Revenure recognisation under % base , real estate

hetalsangoi (Querist) 07 September 2017 This query is : Open
in the f.y.2016-2017 project is completed . % method is followed in Books of accounts. A Buyer has given the full consideration in F.Y.16-17 Rs 30lakhs on the base of the letter of the allotment (Letter is issued in F.Y.16-17) Where there is the clause was that letter of allotment is subject to The Promoter has agreed to allot the said Premises admeasuring [●] square feet carpet area to the Allottee, at or for the price of ` [●]/- (Rupees [●] Only) (“Sale Consideration”), and subject to the terms, conditions and covenants contained in the proforma of the Agreement for Sale submitted to the Authority . Possession has not taken till Mar 2017.

There is no execution of agreement of sale and sale deed between builder and buyer. There may be a laps from the both the sides. all the service tax and vat is paid during the F.Y.2016-2017 on this deal. Project is completed in F.Y 16-17 And in the F.Y.17-18 , deal is cancelled and full amount is reimbursed . Now question is arise , to recognize the revenue under AS-9 % method , i have following queries:
1. at least 25% salable area is secured by contract or legally enforceable with buyers : can on this basis,only letter of allotment , can it considered as secured contract .
2. can letter of allotment enforceable if the situation is that builder is not willing to enter into contract then , buyer will sue the builders on the basis of letter of allotment, then can we say under situation of 1 that now letter of allotment is enforceable under law.
3. what are the recourse viable to recognize the revenue in f.y.16-17 and 17-18 ?
pl guide on this regards.

Thanks you

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Rajendra K Goyal (Expert) 07 September 2017
Unable to form opinion without referring all the documents, please discuss with local lawyer expert in such cases.