2000 (12) TMI 216 - AT - Income Tax

Summary

Issues:
1. Appeal against CIT(A) order and CO filed by assessee.
2. Application of proviso to s. 145(1) and determination of net profit rate.
3. Claim of depreciation and interest by assessee.
4. CIT(A) directing AO to allow depreciation and interest.
5. Department's appeal and arguments.
6. Assessee's submissions and reliance on case laws.
7. Tribunal's analysis of the case law and decision.
8. C.O. raised by assessee regarding depreciation.

Analysis:
1. The Revenue filed an appeal against the CIT(A)'s order while the assessee filed a C.O. arising from the same order.
2. The assessment under s. 143(3) involved the application of the proviso to s. 145(1) due to low declared net profit rate, leading to a dispute over the appropriate net profit percentage.
3. The assessee contended that depreciation and interest should be allowed, citing CBDT Circular and case laws supporting the claim.
4. CIT(A) directed the AO to allow depreciation and interest, emphasizing the need to consider previous appellate orders and Tribunal decisions.
5. The Department's appeal was based on the AO's method and reliance on a previous Tribunal decision.
6. Assessee's representative argued for the allowance of depreciation and interest, distinguishing relevant case laws and highlighting the applicability of certain decisions.
7. Tribunal analyzed the method adopted by the AO, citing a previous case, and upheld CIT(A)'s decision to allow depreciation and interest based on relevant case laws and the jurisdictional High Court's ruling.
8. The C.O. raised by the assessee regarding depreciation was dismissed as infructuous, as the issue had already been decided in the Department's appeal for the same assessment year.

This detailed analysis covers the issues raised in the legal judgment, providing a comprehensive understanding of the arguments, decisions, and legal principles involved in the case.