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been following the project completion method. However after consulting with his taxation experts, he agreed for recognising revenue by following the percentage completion method. Thereafter the assessee filed the revised return on 17/10/2016 and the assessment u/s 143(3) r.w.s. 153A was completed at such revised return income

9. One of the arguments of the appellant is that it was following an acceptable method of accounting and the income was declared only due to the change in the method of accounting. The appellant has further argued that that percentage completion method is not mandatory and project completion is also an acceptable method of revenue recognition, but in order to buy peace of mind and to avoid litigation, it agreed to recongize the revenue under percentage of completion method. In such situation no penalty should be levied on the income disclosed in the revised-return filed by it. The issue as to whether the 'percentage completion method' is mandatory or not for the assessment years prior to insertion of section 43CB of the Act w.r.e. f 1.4.2017 i.e. AY 2017-18, has been discussed by various tribunals wherein it has been held that the percentage completion method has been made compulsory by insertion of section 43CB of the Act and is mandatory only for assessment years 2017-18 and onwards. Some of these decisions are as under -

25. Thus, we note that completed contract method and percentage complete method both were recognized method of accounting for computation of gains from construction contract Section 43CB was instituted by the Finance Act 2018 w.e.f. 1-4-2017 which provides that profits and gains arising from Construction contract or a contract for providing services shall be determined on the basis of percentage of completion method in accordance with the income computation and disclosure standards. However, this section was not in existence and applicable in the assessment year 2014-15 which we are concerned with.
"42. Before parting of with adjudication of this issue it would be relevant to take note of the amendment brought in statute with retrospective effect w.e.f. 1.4.2017 by way of insertion of Section 43CB for the purpose of computation of income from construction and service contract. The relevant provision of Section 43CB of the Act reads as follows;
"43CB. Computation of income from construction and service contracts --

percentage completion method in accordance with the provisions of section 145 of Act. 9.3. Similar view have been expressed by Hon'ble ITAT Cuttack Bench in the case of Hi-tech Estates & Promoters Pvt Ltd vs PCIT ITA No.391/CTK/2018 (Cuttack Tribunal) wherein the hon'ble bench has observed as under :

29. At the same time we cannot ignore that the legislature, by Finance Act, 2018 has inserted Section 43CB to the Act w.e.f. 1.4.2017, which provides the profits and gains arising from a construction contract or a contract for providing services shall be determined on the basis of percentage completion method (PCM) in accordance with the income computation and disclosure standards notified under sub-section (2) of Section 145 of the Act. Thus, this provision is applicable from assessment year 2017-18 onwards and the ld. CIT DR, in all fairness, agreed that the provisions of section 43CB is applicable from assessment year 2017-18. On being asked by the Bench, the ld CIT DR could not controvert the fact that same is not mandatorily applicable to assessment year 2013-14, which is under consideration.