Income Tax Appellate Tribunal Chennai M/S. Kone Elevators Pvt. Ltd., Chennai vs Acit, Chennai on 20 June, 2017 आयकर अपील य अ धकरण, 'सी' यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL , 'C' BENCH, CHENNAI ी ए. मोहन अलंकामणी, लेखा सद य एवं ी ध!ु वु" आर.एल रे #डी, या%यक सद य के सम& BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER आयकरअपीलसं./I.T. A. Nos.1182/Mds/2012 & आयकरअपीलसं./I.T. A. Nos.2352 to 2354/Mds/2016 ( नधा रणवष / Assessment Years: 200607, 200809 & 2009 10) M/s. Kone Elevator India Private Vs The Asst. Commissioner of Income Limited, Tax, C/o.N.C. Rajagopal & Co., Company CircleII(4), Chartered Accountants, Chennai 34. No.22, Krishnaswamy Avenue, Mylapore, Chennai 600 004. PAN: AAACK2567P (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओरसे/ Appellant by : Shri G. Baskar, Advocate यथ क ओरसे/Respondent by : Ms. Jayanthi Krishnan, JCIT सन ु वाईक तार ख/Da t e of h e ar in g : 26.04.2017 घोषणाक तार ख /D at e of Pr on o unc em en t : 20.06.2017 आदे श / O R D E R Per A. Mohan Alankamony, AM: These appeals by the assessee are directed against the order passed by the learned Commissioner of Income Tax, Chennai dated 29.03.2012 in C.No.218(38)/CIT1/263/201112 dated 29.03.2012 for the assessment year 200607 passed U/s. 263 r.w.s. 143(3), 250(6) of the Act and the order of the learned Commissioner of Income Tax (Appeals) in ITA No.211, 209,212/201314 dated 31.03.2016 for the assessment years 200607, 200809 & 200910 passed U/s. 250(6) r.w.s. 143(3) of the Act. 2 ITA No.1182/Mds/2012 ITA Nos.2352 to 2354/Mds/2016 2. ITA No.1182/Mds/2012: The assessee has raised several grounds against the order passed by the Ld.CIT U/s. 263 of the Act, however the crux of the issue is that the Ld.CIT without appreciating the revenue recognition principles consistently followed by the assessee as per AS9 held that the order passed by the Ld.AO is erroneous and prejudicial to the interest of the Revenue without any basis by holding that AS7 would be applicable in the case of the assessee. 2.1 Since, both the parties agreed that the appellate order passed U/s.250(6) , 143(3) of the Act may be heard on merits, the appeal of the assessee against the order passed by the Ld.CIT U/s.263 of the Act is hereby dismissed. 3. ITA No.2352, 2353 & 2354/Mds/2016: In all these appeals, the assessee has raised identical grounds. For the sake of convenience, those grounds are briefly stated herein below for adjudication, which are acknowledged by both the parties at the time of hearing: 3 ITA No.1182/Mds/2012 ITA Nos.2352 to 2354/Mds/2016 "The assessee has been consistently recognizing its income on completion of the sale of elevators/escalators/lifts etc., however only with respect to the contract with Delhi Metro Rail Ltd (DMRL), the assessee was recognizing its income on percentage completion method. On the above practice followed by the assessee, the Ld.CIT(A) has erred by holding that the appellant is bound to follow Accounting Standard 7 and thereby adopt percentage completion method for all its contract irrespective of the time duration involved in such contracts and with such direction remitted back the matter to the file of Ld.AO." 3.1 The brief facts of the case are that the appellant is a company involved in the business of design, manufacture, supply, erection, installation and maintenance of lifts and escalators apart from being engaged in software export. The only dispute in the appeals is the revenue recognition method to be followed with respect to manufacture and sale of the above mentioned products of the assessee. The assessee was recognizing its income towards the manufacture sale and erection of its products consistently under project completion method. However, with respect to its new assignment of 4 ITA No.1182/Mds/2012 ITA Nos.2352 to 2354/Mds/2016 supplying elevators, lifts for the Delhi Metro projects, the assessee recognized its income on project completion method in compliance with the Accounting Standard 7. The Ld.CIT in his order U/s.263 opined that assessee has been contradicting his stand before various forum and thus the method of recog