Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 596 - AT - Income TaxN.P. determination - Determining a rate of 4% to disclosed turnover - allowability of depreciation allowance - Held that:- From past profit history chart of the assessee, it is abundantly clear that the average rate of profit of last four years was @ 2.74% of Turnover before Depreciation. Even if immediately preceding year's percentage is considered, it is 3.90%. On that basis estimated net profit @ 4% of turnover of ₹ 59,83,70,923/- will be ₹ 2,39,34,837/-. This net profit would be before depreciation, and depreciation allowance should be provided separately. Whether depreciation allowance should be provided separately or not - Held that:- Depreciation shall have to be allowed separately, even if in case of estimation of net profit. Hence, in assessee`s case under consideration the assessable income is to the tune of ₹ 2,39,34,837/- which would be further reduced by depreciation. It has been held in the case of Lali Construction Co. vs. Asstt. CIT [2014 (9) TMI 500 - PUNJAB & HARYANA HIGH COURT]that depreciation is allowable from net profits, even if total income is computed by applying net profit rate. Thus we consider it fair and direct the A.O. to apply the rate of 4% to disclosed turnover and depreciation should be allowed separately from the profit so arrived by applying rate of 4% to disclosed turnover. - Decided against revenue.
|