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2022 (4) TMI 960 - AT - Income TaxAllowability of depreciation from the estimation of income - Depreciation from the net profit estimated from contractual receipt - HELD THAT:- All deductions are referred to under section 29 are deemed to have been taken into account while making such an estimate. This means that the allowability of expenditure as specified in section 28 to 44 are deemed to have been allowed and no further deductions shall be allowed when the incomes are estimated. We also note that the Ld.CIT(A) has adopted net profit of 8% on gross contract receipts, which is reasonable. CIT(A) after considering the facts and circumstances of the case rightly estimated the net profit at 8% on gross contract receipts. CIT(A) has erred in allowing further deduction such as interest / remuneration to partners and depreciation. Respectfully following the decision of Indwell Constructions [1998 (3) TMI 121 - ANDHRA PRADESH HIGH COURT] and the decision laid down in G.Raja Gopala Rao[2017 (1) TMI 1194 - ITAT VISAKHAPATNAM] we are inclined to set aside the directions of the Ld.CIT(A) w.r.t allowing further deduction such as interest / remuneration to partners and depreciation from the estimated income, and allow the appeal of the revenue.
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