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2018 (4) TMI 1956 - ITAT RAIPURValidity of assessment order framed u/s 144 - an ex-parte order - HELD THAT:- We as considered the assessment order and we find that in spite of several notices the assessee did not attend the assessment proceedings and therefore the Assessing Officer was left with no choice but to frame an ex-parte order under section 144 - No infirmity in the order so framed. Ground No. 1 is accordingly dismissed. Estimation of income - estimation of net profit by the CIT(A) @ 3% as against 8% applied by the AO - There is no dispute that the books of account of the assessee are audited and audited financial statements were available with the AO at the time of the assessment proceedings. No doubt the assessee did not produce the relevant bills/vouchers nor any supporting evidence was produced at the time of assessment proceedings. But as mentioned else were the AO should not have ignored the past history of the assessee in estimating the net profit @ 8%. Though FAA has reduced the net profit rate to 3% but at the same time he also ignored the past history of the assessee. Considering the nature of business of the assessee the profit rate as declared appears to be reasonable. No comparable cases have been brought on record by the AO or the CIT(A) to justify the adoption of the profit rate. Therefore we are inclined to accept the profit rate shown by the assessee. The Assessing Officer is directed to accept the net profit rate as shown by assessee in its financial statements. The addition on this ground is directed to be deleted. Non allowability of the depreciation on adoption of profit rate - HELD THAT:- Since the assessee has claimed the depreciation in its return of income and has furnished necessary details in its audited statement of account, in our considered opinion, the claim of depreciation cannot be denied. In light of aforementioned circular Circular No. 029D (XIX-14) dated 31.08.1965 has clarified the claim of depreciation on adoption of profit rate, we accordingly direct the Assessing Officer to allow the claim of depreciation as further provisions of the law. Ground No. 3 is allowed. Disallowance of interest paid u/s 40(a)(ia) - HELD THAT:- In our considered opinion due to the amendment brought in the relevant provisions of the Act this issue needs to be restored to the file of the Assessing Officer. The assessee shall furnish necessary details demonstrating that the payee has shown the receipt of the interest as its income and shall also furnished necessary certificate as provided. AO is directed to verify the details so furnished by the assessee and decide the issue afresh as per the amended provisions of the law. With these directions ground No. 5 is treated as allowed for the statistical purposes.
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