| The Tax Publishers2020 TaxPub(DT) 2899 (Ctk-Trib) INCOME TAX ACT, 1961
Section 263
Since AO made proper and sufficient enquiry on the issues including issue of revenue recognition of assesee by following percentage completion method, project-wise revenue recognition, therefore, assessment order could not be held as erroneous and prejudicial on the reasoning of Pr.CIT that assessee recognized lesser revenue from certain project and no proper verification to recognize the revenue was done by AO.
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Revision under section 263 - Erroneous and prejudicial order - Proper enquiry made by AO as regards impugned issue -
Assessee was a builder developing of house projects Pr.CIT held assessment order as erroneous and preudicial to the interest of revenue on the ground of assessee having recognized lesser revenue from certain project and no proper verification to recognize the revenue was done by AO. Assessee submitted that it had been consistently following percentage completion method of accounting in recoginizing the revenue in accordance with AS-7 as prescribed by (ICAI) which was clearly stated in audited financial statements. Held: It was clearly discernible that AO by way of notice under section 142(1), dated 26-10-2015 and 30-7-2015 called for documents/information which included copy of assessee's audited balance sheet, profit and loss account, annual report alongwith details of bank accounts maintained including bank name, branch details and a/c no. supported with bank statements for the financial year 2012-13 relevant to assessment year 2013-14. Also, AO called for details of party-wise purchase and sales of land/flat, details of project-wise percentage of construction as on 31-3-2013, estimated cost of each project and estimated sale price thereof and closing stock details with detail of valuation and method of valuation, which were submitted by assessee and this fact had not been negated or disputed by Pr.CIT. Thus, it could be said that AO made proper and sufficient enquiry on the issues including issue of revenue recognition of assesee by following percentage completion method, project-wise revenue recognition. Accordingly, it was not a case of no enqiry, inadequate enquiry or insufficient enquiry and therefore, without holding so, impugned assessment order could not be tagged or alleged as erroneous and prejudicial as there was no need to take a different view on a technical reason.
Relied:CIT v. Reita Biscuits Co. (P) Ltd., (2009) 309 ITR 154 (P&H) : 2009 TaxPub(DT) 140 (P&H-HC), DIT v. Jyoti Foundation, (2013) 357 ITR 388 (Del) : 2013 TaxPub(DT) 2463 (Del-HC), Nanda Kishore Agarwalla v. Pr. CIT in ITA No. 212/CTK/2017 and Pr. CIT v. Kessoram Industries Ltd., (2019) 105 CCH 99 (kol) : 2019 TaxPub(DT) 5779 (Cal-HC). (v) ITO v. DG Housing Projects, (2012) 343 ITR 329(Del) : 2012 TaxPub(DT) 1727 (Del-HC)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
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