TMI Blog2008 (7) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... imation 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 - 10 of 2006 - - - Dated:- 3-7-2008 - N. P. GUPTA and KISHAN SWAROOP CHAUDHARI JJ. Suresh Ojha for the appellant. K. K Bissa for the respondent. JUDGMENT This appeal has been filed by the assessee against the judgment of the learned Tribunal dated August 29, 2005, passed in Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. That order was upheld in appeal by the learned Commissioner. Then the matter was carried by the assessee in further appeal before the learned Tribunal and the learned Tribunal has decided the appeal by the impugned order. The findings recorded by the Tribunal are contained in para 5 of the judgment, which we may gainfully reproduce being as under: "We have heard the rival submissions and perused the relevant material on record. It is obvious that the assessee had not maintained the books of account in a manner which could assist the computation of correct income. It has also been conceded by the assessee before the Assessing Officer with regard to non-maintenance/irregular maintenance of vouchers in support of expenses. In these cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration to partners as provided in the proviso to section 44AD(2). In our considered opinion, it would be fair and reasonable if the total income of the assessee is computed in this manner. By translating it into the actual calculation, the amount of net profit after depreciation but before remuneration and interest to partners comes at Rs. 3,38,236. The amount of salary and interest to partners has been shown at Rs. 2,52,249. If this amount is deducted, the taxable income comes at Rs. 85,987. We hold this amount to be taxable income liable for taxation." 5. From a reading of this para itself, it is dear, that the learned Tribunal has itself found that the case did not strictly fall within the parameters laid down under section 44AD, howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts exceed more than Rs. 40 lakhs. It is not in dispute that, in the present case, the said amount exceeds Rs. 40 lakhs. Obviously, therefore, section 44AD as such is not applicable. So far as the permissibility of adopting the principle under lying therein is concerned, no legal authority has been shown to support the proposition that in this manner the principle underlying therein can be adopted. May be, that the learned Tribunal claims to be adopting this practice but then, 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. Thus, question No. 3 is answered in favour of the Revenue and against the assessee and it is he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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