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TMI Blog2015 (8) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit taken at 8% is on higher side. 2. That the Ld. CIT(A) is wrong in not allowing the depreciation on the estimated profit of 8% on gross contract receipts. 3. That the legitimate deduction u/s. 24(b) of the Income Tax Act was disallowed for Rs. 82,604/- is bad in law." 3. Short facts of the case are that the assessee has filed the return of income on 31/10/2010 declaring an income of Rs. 6,24,900/-. The assessee is a contractor executing contract works under the various government departments. The assessee's case was fixed for compliance on various dates as mentioned in assessment order at para 2, but he did not give reply. On 11/11/2010, the assessee appeared and filed some details and thereafter he has not made any compliance, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted in (1995) 211 ITR 253 wherein it is held that while computing the net profit on an estimated basis in the absence of specific observations to that effect where details are available, the Assessing Officer is bound to allow the deduction for depreciation. The depreciation is allowable separately from estimated income is further supported by the express provisions of sec. 44AD, 44AE & 44AF of the Income Tax Act, 1961 (hereinafter referred to as the 'Act', for short) which expressly provide that in computing the deemed income of a construction contractor, transporter or retail trader, all deductions u/s. 30 to u/s. 38 of the Act shall be deemed to have been allowed, and that no further deduction under those sections would be allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgeable to tax under the head "Profits and gains of business or profession" (2) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed : Provided that where the eligible assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of section 40. (3) The written down value of any asset of an eligible business shall be deemed to have been calculated as if the eligible assessee had claimed and had been actually allowed the deduction in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim made in P & L account. Assessee claimed expenses under the heads 'freight' of Rs. 6,46,472/-, 'salaries & wages' of Rs. 68,34,076/-, 'travelling expenses' at Rs. 5,05,981/- and 'other expenses' of Rs. 7,82,700/-. The assessee was asked to produce the salary & wage register and evidence of such expenses. Assessee did not care to produce the books of accounts before the Assessing Officer nor before the Ld. CIT(A). In such circumstances, the Assessing Officer has no alternative except to reject the books and estimated the profit @ 8% on the total turnover. As per sec. 144 of the Act, if the assessee fails to comply with the terms of a notice issued under sub-sec. (1) of sec. 142 and if the assessee fails to provide the necessary inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2011 and this judgment relates to A.Y. 1984-85, therefore this judgment will not helpful to the assessee. We find that the assessee has not produced any evidence before the Assessing Officer, therefore Assessing Officer is justified in estimating the profit at 8% and our interference is not required. This ground of appeal is dismissed. 9. Second ground relates to disallowance of interest on house property claim u/s. 80C of the Act. 10. The assessee claimed a loss of Rs. 82,604/- as interest paid under house property and an amount of Rs. 97,003/- as deduction u/s. 80C of the Act. However, no evidence in support of above claims was produced before the Assessing Officer, the Assessing Officer disallowed the same. The assessee has claimed th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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