S. Muralidhar, J. - (1.) These are 11 appeals under Section 260-A of the Income Tax Act, 1961 ("Act") of which 1 is by the Assessee and 10 are by the Revenue. Apart from the facts being similar, the questions of law too are common to many of the appeals. They are accordingly disposed of by this common judgment. Background facts
(2.) The Assessee is engaged to the business of construction and sale of commercial space. The Assessee developed the 17 storied building known as Dr. Gopal Das Bhawan in Connaught Place in New Delhi. The Assessee follows the Completed Contract Method ("CCM") as compared to the Percentage Completion Method ("PCM"). The case of the Assessee is that since it follows the CCM, income is not recognised till the completion of the project. All receipts are treated as "advance" and all direct expenses are accounted for as "capital work and progress." A reference is made to the Accounting Standard ("AS") 7 issued by the Institute of Chartered Accountants of India ("ICAI") initially in 1983 which was revised first in 2002 and then in 2016. According to the Assessee, only on completion or substantial completion of the project, revenue is recognised. Payment of compensation to flat/space buyers
(3.) The Assessee states that the Gopal Das Bhawan Project was completed in the Financial Year ("FY") 1994-95 relevant to Assessment Year ("AY") 1995-96. Some of the allottees of the flats refused to take them for completion since the New Delhi Municipal Council ("NDMC") changed the usage of the Lower Ground Floor ("LGF"). The Assessee then started negotiating with the relevant flat buyers and persuaded them to surrender their ownership and allotment letters. The Assessee decided to repay the advance money received from these flat owners which worked out to Rs.32,08,271. The Assessee also decided to pay in addition compensation amounting to Rs.1,18,38,705 in lieu of surrender of their rights in the flat. This expenditure was claimed by the Assessee as "revenue in nature" and was charged to the Profit and Loss Account ("P&L Account"). Proceedings before the AO;