TMI Blog2001 (9) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Board of Direct Taxes has a power to issue circulars and they are binding on the income-tax authorities. In the instant case, the Tribunal has not taken into consideration the circulars of the Central Board of Direct Taxes and simply ordered that the net profit rate of 7 per cent. will cover the allowance of depreciation and interest, In our opinion, the Tribunal was wrong in treating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation as covered in the rate of net profit applied by it?" The assessee-firm, carrying on construction business, had shown a net profit of 5.6 per cent. on total contract receipts of Rs. 64,30,344. As most of the expenses including the labour payments were unvouched, the assessing authority applied the provisions of section 145 of the Income-tax Act, 1961, and determined the income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit rate to 7.44 per cent. The Tribunal without giving any reason has simply brought down the rate to 7 per cent. As to how the Tribunal had dealt with the aspect is evident from the part of the order, which is extracted as follows: "The Assessing Officer, therefore, raised the net profit rate from 5.63 per cent. to 8 per cent. After the relief given by the Commissioner of Income-tax (Appeals), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om April 1, 1993. Thus, it applies in relation to the assessment year 1993-94. In CIT v. Jain Construction Co. [2000] 245 ITR 527, this court has taken a view that the Central Board of Direct Taxes has a power to issue circulars and they are binding on the income-tax authorities. In the instant case, the Tribunal has not taken into consideration the circulars of the Central Board of Direct Taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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