2012 (8) TMI 1181 - AT - Income Tax

Summary

Issues Involved: Appeal by Department against CIT(A) order for AY 2008-09 regarding depreciation and financial expenses.

Depreciation and Financial Expenses:
The Department appealed against the CIT(A) order allowing depreciation and financial expenses based on a net profit rate of 8%. The AO rejected the books of accounts due to lack of proper documentation and applied an 8% net profit rate on gross receipts, disallowing depreciation and interest claimed. The assessee contended that better results were declared compared to a previous case and cited precedents to support their claim. The CIT(A) upheld the rejection of books but allowed depreciation and finance charges based on a previous Tribunal order for AY 2006-07. The Department's appeal was supported by the ld. DR, while the assessee's counsel relied on the Tribunal's previous decision and case laws. The Tribunal noted the earlier decision supporting allowance of depreciation and financial expenses from net profit, citing relevant case laws. Consequently, the Tribunal dismissed the Department's appeal, affirming the CIT(A)'s order.

(Order Pronounced in the open Court on 30-08-2012).