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TMI Blog2010 (9) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... ced defects in the maintenance of accounts and since the true taxable income was not disclosed in the accounts, invoking proviso to Section 145(1) of the Act, the Assessing Officer made assessment after applying net profit rate of 10% - Held that: - depreciation having been already taken into account while determining the income at net profit rate of 10%, the same could not be taken into account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s applied in other comparable cases and the net profit excludes a separate allowance of any other expenditure claimed under profit and loan account and trading account?" 2. The assessee is a MES Contractor. During the course of assessment, the Assessing Officer noticed defects in the maintenance of accounts and since the true taxable income was not disclosed in the accounts, invoking proviso to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of profit without giving them advantage of depreciation as discussed already with many contractors debit various items which relate to profit & loss or trading account expenditure and claimed 100% of depreciation. This method creates an abnormal situations in the net profit. The A.O. has, therefore, taken a proper course by ignoring depreciation and the interest and applied net rate of 10%. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcular, the Tribunal held on facts that the depreciation having been already taken into account while determining the income at net profit rate of 10%, the same could not be taken into account once again. 6. We find merit in the contention raised on behalf of the revenue. As already observed, the depreciation has to be taken into account out of the net profit rate but if the same has already take ..... X X X X Extracts X X X X X X X X Extracts X X X X
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