DCIT Vs Sashwat Construwell Private Limited (ITAT Mumbai)
ONE WING MAY FLY, BUT PROFITS CANNOT—PROJECT COMPLETION METHOD PREVAILS WHERE ALL WINGS FORM ONE INTEGRATED PROJECT
The Mumbai ITAT has held that where different wings of a real-estate development constitute one integrated project & the assessee has consistently followed the Project Completion Method, profit from one wing cannot be independently brought to tax merely because that wing has received the Occupancy Certificate & some units therein have been sold. Following its decision in the assessee’s own case for the preceding year, the Tribunal upheld the deletion of an addition of ₹7.86 crore.
Facts of the case
The assessee, Sashwat Construwell Private Limited, was engaged in the business of builders, developers & dealers in real estate. It had undertaken a project known as “Bhoomi Celestia” at Malad West, Mumbai.
The project consisted of three wings, namely A, A1 & B. Under a development arrangement entered into with American Springs and Pressings Works Private Limited, the assessee was entitled to a specified share in the saleable area of the project.
Wing B of the project received its Occupancy Certificate in December 2021. During the year, the assessee had sold part of the area falling to its share in Wing B.
