Allowability of estimated loss on valuation of fixed price contract under the Income Tax Act, 1961

RELEVANT PARAGRAPHS: 9. We have considered the rival submissions and perused the record o the case. The short dispute is whether the anticipated loss on the valuation of fixed price contract, in view of the mandatory requirements of AS-7, is to be allowed in the year in which the contract has been entered into or it is to be spread over a period of contract, as was done by the assessee in earlier years. As far as the change in the method of valuation of work-in-progress is concern, it cannot be disputed that in view of mandatory requirements of AS-7, it was a bona fide change in the method of ...