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2013 (10) TMI 374 - HC - Income TaxAllowability of Depreciation, when income is computed on estimate basis after rejection of books of accounts - Penalty u/s 271(1)(c) of the Income Tax Act was levied – Held that:- Upheld Net Profit @ 3.5% estimated by the Tribunal, being question of fact. But directed the A.O. that no separate deduction like depreciation will be allowed - When the Net Profit is made on estimate basis after rejecting the books of account, then no deduction including depreciation is allowed - When the books of accounts were rejected, then the assessee is not entitled for the depreciation separately on the same set of books of accounts which have no value after its rejection - Penalty orders, which are consequential to the quantum appeals, have become meaningless. Therefore, the penalty orders are not sustainable.
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