9911796707
TMI Blog2002 (4) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... no dispute about the appropriation towards depreciation, notwithstanding the assessing authority has applied the net profit rate excluding appropriation towards any allowable expenditure. - We are in agreement with the Tribunal for modifying the order passed by the assessing authority by making the net profit rate subject to adjustment towards depreciation and interest on borrowings. - This conclusion, in our opinion, was a pure finding of fact and would not give rise to a question of law much less a substantial question of law unless the finding is shown to be perverse or without any rationale X X X X Extracts X X X X X X X X Extracts X X X X ..... rate at 11 per cent. without subject to any appropriation. For considering that the books of account by the assessee do not disclose the correct picture of profit and gain from business, the Assessing Officer has referred to the net profit rate showing the trading result as per books of account was lower than previous years. Such net profit rate taken into account was without taking into account the allowable depreciation and interest paid to third parties, and the same were still to be appropriated from the net profit so disclosed by the assessee. Likewise for the assessment year 1996-97 the net profit rate disclosed by the assessee in his books of account was arrived at without taking into account depreciation and interest payable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by the Assessing Officer as finally affirmed or modified by the appellate authorities that in determining the income of the assessee on estimated basis, past record and history of assessment is always relevant factor. That history we find up to the finding recorded by the Commissioner of Income-tax (Appeals) as noticed by the Tribunal in para. 16 of its order under appeal which reads as under: The factual position regarding the net profit rate applied by the Assessing Officer and confirmed/sustained by learned Commissioner of Income-tax (Appeals) for the assessment years can be better appreciated from the figures given in the following comparative chart: --------------------------------------------------------------------------- Assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est to third part- interest to separate deduc- ies, sales tax, sub- third parties, tion) letting commission, sales tax, sub- salary and interest letting commis- to partners) sion, salary and interest to partners) 1995-96 10.01% 11% 11.0% (Subject to (Without any (Subject to depreciation, depreciation, further/ interest to third part- interest to separated deduct- ties, sales tax, salary third parties, ion) and interest to partners) sales tax, and interest to partners,comm- ission, salary and interest to partners) 1996-97 10.77% 11% 12% (Subject to (Without any (Subject to depreciation depreciation, further/sep- interest to third parties, interest to arate deduction) salary and interest to third parties) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les tax. Thus, it was apparent from the aforesaid background of the determination of the assessee's income on estimated basis that throughout the net profit rate disclosed by the assessee, has been computed and taken into account by the Assessing Officer to determine the trading results prior to allowance of depreciation and payment of interest to the third parties and has himself determined the net profit rate to be applied subject to similar appropriation. All through past years history of the assessee in connection with income tax assessment is consistent with the finding that the net profit rate disclosed by him in his books of account and the net profit rate applied by the Assessing Officer for estimating his income from business a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant years in question. In this case the very foundation of fixing the net profit rate has been the average net profit rate as has been applied by the Revenue in the past consistently since the assessment year 1989-90 and which has been followed in determining the taxable income of the assessee year after year. Such net profit rate was determined without considering any appropriation towards depreciation and interest on borrowings. Once the basic premise was founded on past history which was apparently denoting towards fixing of net profit rate by the assessing authority vis-a-vis the net profit rate declared by the assessee by excluding the element of depreciation and interest on borrowings whether in computing the net profit rate disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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