Case Law Details
Granite Gate Properties (P.) Ltd. Vs PCIT (Delhi High Court)
FACTS –
Assessee is a company engaged in real-estate development and started construction of 2 housing projects Lotus Boulevard and Lotus Panache in AY 2010-11 and 2011-12. Assessee was following Percentage of Completion Method (PoC) of accounting. Assessee didn’t recognized revenue of Lotus Boulevard and Lotus Panache till construction and development had crossed threshold of 30%.
Threshold of 30% of Lotus Boulevard and Lotus Panache were crossed during AY 2010-11 and 2011-12 and accordingly proportionate cost and revenue was booked in Profit & loss account. Indirect expenses of selling, administrative and other expenses, commission and finance were treated and shown in the return of AY 2010-11 and 2011-12.
Return for AY 2010-11 and 2011-12 were taken up for scrutiny assessment. Assessee submitted that as per PoC method they rightly didn’t accounted for revenue in respect of Lotus Boulevard for AY 2010-11 and Lotus Panache for AY 2011-12 since the project had not crossed threshold of 30%.
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