The income arising to the assessee during a particular period has to be brought to tax for that period, and that period alone; each year being an independent unit of assessment. It is trite law that profit is to be understood in the commercial sense and, subject to the provisions of the Act, computed accordingly. The issue is not as to which of the two methods, i.e., the percentage completion or the project completion, is the correct method in-asmuch as each could be valid in a particular set of facts. What is relevant is which of the two methods results in the correct reporting of the operating profit and the state of affairs of a business entity in the facts and circumst AS-7 the case.


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