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during the life of the project would be calculated as under:

Under IND-AS (A) Budgeted Year-1 Year-2 Year-3 Year-4 Year-5 Cumulative Sales 91 91 91 91 90.5 Margin 21 21 21 21 20.5 (B) Actual Cumulative Sales 56 74 83 89 90.5 Cost % 50% 57.14% 64.29% 71.43% 100% Sale % 61.54% 81.32% 91.21% 97.8% 100% POCM Sale 28 42.29 53.36 63.57 90.5 POCM Margin 6.46 9.76 12.31 14.67 20.5 Under IND-AS (A) Budgeted Year-1 Year-2 Year-3 Year-4 Year-5 Year to year 6.46 3.30 2.55 2.36 5.83 margin Cumulative total margin during project life cycle 20.5 It was submitted that it was evident from the above example that the cumulative margin during the life of the project remains constant (i.e. Rs.20.5), both under IGAAP POCM as well as IND-AS POCM. Accordingly, there would be no loss to the Revenue on account of change in the method of accounting adopted by the Appellant. The appellant also filed table showing the amount offered to tax under IGAAP in earlier years being accounted for again the subsequent years under Ind-AS is as under:
54. The Learned CIT(A) considering the entire aspect of the matter, granted relief to the assessee with the following DLF Ltd.
Asst.Year :2017-18
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observation :
"10.5.2 It is noticed that the appellant company, being in the business of real estate development, was following the POCM as per IGAAP upto 31.03.2016 as per prescribed under the Companies Act. Vide notification dated 16.02.2015 in terms of section 133 of the Companies Act, 2013 issued by Ministry of Corporate Affairs, mandatory adoption of Ind-As was made applicable from financial year 2016-17. Accordingly, the financial statements for F.Y. 2016-17 were prepared as per new method. Under IGAAP, revenue from real estate projects started on or after 01.04.2012 was recognized in accordance with GN-IGAAP issued by ICAI. This POCM method was accepted by the AO in the past. The appellant has pointed out that it has been consistently following POCM for recognition of revenue under IGAAP and continues to follow the same under Ind-AS. The change is only with regard to methodology of POCM which has been redefined under Ind- AS. Therefore, it is seen that the appellant has been regularly following the regulations for recognising the revenue which is in conformity with the provisions of section 145 of the Act, as per which taxable income for the purpose of the Act is determined as per the method of accounting regularly followed by the assessee. The courts including the Hon'ble Supreme Court have consistently held that income from business or profession has to be computed as per the consistent and regularly followed method of accounting provided it is in accordance with the applicable accounting standards. The only exception is provided in sub-section (2) of section 145 under which Income Computational and Disclosure Standards (ICDS) have been prescribed. Although the Central Government has notified ICDS, the same do not provide method for computation of income in respect of real estate developers. The CBDT has also clarified in the FAQ issued on 23rd March, 2017 vide Circular No 10/2017 (Reply to Question No. 12) that ICDS III is not applicable to Real Estate Developers. In this regard, Question 12 of FAQs and its reply is reproduced hereunder:

10.5.7 I also find that the method of recognising revenue followed by the appellant is eventually revenue-neutral and represents true and fair view of the state of affairs and income of the appellant. int. The overall profit margin düring the life cycle of a project as per IGAAP POCM and as per IND-AS POCM remains the same and only the difference in sale consideration (on account of adoption of Ind-AS) has been spread over a number of years impacting the overall workings. The revised methodology under Ind-AS POCM as compared to IGAAP POCM and the revenue- neutral effect of adoption of Ind-AS POCM has been explained by way of an example. On perusal of the example of taking the total budgeted sale value of a project at Rs. 100, given by the appellant in para C (35) DLF Ltd.

Asst.Year :2017-18

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projects are ongoing and continuous and the appellant has already reported higher revenues in the subsequent years. It is seen that the one-time adjustment of Rs. 5,774.09 cr claimed by the appellant towards reversal of revenue of earlier years upto F.Y. 2015-16 impacts the revenue/margin recorded in the books of account for the subsequent years starting from 01.04.2016 because higher margins have been recorded in subsequent years by virtue of the changed method, i.e., Ind-AS POCM as basis of revenue recognition. Accordingly, one-time adjustment claimed by the appellant is off-sef in each subsequent year on account of unwinding of the revenue reversed earlier. From the perusal of the chart submitted by the appellant in para 2.9 and 2.13 of its submissions dated 20.11.2013 giving the cumulative impact of revenue of subsequent years recorded in the books of account as per Ind- AS vis-à- vis IGAAP POCM, it is seen that from assessment years 2017-18 to 2023-24, theexcess revenue booked on account of Ind-AS POCM is Rs. 4,441.61 cr. This is the difference between the margin for the entire period (A.Y. 2017-18 to 2023-24) if IGAAP POCM was continuously adopted (Rs. 1,848.80 cr) and margin for the same period as per Ind-AS POCM (Rs. 6,290.41 cr). Thus, out of one-time adjustment of Rs. 5,774.09 cr claimed by the appellant in A.Y. 2017-18 on account of reversal of revenue due to mandatory change in the method of revenue recognition, margin/ revenue to the extent of Rs. 4,441.61 cr has already been off-set on account of higher revenue/margins in respect of ongoing projects upto A.Y. 2023-24. Thus, only an amount of Rs.1,332.48 cr (Rs.5,774.09 cr -Rs.4.441.61 cr) remains to be recognized as revenue till assessment year 2023-24. Accordingly, the one-time adjustment of Rs. 5,774.09 cr on account of reversal of revenue will be off-set in subsequent years and hence the change in the method of accounting adopted by the appellant in the assessment year 2017-18 ultimately will not have any impact on revenue and, therefore, it is revenue-neutral. It is thus evident that the deduction/adjustment claimed by the appellant in A.Y. 2017-18 due to mandatory transition from IGAAP POCM to Ind-POCM shall be offset by higher reporting of revenue in subsequent years because, as already mentioned above, the total revenue under both IGAAP as well as Ind-AS remains the same. Thus, once it is found that the method followed by the appellant DLF Ltd.