2012 (8) TMI 1060 - AT - Income Tax

Summary

Issues Involved: Appeal by Department against CIT(A) order for assessment year 2008-09.

Depreciation and Interest Deduction:
The Department raised the issue of allowing depreciation and interest from 8% net profit rate without appreciating the application of net profit rate after considering all facts. The AO rejected the books of accounts u/s 145(3) due to lack of maintenance of stock register, consumption records, and supporting vouchers. The CIT(A) directed the AO to allow deduction of depreciation and interest at 8% on contract receipts based on ITAT Jaipur Bench's decision for the assessment year 2007-08. The Tribunal upheld the CIT(A) order, citing judgments of Jurisdictional High Court in support, and dismissed the Department's appeal.

Decision:
The Tribunal dismissed the Department's appeal, affirming the CIT(A) order to allow depreciation and interest deductions at 8% net profit rate based on previous decisions and High Court judgments.