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2022 (4) TMI 535 - AT - Income TaxRevision u/s 263 - A.O. has completed the assessment estimating the gross income @ 9.50% of the turnover and allowed deduction of depreciation and interest - as per CIT AO in granting depreciation and interest expenditure as deduction is not in accordance with provisions of section 44AD(2) - Also dropping of penalty proceeding initiated u/s 271A of the Act was clearly on wrong appreciation of the judgement of the Court - HELD THAT:- A.O. has applied his mind on the impugned issue and has taken a conscious decision to allow deduction of depreciation and interest after estimating gross income @ 9.50% of the gross receipts. We find merit in the contentions of the assessee that the AO has taken a plausible view in this matter and hence it cannot be considered to be prejudicial to the interest of the revenue. We notice that the above said contentions of the assessee finds support from the decision rendered by Hon’ble High Court of Karnataka in the case of CIT Vs. P. Sudhakar [2015 (1) TMI 1473 - KARNATAKA HIGH COURT] In the instant case, there are two views possible with regard to estimation of income from civil contract works and the assessing officer has taken a plausible view. Accordingly, we are of the view that the revision order passed by Ld. PCIT on this issue cannot be sustained. Accordingly, we set aside his order in directing the A.O. to do de-novo assessment. With regard to the observation of Ld. PCIT that the dropping of penalty u/s 271A of the Act was on wrong appreciation of the judgement of the High Court, the Ld. A.R. contended that the Ld. PCIT should have passed separate order on this issue. However, the Ld. A.R. did not cite any authority in support of his contentions. In any case we notice that the Ld. PCIT has given opportunity to the assessee in this regard. Accordingly, we do not find it necessary to interfere with observations made by Ld. PCIT on the second issue. Appeal filed by the assessee is partly allowed
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