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2008 (7) TMI 505 - HC - Income TaxAssessing Officer rejected the books of account and made a best judgment assessment determining the gross profit and then from out of that allowed various admissible deductions including depreciation - Tribunal has itself found that the case did not strictly fall within the parameters laid down under section 44AD, however, since the Tribunal found that it is regularly seeking guidelines from this section for applying the net profit rate the net profit rate was applied and directed to be calculated after depreciation, but before remuneration and interest to the partners. – Held that in a case of rejection of accounts and estimation of net profit on best judgment basis, depreciation was to be allowed – Since the gross receipts exceeded Rs. 40 lac, section 44AD of the Act was not applicable - In our view, in taxing statutes, such adopting the principle underlying other sections cannot be said to be permissible and sooner the practice is stopped, the better – Tribunal was not justified in adopting the principle underlying section 44AD of the Act, when it was not applicable
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