Want to know more
Enter the details and we'll call you soon

Name :

Company Name :

City :

Mobile No. :

Email id :

  

Thank you for your details



Our Executive will reach you shortly.

Your Session Will Expire in   seconds.
If you do not wish to log-out, choose 'Let me continue'
Reset SessionCancel Session
 
Skip Navigation Links

No infirmity if real estate developer changes its method of accounting in view of revised AS-7: HC

May 14, 2020[2020] 116 taxmann.com 554 (Karnataka)
29 Views

INCOME TAX : Where for previous year, revenue had accepted method of accounting followed by assessee-real estate developer and in light of ICAI guidance note of AS-7 as applicable to real estate developers, assessee itself had changed its method of accounting for subsequent year from Project Completion Method to Percentage Completion Method, in view of fact that effect was revenue neutral in assessment year in question, no addition could be made

• Assessee, carrying on business of real estate, entered into a development agreement in terms of which owner and assessee would share specified percentage of super built up area and, hence, they sold respective portions and entered into agreement with proposed buyers to construct as per their specification - Assessing Officer noticed that assessee had adopted Completed Contract Method of accounting - On ground that assessee being a real estate company, had compulsorily to follow Percentage Completion Method as per ICAI accounting standard AS-7, made addition to income - However, revenue had accepted assessee's method of accounting for previous year - In light of guidance note of AS-7 as applicable to real estate developers, assessee itself had changed its method of accounting and for subsequent year, it had changed from Project Completion Method to Percentage Completion Method - Effect was revenue neutral in assessment year in question - Held, that impugned addition was to be deleted.

read more

taxmann.com
Payment
Best view in 1140 x 768