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2001 (9) TMI 14 - HC - Income Tax"Whether, on the facts and in the circumstances of the case, the Tribunal was right in treating the claim of depreciation as covered in the rate of net profit applied by it?" In CIT v. Jain Construction Co., this court has taken a view that the Central Board of Direct Taxes has a power to issue circulars and they are binding on the income-tax authorities. In the instant case, the Tribunal has not taken into consideration the circulars of the Central Board of Direct Taxes and simply ordered that the net profit rate of 7 per cent. will cover the allowance of depreciation and interest, In our opinion, the Tribunal was wrong in treating the claim of depreciation as covered in the rate of net profit of 7 per cent. - The reference is, accordingly, answered and returned to the Income-tax Appellate Tribunal, Jaipur Bench, to decide the appeal afresh after giving an opportunity of hearing to the assessee as well as the Revenue Department in the light of the law laid down in Jain Construction Co.'s case
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