SUNIL KUMAR YADAV, J.M. These appeals are directed by Revenue against respective orders of CIT(A). Since common issues are involved in these appeals, these were heard together and are being disposed of by single consolidated order for sake of convenience. 2. Facts in brief resulting into controversies in all these appeals are that assessee-company was carrying on business as developers and builders. It acquired plot Nos. 222 and 223 from Government of Maharastra in year 19 7 4 to develop and construct offices and sell same in ownership basis after reclaiming land from sea known as bank bay reclamation scheme. assessee reclaimed land from sea and accordingly constructed two buildings under name and style of Maker Chamber-III and Maker Chamber- I V on these two plots of land. For purpose of income-tax assessment, it opted to follow project-completion method of accounting on ground that project would take lot of time for completion and, therefore, it would not be possible to determine profit on yearly basis. There was no sales in initial period and work of reclaim was going on building were of 15 floors plus terrace each. As per details furnished, area constructed and sold upto end of accounting year relevant to assessment year under consideration are as under : Maker Maker Chamber-III Chamber-IV No. of floors to be 1. 15 15 constructed 2,02,090 2,16,6 2. Total Area sq.ft. 7 1 sq.ft. Total area sold 1,80,435 2,01,3 3. under agreement to sell sq.ft. 7 9 sq.ft. Area remaining 21,655 15,292 4. unsold sq.ft. sq.ft. 36,94 7 Total area unsold sq.ft. 3 . During asst. yr. 1988-89 issue was raised whether project was completed during this year or it was completed in asst. yr. 1993-94 in which entire profit was claimed as deduction under s. 33AC of IT Act. Before AO, during course of assessment proceedings for asst. yr. 1988-89 it was claimed by assessee that construction of project was in progress and had not been completed in all respects as on last date of accounting period, i.e., 31st Dec., 198 7 . In support of this plea, assessee has produced certificate from architect and has also pointed out that assessee has incurred substantial expenses on projects in succeeding year and this would go to show that project was not completed during year. This contention of assessee was rejected by AO at threshold and with regard to certificate of architect, it was observed by AO that it was too general and do not contain any date relating to work already done and work remaining to be done. As such, it cannot be relied on to decide issue of assessment year of completion of project. From details furnished by assessee, it was observed by AO that 93 per cent of premises in Maker Chamber 3 and 89.3 per cent in Maker Chamber No. 4 were already sold and occupied by purchasers by 31st Dec., 198 7 . AO further observed that if both projects are taken together, out of total area of 4,18, 7 61 sq. ft. total area already sold and handed over is 3,81,814 sq. ft. which is around 91.1 7 per cent. total area remained to be constructed in both buildings is only 34,808 sq. ft. which shows that 91. 7 per cent is completed in respect of total projects. Following ratio laid down by Tribunal in case ofChampion Construction Co. vs. ITO (1983) 5 ITD 495 (Bom)and judgment of Patna High Court inSri Sukhdeodas Jalan vs. CIT (1954) 26 ITR 61 7 (Pat), AO held that project is treated effectively ended during accounting period and income has to be computed accordingly. 4. With regard to contention of assessee raised before CIT(A) in first round that project was terminated in asst. yr. 1991-92 and paid advance tax on estimated income of Rs. 400 lakhs AO observed that record shows that assessee has not terminated project during asst. yr. 1991-92 and has paid advance tax at Rs. 2 lakhs only and that to in one instalment on 31st March, 1991. AO has also discussed two certificates given by architect one dt. 13th Feb., 1991 and other dt. 11th March, 1991 in which two contradictory statements were made. In earlier letter dt. 13th Feb., 1991, it was certified by architect that project was not completed and is under construction but in another certificate dt. 11th March, 1991 same architect has claimed that work has been completed in all respects. AO further observed that expenses on material purchased and labour charges if any incurred in asst. yr. 1991-92, it related to structural adjustment that was to be made to construct additional area which is not part of original project. This is subsequent development which was not present at end of relevant previous year, i.e., 1988-89. AO accordingly, conclusively held that both projects were completed before end of previous year relevant to asst. yr. 1988-89, but, for reasons best known to it assessee has been doing its best to see that projects never come to end by claiming that something or other always remains to be done, which if allowed, would amount to giving assessee licence to put off its tax liability for unlimited period. This is squarely not intention of statute. 5. It was also pleaded before AO that if percentage sales of flat is taken as guiding factor to determine completion of project, project can be said to have been completed during earlier years and not in asst. yr. 1988-89 as facts for asst. yr. 1986-8 7 to asst. yr. 1988-89 are same. In support of his plea that project cannot be called to have been completed on basis of percentage of sales of flat he relied upon order of CIT, dt. 7 th March, 1991 whereby he dropped proceedings initiated under s. 263 for asst. yr. 1986-8 7 . AO was also commented on these contentions and observed that this issue was never examined in asst. yr. 1986-8 7 by AO and if proceedings were initiated under s. 263 by CIT and was finally dropped, it might have been done for some other reasons and not on issue of completion of project. AO accordingly held that project was completed in asst. yr. 1988-89 and he computed profits on project. With regard to contingent outstanding liability of 13.51 crores, it was observed by AO that since it is contingent liability and has been disputed by assessee, it cannot be called to have become due in impugned assessment year. It can only become due when writ petition of assessee is decided by High Court and liability is ascertained. He disallowed claim of assessee accordingly. In other assessment years, i.e., 1989-90, 1990-91 and 1991-92 AO did not allow carry forward of work-in-progress. 6. Aggrieved, assessee has preferred appeal before CIT(A) with. plea that project was not completed during asst. yr. 1988-89. It was rather completed during asst. yr. 1993-94. It was also contended before CIT(A) that AO himself has given specific finding that there were no sale whatsoever of premises during previous year ending on 31st Dec., 198 7 meaning thereby whatever sales of constructed area were done it took place in earlier years. If percentage of sale of constructed area is criteria for determining year of completion of project, project had been completed in earlier years to assessment year, i.e., 1988-89, as no activities took place in this assessment year. 7 . learned counsel for assessee further contended that in asst. yr. 198 7 -88, AO has accepted position that project was not completed and in asst. yr. 1986-8 7 proceedings under s. 263 were initiated, were later on dropped by CIT. As such, there is no evidence on basis of which it can be inferred that project was completed during asst. yr. 1988-89 or prior to it. 8. CIT(A) re-examined issue in light of material available on record and held that project was not completed in asst. yr. 1988-89. relevant observations of CIT(A) made in asst. yr. 1988-89 are extracted hereunder : "A careful consideration of relevant facts would show that stand of AO in asst. yrs. 198 7 -88 and 1986-8 7 was also correct. present year ended on 31st Dec., 198 7 . learned officer was held that there was no worthwhile activity during this year for one reason or other and that is why, not much direct expenditure on project took place. On 2 7 th Oct., 1991, appellant company got amalgamated with M/s Pranik Shipping&Services Ltd. (FSSL) after due approval of company Court. project was ultimately completed in March, 1993 and successor who completed project returned income from this project,inter aliashowing total sales of Rs. 22.24 crores and project cost of Rs. 6.6 crores. net profit was returned at Rs. 13.61 crores. As on 31st March, 1993, stock-in-hand remained only Rs. 3,53 lakhs. I have also looked into year-wise sales and it is found that sales upto 31st March, 1989, i.e., much later than end of relevant previous year stood at Rs. 10.96 crores. total cost came to Rs. 6.6 crores. However, cost met during year was only Rs. 14.31 lakhs including direct and indirect expenses and total cost incurred upto 31st Dec., 198 7 was Rs. 2.89 crores which is much than 50 per cent of total cost of Rs. 6.6 crores. total sales on completion of project came to Rs. 22.25 crores approximately. sales affected upto 31st Dec., 198 7 came to Rs. 10.96 crores which again is little less than 50 per cent of total sales of project. It is not understood as to how learned officer came to conclusion that over 90 per cent of area has been sold and sale proceeds have been received upto 31st Dec., 198 7 . Therefore, by applying ratio ofChampion Construction Company vs. ITO (1983) 5 ITD 495 (Bom), it can be said that upto 31st Dec., 198 7 , project could not be said to be completed and profits could not be assessed as if project was complete in asst. yr. 1988-89." 9 . Following this order of CIT(A), CIT(A) in another assessment years has directed AO to allow carry forward of work-in-progress. He accordingly deleted additions, which were made on presumption that project was completed in asst. yr. 1988-89. 10. Now Revenue has preferred appeal before Tribunal against order of CIT(A). During course of hearing, learned CIT- Departmental Representative Ms. Asha Aggarwal has invited our attention to fact that assessee s project for constructing Maker Chambers 3 and 4 were completed during asst. yr. 1988-89 as more than 90 per cent of constructed area were sold by assessee. She invited our attention to data in this regard, pointed out by AO in his order. She further pointed out discrepancies in certificate and as per these data, 93 per cent of premises in Maker Chamber 3 and 89 per cent in Maker Chamber No. 4 were premises in Maker Chamber 3 and 89 per cent in Maker Chamber No. 4 were already sold and occupied by purchaser by 3rd Dec., 198 7 . Thus, if both purchases are taken together, out of total constructed area of 4,18, 7 61 sq. ft., total area already sold and handed over is 3,81,814 sq. ft., which is 91.1 7 per cent. With regard to expenditures incurred in subsequent years, it was contended that these expenses are in respect of painting, labour charges, plumbing, sanitation and telephone installations. These are expenses in nature of giving final finishing touches to project. Mrs. Asha Agarwal further invited our attention to fact that during year assessee has sold part of construction machinery, which indicated that project work was completed during accounting period. 11. learned Departmental Representative, Mrs. Agarwal further invited our attention to discrepancies in certificates issued by architect. certificate dt. 1 7 th Aug., 1988 is of general in nature in which it has only been certified that construction work of buildings known as Maker Chambers 3 and 4 was not completed as on 31st Dec., 198 7 . Nothing has been stated in certificate as to how much work was done and how much work remained to be done. She further pointed out from statement of account of M/s Pranic Shipping and Services Ltd. for asst. yr. 1993-94, in which assessee- company has amalgamated, that entire profit earned on this project was claimed as deduction under s. 33AC on ground having stated through note that main object of assessee was operation of ships whereas assessee was not engaged in any shipping business during year. Till assessee-company amalgamated with M/s Pranic Shipping & Services Ltd., assessee made all efforts not to complete project and to carry forward its work-in-progress so that no tax liabilities would accrue against assessee. In support of this plea, she has invited our attention to P&L a/c of Pranic Shipping & Services Ltd. with submission that whatever profit was earned; it was earned on account of said project. She further invited our attention to P&L a/c of assessee ending on 31st Dec., 198 7 with submission that assessee itself has shown work-in-progress as Rs. 540.26 lakhs against opening work-in-progress in asst. yr. 1993-94 at Rs. 581.16 meaning thereby 90 per cent project was completed and sold to buyer end of 31st December, 198 7 . Mrs. Asha Agarwal further contended that major expenses were incurred in this project after asst. yr. 1988-89 was only in asst. yr. 1991-92 on construction of additional FSI. learned Departmental Representative further invited our attention to original project which was upto 15th floor of building and it was accordingly sanctioned by appropriate authority and when this project is completed, assessee got further sanction of additional FSI on which it made further investment on its construction. additional sanctions of FSI cannot be part of original project inasmuch as it was not taken into account by assessee while forming original project. Since assessee has been following project-completion method assessee is required to compute its profit as and when original project is completed and its completion cannot be extended at whims of assessee. 12. learned counsel for assessee Mr. J.D. Mistry, besides rebutting contentions of learned Departmental Representative, has invited our attention to fact that undisputedly assessee have been following project-completion method and it was accepted continuously by Revenue. He further invited our attention to statement of net work-in-progress in which details of expenditures incurred during different assessment years were given with submissions that in asst. yr. 1991-92, substantial expenditure were incurred in construction of project. He further invited our attention that during asst. yr. 1986-8 7 Revenue accepted stand of assessee that it has been following project-completion method. Later on, CIT issued notice under s. 263 which was duly replied by assessee and having satisfied with explanation of assessee, proceedings were dropped. In asst. yr. 198 7 -88 expenditure incurred on project was shown as work-in-progress and same was accepted by Revenue. In asst. yr. 1988-89 expenditure as well as receipts on sale of constructed portion were almost same, meaning thereby that there was neither any construction activity nor any sale of constructed portion was effected during asst. yr. 1988-89. Before project is completed, assessee has got sanction on additional FSI and thereafter construction was started and project was finally completed during asst. yr. 1993-94. If contention of Revenue that project is completed on basis of 80 per cent of constructed area sold is accepted then project might have been completed even prior to asst. yr. 1988-89 because in asst. yr. 1988-89 no major construction activity was done nor was any constructed area sold. In any case project was not completed during asst. yr. 1988-89. In support of this plea, learned counsel for assessee has invited our attention to P&L a/c ending 31st March, 1993 and statement of net work-in-progress. learned counsel for assessee further urged that entire project was either completed during asst. yr. 1993-94 as claimed by assessee or prior to asst. yr. 1988-89 if stand of Revenue is accepted but in any case it was not completed during asst. yr. 1988-89. As such orders of CIT(A) in all these years deserves to be confirmed. 13. Having carefully examined orders of lower authorities and documents placed on record, we find that undisputedly assessee have been following project-completion method and Revenue has accepted same in these years. main controversy before us is only with regard to time when project is completed. In order to resolve this controversy, we are of view that certain following questions are to be addressed first : (1) Whether project is completed on date when entire project is constructed and assessee obtains completion or occupancy certificate from concerned authorities irrespective of fact entire project is sold or not ? OR (2) Whether project is deemed to have been completed as and when its more then 80 per cent constructed portion, have been sold and occupied by purchaser, irrespective of fact that construction activities are going on in that assessment year ? (3) Whether project is deemed to have been completed when original project is completed or its 80 per cent of constructed area is sold and occupied by purchaser irrespective of fact that construction of additional FSI is not completed ? (4) Whether constructions with regard to additional FSI is itself independent project or it is continuation of old project ? 14. Before dwelling upon these questions/issues we would like to narrate activities of builders and developers in this field. Like instant case, builder forms project of constructing building and to sale it out in open market and to earn profit. It is composite profit of construction of building and its sale in market. In order to achieve this target, builder purchases plot and gets plan sanctioned from appropriate authority and start construction thereon. In this line of business two methods of accounting are followed (1) Project-completion method, (2) Percentage completion method. In percentage completion method, builder is required to estimate profit in each assessment year and offer it to tax. But in case of project-completion method builder/assessee shows investment in building as work-in- progress and carries it over to next succeeding assessment year. He finally works out profit of entire project on its completion. It is also observed in this type of case that when original project is about to complete or completed, assessee gets sanction of additional FSI on which further construction is raised. 15. During course of hearing, our attention was invited to judgment of Tribunal in case ofChampion Construction Co.(supra) in which Tribunal has dealt upon issue as to when project is deemed to have been completed in light of various judicial pronouncements which are as under : 1.K.H. Mody, In re (1940) 8 ITR 1 7 9 (Bom) 2.CIT vs. A.K.A.R. Family (1941) 9 ITR 34 7 (Rangoon) 3.Addl. CIT vs. Madan Lal Ahuja (1982) 29 CTR (All) 104 : (1982) 136 ITR 640 (All) 4.Neelkamal Construction Co. vs. ITO (sic) 5.Sri Sukhdeodas Jalan vs. CIT(1954) 26 ITR 61 7 (Pat) 6.P.M. Mohammed Meerakhan vs. CIT (1969) 7 3 ITR 7 35 (SC) 7 .Tirath Ram Ahuja (P) Ltd. vs. CIT(19 7 6) 103 ITR 15 (Del). 16. Having gone through issue in dispute, Tribunal has held that it is not correct proposition to say that profits of assessee from single venture/project in nature of trade cannot be ascertained until venture/project has come to end. Under Act each year is self-contained unit and unless it is impossible to compute profits or losses of each year reasonably if necessary by estimating value of liabilities to be incurred, valuing work-in-progress, stock-in-trade etc., profits should be computed year-wise and taxed. Tribunal has further observed that acceptance of bald proposition of assessee that profits should be computed at final completion of projects, amount to giving assessee licence to put off his tax liabilities for unlimited period by seeing to it that venture/project never comes to end in sense something or other always remains to be done. That will be very unsatisfactory state of affairs. Tribunal has further observed that when entire cost/expenditure to assessee is recouped and/or major portion of venture/project is complete, there is really no justification in not taxing income from project which quite often may represent excess of receipt over expenditure unless there is risk/chances of assessee s suffering heavy liabilities, subsequently, for some reasons or other. Tribunal finally concluded that project is deemed to have been completed when its 80 per cent of constructed area is sold. unsold portion of constructed area would take care of any contingencies, which may arise in future. For sake of reference, we extract relevant portion of order of Tribunal in case ofChampion Construction Co.(supra)as under : "We now come to merits of assessee s contention, viz., whether income in this case is assessable only when project is complete, i.e., when entire portion of multi-storeyed building meant for sale is sold, co- operative society of buyers is formed and assessee has transferred all its rights, title and interest in project to society. It may be that from commercial point of view in case of single project/ venture of type in case before us profits can be reasonably computed only when venture comes to end in manner suggested by assessee s counsel. In fact looked at superficially, Bombay High Court s decision in case ofK.H. fact looked at superficially, Bombay High Court s decision in case ofK.H. Mody(supra), Rangoon High Court s decision in case ofA.K.A.R. Family(supra)and Allahabad High Court s decision in case ofMadan Lal Ahuja(supra)support assessee s contention, viz., when there is single venture in nature of trade, question of assessing profits arises or should arise only when venture comes to end. This is also impression one gets from order of Tribunal dt. 4th Oct., 19 7 1 in case ofNeelkamal Construction Co. vs. ITO(copy of order placed on record at pp. 168 to 1 7 5 of assessee s paper book). However, when all these decisions are read carefully in light of Patna High Court decision in case ofSri Sukhdeodas Jalan(supra) and Supreme Court s decision in case ofP.M. Mohammed Meerakhan vs. CIT (1969) 7 3 ITR 7 35 (SC)and that of Delhi High Court in case ofTirath Ram Ahuja (P) Ltd. vs. CIT(19 7 6) 103 ITR 15 (Del)we find that proposition that profit from single venture cannot be ascertained for tax purposes until venture has come to end is not absolute. There may be cases where such proposition should hold good while there would be other cases where profit from single venture can be computed year-wise. In any event, there will be no justification for treating surplus of receipt after entire cost/expenditure to assessee is recouped as income of assessee unless assessee shows that it is under obligation to meet heavy liability which might altogether change complexion of resultant profit or loss from venture. In this context it has to be borne in mind that if proposition as stated by Shri Harish is accepted, it would be very easy for any assessee to evade payment of tax. All that he will need to do is to retain small portion of accommodation constructed by him unsold, which will always be possible. 15. It is, thus, desirable to briefly refer to facts of each case to show why we have come to aforesaid condition. facts in Bombay High Court case were that assessee had purchased about 1,330 acres of land for Rs. 60,000 in year 1930. Out of this area he earmarked for development and sale as building sites area of about 266 acres divided into 1000 plots. He spent about Rs. 20,000 in development of area. During financial year 1936-3 7 assessee sold 208 plots to various persons for sum of Rs. 65,810. By taking into account original cost price of land and proportionate development expenses, ITO computed profits at Rs. 56,980 which were reduced to Rs. 4 7 ,533 by AAC. In Rangoon High Court case, assessee was money-lender. In course of its money-lending business it took over certain acres of land and house in settlement of debt of Rs. 9,000 due to it. lands were sold at different times at best prices available at their respective sales. assessee was crediting debtor s account by crediting sale proceeds as and when materialised. After last sale took place, it claimed net debit balance of Rs. 5,13 7 in that account as loss. In Allahabad High Court case assessee had purchased 28,2 7 8 sq. y d s . of land between 1942 to 194 7 and spent about Rs. 81,000 in development of area. During asst. yr. 1969- 7the assessee sold for first time 5,6 7 3 sq. yds. out of it for sum of Rs. 1,05, 7 0. Again by taking proportionate cost of land and development expenses, Department wanted to tax assessee on capital gain of Rs. 55,6 7 . It is, thus, evident that both in Rangoon and Allahabad High Court cases assessee was not having any adventure in nature of trade as such in real estate. Besides sales were of small portion as compared to total area purchased or exploited, both in Bombay and Allahabad High Court cases. Therefore, all above three cases are distinguishable on facts. Tribunal s order dt. 4th Oct., 19 7 1, relied upon by assessee s counsel, is also distinguishable. In that case assessee-firm had purchased one plot of land for which agreement of sale was entered into on 29th June, 1962. However, deed of conveyance was not executed. It was for that reason that Tribunal held that until registration took place there was no transfer and, consequently, no sale. 16. On other hand, nine-tenth work of project had been completed during previous year in Patna High Court case and assessee had received sum of about Rs. 3,00,000 on account of execution of contract. These facts are very close to facts in assessee s case. Duly recognising commercial principles involved in such matters Patna High Court has observed as under : In case of contracts, if accounts are maintained and completed on contract basis profits or gains of previous year cannot properly be extracted from accounts, for contract may take several years for being completed and payments in regard to it may also be received by assessee in several years. It may be convenient from point of view of assessee that profit should be ascertained on completion of contract and assessment of profit should take place after completion of contract. But s. 3 imposes charge of income-tax upon profits and gains of assessee for accounting year and it is duty of IT authorities to ascertain profits and gains accruing to assessee in respect of payment received during accounting year. It cannot be said that merely because contract was completed after accounting year, no profits arose or accrued to assessee in accounting year. In case of incomplete contract there is well established method of calculating profits accruing in accounting year which is set out at p. 9 7 1 ofBatliboi s Advanced Accounting. Mathematical certainty is not demanded in matter of description. More or less same view has been taken by Hon ble Supreme Court in case ofP.M. Mohammed Meerakhan(supra). facts in that case are also quite close to facts in assessee s case. land in this case was divided into 23 plots out of which 22 plots had been sold. Supreme Court observed as under : ... In our opinion, there is no justification for this argument. It is not correct proposition to say that profits of assessee cannot be ascertained even on assumption that transaction of adventure of trade was not completed. Under IT Act for purpose of assessment each year is self- contained unit and in case of trading adventure profits have to be computed in manner provided by statute. It is true that IT Act makes no express provision with regard to value of stock. It charges for payment of tax income, profits and gains which have to be computed in manner provided by IT Act. In case of trading adventure profits have to be calculated and adjusted in light of provisions of IT Act permitting allowances prescribed thereby. For that purpose it was duty of ITO to find out what profit business has made according to accountancy practice. As normal rule, profit should be ascertained by valuing stock-in-trade at beginning and at end of accounting year.... Though finding of Tribunal that neither profit nor loss for construction contract for year should be taken was not interfered with by Delhi High Court in case ofTirath Ram Ahuja (P) Ltd.(supra), Their Lordships have following Patna High Court s decision inSri Sukhdeodas Jalan scase (supra)clearly observed : ................ in case of contracts, one need not wait till contract was completed in order to ascertain income and that it was open to Revenue to estimate profit on basis of receipts in each year of construction although contract was not complete.... counsel for assessee, it may not be out of place to mention, had referred to orders of assessments in three cases (copies of assessment orders filed at pp. 1 7 5, 1 7 6 and 1 7 9 of paper book). However, facts in those cases are not clearly stated. In any event, in view of Supreme Court and High Court decisions referred to by us above, assessment orders will hardly provide any guidance in matter. 1 7 . Having regard to case law discussed by us hereinabove, we hold that it is not correct proposition to say that profits of assessee from single venture/project in nature of trade cannot be ascertained until venture/project has come to end. Under Act each year is self-contained unit and unless it is impossible to compute profits or losses of each year reasonably if necessary by estimating value of liabilities to be incurred, valuing work-in-progress, stock-in-trade, etc., profits should be computed yearwise and taxed. acceptance of bald proposition put forward by Shri Harish would amount to giving assessee licence to put off his tax liabilities for unlimited period by seeing to it that venture/project never comes to end in sense something or other always remains to be done. That will be very unsatisfactory state of affairs. Moreover, when entire cost/expenditure to assessee is recouped and/or major portion of venture/project is complete, there is really no justification in not taxing income from project which quite often may represent excess of receipts over expenditure. Unless there is risk/chances of assessee s suffering heavy liabilities, subsequently, for some reasons or other. 18. We have examined facts of case from this point of view. We f i n d that out of total accommodation of 58,9 7sq. ft. constructed, assessee was able to sell only 25,530 sq. ft. during previous year relevant for asst. yr. 19 77 - 7 8. Neither construction of multi-storeyed building was complete nor even half portion of building sold. net sale proceeds received were much less than total expenditure/cost incurred by assessee up-to-date. In circumstances, so far as asst. yr. 19 77 - 7 8 is concerned, we accept assessee s submission that it would be in order if no profits or losses are estimated from venture for asst. yr. 19 77 - 7 8. assessment for this year is, therefore, cancelled even on this score. 19. However, position as regards asst. yr. 19 7 8- 7 9 is materially different. construction of building is completed in that year. Total area earmarked for sale is 61,396 sq. ft. out of which upto end of that year assessee had sold 49,965 sq. ft., i.e., about 80 per cent of area. net receipts have far exceeded total cost or expenditure to assessee. Assuming there is any possibility of assessee s incurring some liability in future in connection with completion of project or otherwise, unsold portion comprising of 12,331 sq. ft. and difference between net receipts and total expenditure and amount actually treated as assessee s income are more than sufficient to take care of any such contingency." 1 7 . This order of Tribunal has not been reversed so far nor any contrary order of Tribunal was brought to our notice during course of hearing of appeal. We, therefore, following same, hold that project deemed to have been completed in that assessment year in which 80 per cent of constructed area is sold. other questions posed before us were not dealt upon by Tribunal in its aforesaid order, i.e.,Champion Construction Co.(supra), but keeping in view ratio laid down by different High Courts in aforementioned cases, which were considered by Tribunal in case ofChampion Construction Co.(supra), we are also of view that time for completion of project cannot be extended at whims of assessee. If assessee is allowed to do so it would declare completion of project in those years in which it suffered loss from other activities to evade tax. It is also observed that most of time when project of assessee is about to complete, he obtained sanction of additional FSI and starts construction thereon and that construction would be lingered on to extent till assessee is able to set off profit against loss of other activities. 18. Turning to case in hand, we find that assessee took project of construction of Maker Chamber No. 3 and Maker Chamber No. 4 at different plots and original project was almost completed upto asst. yr. 1988-89 or even prior to it, if assessee s contention is accepted and 80 per cent of constructed area was sold and occupied by buyer, but assessee did not compute profit on basis of project-completion method and offered it to tax. It got sanction of additional FSI in which major investments were made during asst. yrs. 1991-92 and 1992-93 and have shown completion of project during asst. yr. 1993-94 and in that assessment year, assessee got itself amalgamated with other company, i.e., M/s Pranic Shipping & Services Ltd. and claimed deduction of entire profit on project under s. 33AC of IT Act though he was not involved in any shipping activities during that assessment year. When original project was completed or about to complete why assessee did not start its construction of additional FSI immediately after completion of original project and why did he wait upto asst. yrs. 1991-92 and 1992-93. These queries remained unanswered. We are, therefore, of view that there should be some guidelines in this regard, which may govern assessee as and when profits in project-completion method are to be declared. period of completion of project cannot be stretched at whims of assessee to defraud Revenue. We are also conscious of fact that assessee s object is not only to construct building but also to sell constructed portion and earn profit. But time of completion of project cannot be stretched to that extent till assessee finally construct building and acquire completion or occupancy certificate. As and when entire building is completed/ constructed and 80 per cent of its constructed portion is sold and occupied by purchaser, project is deemed to have been completed irrespective of fact that minor construction work in building is going on. It makes no difference whether builder has obtained occupancy certificate or not. Once more than 80 per cent of constructed area is sold/occupied by builder, project is deemed to have been completed. remaining constructed portion would take care of contingent liabilities, which may occur in future. 19. No doubt, construction of additional FSI cannot be called to have any independent existence. It is merely continuation or extension of original project, but under garb of sanction of additional FSI builder or assessee cannot stretch period of completion of project to its own convenience. In this regard, there may be three situations under which construction or additional FSI is raised by builders. These situations are as under : 1. Where, builder/assessee gets sanction of additional FSI and he starts its construction thereon before completion of project in terms defined as above, 2. Where, builder/assessee get sanction of additional FSI before completion of project, but, he starts its construction thereon after completion of project, 3. Where assessee gets sanction of additional FSI after completion of project. To deal with this different types of situation certain guidelines are required to be laid down in light of fact that additional FSI does not have any independent existence. Sometimes, it is continuation or extension of original project, but it cannot be uniformly laid down that it is only extension of original project. When construction of additional FSI starts after completion of original project, it is certainly independent project. Having pondered upon all these situations, we lay down certain guidelines to resolve all possible controversies with regard to year of completion of project in case where additional FSI is sanctioned and same are as under : 1. As held in case ofChampion Construction Co.(supra), project is deemed to have been completed in that assessment year in which 80 per cent of constructed area is sold and occupied by purchaser, irrespective of fact that minor construction work is going on, on project. 2. In case when additional FSI is sanctioned and builder/assessee starts construction thereon before project is deemed to have been completed in terms defined as above, construction of additional FSI is extension of original project and is deemed to have been completed in that assessment in which 80 per cent of total constructed area of entire project (original project + construction of additional FSI) is sold and occupied by buyer. 3. In case, where original project is deemed to have been completed as per cl. (1) and thereafter additional FSI is sanctioned on which construction is required to be raised. construction of additional FSI will be independent project and it will not extend period of completion of original project. It would be independent project and it would be deemed to have been completed in same manner, as original project is deemed to have been completed, i.e., on sale of 80 per cent of constructed area. 4. In case where assessee/builder gets sanction of additional FSI before project is deemed to have been completed as defined above in cl. (1), but construction has been started after completion of project. If gap between completion of original project and start of construction of additional FSI is reasonable, that is less than six months, it amounts to extension of original project and entire project is deemed to have been completed in terms indicated above. But, if gap between completion of project and start of construction is unreasonable, i.e., about more than six months, construction of additional FSI is entirely independent project and it would not extend period of completion of original project. It would be treated as independent project. year of completion would be worked out independently in manner as defined in cl. (1). Since all these aspects were not examined by lower authorities and Revenue has taken contrary stand in different assessment years as at one place they held that project was completed in asst. yr. 1988-89 and on other hand they accept return of assessee in 1993-94 in which entire profit was claimed as deduction under s. 33AC of IT Act. In these circumstances, we are of view that entire issue of completion of project should be examined afresh in light of aforesaid guidelines after making necessary investigations/inquiries by AO in this regard. We therefore, set aside order, of CIT(A) in all these assessment years and restore matter to file of AO with directions to adjudicate issue afresh in terms indicated above and to determine assessment year of completion of project and tax profit accordingly after affording opportunity of being heard to assessee. 20. Ground No. 2 in Appeal No. 6015 relates to claim of outstanding contingent liability of Rs. 13.51 crores with regard to increased lease rent by Maharashtra Government as statutory liability. 21. facts borne out from record are that during course of assessment proceedings, learned counsel for assessee has raised alternative plea that in case AO want to assess profits on premises project has been completed in this very year then outstanding liability of over Rs. 13 crores with regard to increased lease rent should be allowed. AO disallowed claim of assessee on ground that it was disputed liability. relevant demand has been raised by collector of Revenue and this demand was stayed by Hon ble High Court of Bombay in writ petition filed by assessee. Unless and until liability is quantified or determined, it cannot be allowed. AO further observed that unsold portion of property would take care this liability. Assessee went in appeal before CIT(A) and CIT(A) allowed claim of assessee after treating it to be statutory liability and directed AO to consider and allow statutory liability existed as on 31st Dec., 198 7 if income in hands of assessee is assessed on presumption that project has been completed. Now Revenue is in appeal before us and placed heavy reliance upon AO s order. 22. Having given thoughtful consideration to rival submissions as well as factual aspects, we are of view that since we have set aside orders of CIT(A) and restore matter to file of AO to determine year of completion of project and to compute profit, liabilities which might have been settled by now be also taken into account while computing profits. If dispute is not settled provision should be made to meet liability if unsold portion of this constructed area is failed to take care of this liability. Accordingly, issue is also restored to file of AO to determine nature of liabilities whether it is accrued against original project or additional project and if it is found to be accrued to on account of original project, it should be adjusted against profit of original project, otherwise, it would be adjusted against profit of additional project. We, therefore, order accordingly. 23. In result, appeals of Revenue are allowed for statistical purposes. *** ASSISTANT COMMISSIONER OF INCOME TAX v. PRERNA PREMISES (P) LTD.