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2014 (9) TMI 205 - HC - Income TaxAllowability of depreciation and interest payment from estimated profits @ 12% - Held that:- Revenue is not able to point out any provision of law in the Act or Rules made, which restricts the allowance of the depreciation and interest - the facility created under the Act is so firm and strong that if for any reason it becomes impermissible or unnecessary for an assessee to seek the allowance of depreciation for a particular AY, he is entitled to carry it forward, for the subsequent years - it assumes the character of unabsorbed depreciation - the AO permitted the allowance of unabsorbed depreciation - No reference is made to any provision of law to make such distinction - If an assessee is entitled to claim deduction of interest, be it u/s 36(1)(iii) of the Act or any other relevant provision and of depreciation u/s 37 of the Act, in the ordinary course of assessment, there is no reason why the same facilities be not extended to him, merely because the profit is determined on the basis of estimation - depreciation and interest, which are otherwise deductable in the ordinary course of assessment, remain the same legal character, even where the profit of assessee is determined on percentage basis - relying upon Circular dated 31.08.1965 issued by the Central Board of Direct Taxes –The order of the Tribunal is upheld – Decided against Revenue.
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