AS-7 is applicable to a “Contractor” and not to a “Developer”

ITO Vs. M/s. Meeti Investment and Consultancy P. Ltd. (ITAT Ahemdabad) Brief facts of the case are that assessee is engaged in the business of sale/purchase of TDR, income by way of stallage and construction activity. During the assessment proceedings AO found that assessee had received advanced booking amount on account of the construction activity and the WIP was shown at Rs. 1,99,97,296/-. However, the assessee had not shown any profit on the ground that it was following project completion method. The AO rejected the assessee’s method and held that as per AS-7, it has to follow percentage...