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In (2021] 433 ITR 48 (Mad) the assessee contractor followed the percentage of completion method of accounting for recognition of income and the company so mentioned this fact in their financial statements
/annual report year after year.
During the assessment, the assessee did not submit any document of certification of percentages of works completed under each of the contracts either by an in-house department of the assessee or by an independent chartered engineer.
This lead to case reopening action for failure to make full disclosure.
The Court affirming the AO action held that certain things such as the terms of the contract under which the revenue was generated or the bill raised on a client or a customer could not be certified in the audited profit and loss account and the balance-sheet which facts have to be supported with documents and certifications.
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