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TMI Blog2021 (10) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... d liable to be set aside? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in directing the assessing officer to estimate the income tax 12.5% of the gross receipts and to grant depreciation? By assessment order dated 01.12.2020, the Assessing Officer estimated the income of the assessee for the accounting year 2008-09 at the rate of 12.5% on contractual receipts in view of the ratio laid down in the case of 'KNR Constructions Vs. DCIT (ITA No.9/HYD/2007)'. Upon making such estimation, the Assessing Officer allowed depreciation under Section 32 of the Act from income so estimated. Subsequently, by invoking the powers under Section 154 of the Act, the Assessing Officer added the depreciation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able question of law cannot fall within the ambit of mistake apparent on the face of record, which is a condition precedent for invoking powers of rectification under Section 154 of the Act. He submits that the issue whether deduction on accounts on depreciation is permissible on estimated income is no longer res integra in view of the decision of this Court in 'CIT Vs. Y.Ramachandra Reddy (2015) 372 ITR 077'. He further submits that the ratio in Indwell Constructions (supra) does not deal with deduction on account of depreciation and is distinguishable from the facts of this case. Section 154 of the Act empowers an Assessing Officer to rectify a mistake which is apparent from the record. A mistake can be said to be apparent on the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same facilities be not extended to him, merely because of the profit is determined on the basis of estimation as was done in the instant case. We are of the view that depreciation and interest, which are otherwise deductable in the ordinary course of assessment, remain the same legal character, even where the profit of assessee is determined on percentage basis." The legal position enunciated in Ramachandra Reddy (supra) is that an assessee is not automatically disentitled to depreciation where the profit is determined on percentage basis. Hence, the issue of deduction on the score of depreciation from gross income which is computed on the basis of estimation is a debatable one and cannot be a palpable error on the face of the record. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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