The Income Tax Appellate Tribunal (ITAT), Delhi Bench, dismissed the Revenue’s appeal and upheld deletion of the addition made on account of the difference between turnover reported in the Service TaxReturn and the turnover declared in the Income-tax Return, noting that the difference arose from the basis of revenue recognition followed under the respective statutes.
The assessee, Rudra Buildwell Homes Pvt. Ltd., is engaged in the business of real estate development and was executing a single project, “Rudra Aqua Casa” at Greater Noida (West). For AY 2018-19, the Assessing Officer treated the difference between turnover reported in the Service Tax Return and the Income-tax Return and Form 3CD as unaccounted turnover and undisclosed income and made an addition on that basis.
The CIT(A), however, deleted the addition, observing that the difference arose from the different bases of recognition of income under the two statutes.
The assessee submitted that it followed the Percentage of Completion Method (POCM) for recognising revenue. It contended that the Service Tax Return turnover included amounts received and demands raised, which did not constitute income until the relevant stage of construction or sale was achieved. The assessee further submitted that the entire difference was attributable to timing differences and the accounting basis
The Revenue challenged the CIT(A)’s order, contending that the CIT(A) had accepted the assessee’s adoption of POCM without verifying the substantial variation between GST turnover and income offered to tax and without insisting upon cogent documentary evidence
The Tribunal comprising Anubhav Sharma (Judicial Member) and Sanjay Awasthi (Accountant Member) found no reason to interfere with the findings of the CIT(A). The Bench noted that the assessee had furnished complete project-wise working forming part of the audited financial statements and audit report.
The Tribunal accordingly dismissed the Revenue’s appeals, sustaining the deletion of the turnover addition.
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JOINT COMMISSIONER OF INCOME TAX (OSD) CENTRAL CIRCLE-I, NOIDA vs M/S RUDRA BUILDWELL HOMES PVT. LTD.
CITATION : 2026 TAXSCAN (ITAT) 1330Case Number : ITA 1847/DEL/2026Date of Judgement : 31 August 2026Coram : ANUBHAV SHARMA and SANJAY AWASTHICounsel of Appellant : Jitender SinghCounsel Of Respondent : Rohit Kapoor
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