Case Law Details
DCIT Vs Vessella Constructions (ITAT Hyderabad)
In a landmark decision, the Income Tax Appellate Tribunal (ITAT) Hyderabad has passed a crucial verdict in the case of DCIT Vs Vessella Constructions. The tribunal directed for a re-adjudication concerning the gains earned by the assessee, Vessella Constructions, on the transfer of land related to villas sold. This article aims to provide an in-depth analysis of this case, covering its background, the main issues, and the implications of the decision.
Background
The crux of the matter is the addition of Rs. 12,07,70,833/- towards profits/gains earned by Vessella Constructions on the transfer of land related to the villas sold. The Assessing Officer argued that Vessella Constructions had not disclosed the entire sale consideration in its income for the assessment year 2013-14. The assessee had taken a stance that they were following the Percentage Completion Method for recognizing the revenue.
The Issue of Revenue Recognition
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