Section 43CB percentage completion method mandatory for real estate business; Confirms additions
Mumbai ITAT dismisses Assessee’s appeal observing that the CIT(A) rightly held that the provisions of Section 43CB is applicable to real estate business and further no new facts or circumstances have been placed on record to controvert the findings recorded by the CIT(A); ITAT outlines that the Assessee is a partnership firm engaged in the business of land development and construction of building; Further ITAT highlights that Assessee’s case was selected for scrutiny and the assessment was completed by making additions on account of estimated business income and deemed rental income; Tribunal states that the CIT(A) has considered all the contentions raised by the Assessee, including that the real estate business is not be covered under the provisions of Section 43B as it is different from construction contract; ITAT emphasizes on the CIT(A)’s views that by relying on coordinate bench decision in Hi-tec Estates and Promoters (P) Ltd. v. PCIT (2020) 117 taxman.com 965 (ITAT Cuttack), held that the percentage completion method as mandated in Section 43CB is applicable to real estate business, therefore rejected Assessee’s submissions and confirmed additions u/s 43CB; Tribunal states that no new facts or circumstances have been placed on record to controvert or rebut the findings recorded by CIT(A); ITAT therefore, refuses to interfere into or to deviate from the lawful findings of CIT(A). [In favour of revenue] (Related Assessment year : 2018-19) – [Faithfull Developers v. ACIT [TS-1683-ITAT-2025(Mum)] – Date of Judgement : 04.12.2025 (ITAT Mumbai)]

KEY CASE REFERENCES (FOR INTERNAL LINKING / AUTHORITY SIGNALS)

  • Income Tax Appellate Tribunal – Hi-tec Estates and Promoters (P) Ltd. v. PCIT (2020) 117 taxman.com 965