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Developer to follow AS 11 issued by ICAI & not AS-7 which applies to contractor
Case Law Details
- Case Name
- Aadarh Developers Vs ACIT (ITAT Rajkot)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2013-14
- Courts
- All ITAT, ITAT Rajkot
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Aadarh Developers Vs ACIT (ITAT Rajkot)
Admittedly, the assessee is a developer and not a works contractor. Therefore, the revenue has to be recognized by the assessee as per accounting standard 11 issued by the ICAI and not as per the accounting standard 7 which is applicable to the contractor.
The accounting standard 11 says that the revenue should be recognized once the risk and the rewards are transferred to the prospective buyer. In the case on hand, the risk and reward is transferred upon the execution of the sale deed which is a vital piece of evidence to draw an inference that the prop...
