE ASSESSEE THE INCOME HAD BEEN CORRECTLY DECLARED AS PER PROJECT COMPLETION METHOD IN THE YEAR OF COMPLETION. EVEN IF ONE APPLIES THE OLD ACCOUNTING STANDARDS ON THE GROUND THAT THE PROJECT OF THE ASSESSEE HAD BEEN UNDERTAKEN PRIOR TO 1 - 4 - 2003, THE ASSESSEE WAS FREE TO FOLLOW EITHER I.T.A. NO S . 2308 - 2310 /M/ 13 & I.T.A. NOS. 949 - 950/M/15 7 PERCENTAGE COMPLETION METHOD OR PROJECT COMPLETION METHOD. THE ASSESSEE HAS FOLLOWED P ROJECT COMPLETION METHOD WHICH WAS ONE OF THE PRESCRIBED METHODS AND THE SAME METHOD HAS BEEN ACCEPTED BY THE DEPARTMENT IN THE EARLIER YEARS. DEPARTMENT, THEREFORE, CANNOT REJECT THE METHOD AND APPLY PERCENTAGE COMPLETION METHOD IN A SUBSEQUENT YEAR. THIS VIEW IS ALSO SUPPORTED BY SEVERAL DECISIONS OF THE TRIBUNAL AS MENTIONED IN PARA 2.5 OF THIS ORDER EARLIER WHICH HAVE BEEN RELIED UPON BY THE LEARNED AR OF THE ASSESSEE. THE ASSESSEE ALREADY, FOLLOWING THE SAME METHOD, HAS DECLARED THE ENTIRE INCOME IN AS SESSMENT YEAR 2007 - 08 WHEN THE PROJECT WAS COMPLETE. THE SAME INCOME, THEREFORE, CANNOT BE ASSESSED IN THE EARLIER YEAR BY REJECTING THE REGULAR AND RECOGNISED METHOD BEING FOLLOWED BY THE ASSESSEE. WE ARE, THEREFORE, UNABLE TO SUSTAIN THE ORDER OF CIT(A) UPHOLDING THE ORDER OF ASSESSING OFFICER REJECTING THE METHOD FOLLOWED BY THE ASSESSEE. THE ORDER OF CIT(A) IS SET ASIDE AND THE CLAIM OF THE ASSESSEE IS ALLOWED. 3. THE APPEAL OF THE REVENUE IN ITA NO. 3695/M./2008. IN THIS APPEAL, THE ONLY DISPUTE RAI SED BY THE REVENUE IS REGARDING ESTIMATION OF NET PROFIT. THE ASSESSING OFFICER HAD ESTIMATED THE NET PROFIT RATE AT 10 PER CENT ON THE ADVANCES RECEIVED TILL THE END OF THE RELEVANT ASSESSMENT YEAR. THE ASSESSEE DISPUTED THE MATTER AND SUBMITTED BEFORE CI T(A) THAT IN THE ASSESSMENT YEAR 2007 - 08 ON COMPLETION OF THE PROJECT THE ASSESSEE HAD DECLARED NET PROFIT RATE OF 6.95 PER CENT ON THE BASIS OF AUDITED ACCOUNTS. THEREFORE, ADOPTING NET PROFIT RATE AT 10 PER CENT BY THE ASSESSING OFFICER WAS NOT CORRECT. CIT(A) WAS SATISFIED BY THE CLAIM OF THE ASSESSEE AND OBSERVED THAT IT WOULD BE APPROPRIATE TO ADOPT THE RATE SHOWN BY THE ASSESSEE ON THE BASIS OF BOOKS OF ACCOUNT MAINTAINED FOR ASSESSMENT YEAR 2007 - 08 WHICH WERE AUDITED. HE, ACCORDINGLY, DIRECTED THE AS SESSING OFFICER TO ADOPT THE SAME RATE OF PROFIT AS TAKEN IN ASSESSMENT YEAR 2007 - 08. AGGRIEVED BY THE SAID DECISION THE REVENUE IS IN APPEAL. 3.1 WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. AS WE HAVE ALREAD Y HELD THAT INCOME OF THE PROJECT CAN BE ASSESSED ONLY IN ASSESSMENT YEAR 2007 - 08 WHEN THE PROJECT WAS COMPLETE AND NOT IN THIS YEAR THE ISSUE OF ESTIMATION OF PROFIT HAS BECOME INFRUCTUOUS. WE, THEREFORE, DISMISS THE APPEAL OF THE REVENUE AS HAVING BECOME INFRUCTUOUS IN VIEW OF OUR DECISION GIVEN IN RELATION TO THE APPEAL OF THE ASSESSEE. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED WHEREAS THAT BY THE REVENUE IS DISMISSED. I.T.A. NO S . 2308 - 2310 /M/ 13 & I.T.A. NOS. 949 - 950/M/15 8 7 . THUS, IN OUR OPINION, P ROFITS IN THE CASE OF A TRADE ADVENTURE/PR OJECT MAY BE DETERMINABLE IN EACH YEAR WITHOUT WAITING FOR THE WHOLE ADVENTURE/PROJECT TO BE FINALLY COMPLETELY, YET THERE IS ALSO ANOTHER METHOD OF ACCOUNTING FOR PROFITS OF THE ADVENTURE/PROJECT REFERRED TO AS 'COMPLETED PROJECT' METHOD OF ACCOUNTING, WH ICH TOO IS A RECOGNIZED METHOD, WHICH THE ASSESSEE HAS BEEN FOLLOWING CONSISTENTLY. IT MAY BE QUITE RELEVANT TO OBSERVE HERE THAT ONE NEEDS BE CONSCIOUSLY AWARE THAT THE PROFITS OF EACH YEAR BEING DETERMINABLE AT THE YEAR END IS ONE THING AND THAT THE PROF ITS OF EACH YEAR ARE ESSENTIALLY TO BE DETERMINED AT THE END OF EACH YEAR IS ANOTHER THING. THE MERE FACT THAT THERE DOES EXIST A METHOD OF ACCOUNTING FOR PROFITS OF EACH YEAR IS NO JUSTIFICATION FOR REJECTING AN EQUALLY RECOGNIZED METHOD OF ACCOUNTING WHE REBY THE PROFITS OF THE ADVENTURE/PROJECT ARE DETERMINED WHEN THE WHOLE ADVENTURE/PROJECT IS COMPLETED; BEING CONSISTENTLY FOLLOWED BY AN ASSESSEE, WITHOUT SUFFERING FROM AN INFIRMITY/ DEFECT CALLING FOR A REJECTION OF THE SAME FOR THE REASON THAT TRUE/FAI R PROFITS OF THE ADVENTURE/PROJECT BEING NOT DEDUCIBLE THEREBY. THE A SSESSING O FFICER HAVING NOT DRAWN ANY FINDING THAT THE ACCOUNTS OF ASSESSEE SUFFER FROM ANY DEFECT NOR THAT FROM THE METHOD OF ACCOUNTING FOLLOWED BY ASSESSEE, TRUE/CORRECT PROFITS OF ASS ESSEE CANNOT BE DEDUCED AND THE ASSESSEE HAVING BEEN FOLLOWING THE 'COMPLETED PROJECT' METHOD CONSISTENTLY, WHICH BEING A RECOGNIZED METHOD OF ACCOUNTING, THE ASSESSEE'S METHOD OF ACCOUNTING CANNOT BE REJECTED NOR IS THERE ANY JUSTIFICATION FOR ESTIMATING ASSESSEE'S PROFITS OF THE I.T.A. NO S . 2308 - 2310 /M/ 13 & I.T.A. NOS. 949 - 950/M/15 9 YEAR FROM THE ASSESSEE'S BUSINESS ACTIVITY OF BUILDING CONSTRUCTION BY RES ORTI NG TO APPLYING OF PERCENTAGE OF PROFIT TO THE WORK - IN - PROGRESS OF THE YEAR. 8. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE THE ORDER S OF AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER TO ACCEPT THE METHOD ADOPTED BY THE ASSESSEE FOR ALL THE ASSESSMENT YEARS. 9 . WITH REGARD TO CHARGING OF INTEREST UNDER SECTION 234A OF THE ACT, FOR THE ASSESSMENT YEAR 2008 - 09, THE ASSESSEE HAS FILED ITS ORIGINAL RETURN OF INCOME ON 08.11.2008 ADMITTING A TOTAL INCOME OF .NIL [ACTUALLY LOSS OF .9,98,900/ - ] . THE SEARCH WAS CONDUCTED ON 02.07.2010. NOTICE UNDER SECTION 153A OF THE ACT WAS SERVED ON THE ASSESSEE ON 09.02.2012 AND IN RESPONSE, THE ASSESSEE FILED THE RETURN ON [DATE IS NOT CLEAR SINCE THE FONT USED IS VERY SMALL AND THE PRINTOUT IS VERY FADE]. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THE INTEREST UNDER SECTION 234A IS CHARGEABLE FROM THE DATE OF EXPIRY OF THE NOTICE PERIOD GIVEN UNDER SECTION 153A TO THE DATE OF COMPLETING THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 153A OF THE ACT, AS HELD BY THE TRIBUNAL IN THE CASE OF ACIT V. VN. DEVADOSS [93 DTR 73 CHENNAI (TRIB.). THE INTEREST UNDER SECTION 234B IS TO BE LEVIED ONLY ON THE ADDITIONAL TAX LE VIED ON THE ENHANCED INCOME DETERMINED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT . THEREFORE, THE PERIOD OF CHARGING OF INTEREST SHOULD BE FROM THE DATE OF DETERMINATION OF INCOME UNDER SECTION 143(1) OR 143(3) TO THE DETERMINATION OF ENHANCED INCOME UNDE R SECTION 143(3) R.W.S. 153A OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE PERIOD I.T.A. NO S . 2308 - 2310 /M/ 13 & I.T.A. NOS. 949 - 950/M/15 10 OF CHARGING INTEREST AND DECIDE THE ISSUE AFRESH. ACCORDINGLY, THIS GROUND OF APPEALS FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10 . IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 29 TH APRIL , 201 6 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 29 . 0 4 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.