9911796707
TMI Blog2022 (9) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... of ITO vs. Sri Gundapaneni Nageswara Rao [ 2014 (5) TMI 344 - ITAT HYDERABAD] under similar set of facts, has directed the AO to estimate net profit of 3% of all deductions including depreciation. There are divergent view from the appellate authorities, the view which is more beneficial to the assessee has to be adopted in case of CIT vs. Vegetable Products Limited [ 1973 (1) TMI 1 - SUPREME COURT] - Therefore, we are of the considered view that since the assessee has not proved the ownership of assets to claim the depreciation and also that the facts of the present case are similar to the facts of the case considered by the ITAT [ 2014 (5) TMI 344 - ITAT HYDERABAD] we deem it appropriate to direct the AO to estimate net profit of 3% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the assessment order and directed the AO to disallow the depreciation of Rs. 1,93,47,466/- since the income is being estimated. Accordingly, notices U/s. 143(2) and 142(1) were issued to the assessee. Further, a show cause notice was issued to the assessee on 28/07/2015 which proposed disallowance of depreciation. The assessee also filed an appeal before the Hon ble ITAT against the order passed by CIT U/s. 263 of the Act. Hon ble ITAT vide its order dated 12/09/2018 dismissed the appeal of the assessee and upheld the order passed U/s. 263 of the Act. Subsequently, an order u/s. 250 of the Act, was passed by the Ld. CIT(A) upholding the order of the Ld. AO passed u/s 143(3) r.w.s 263. Aggrieved by the order of the Ld. CIT(A), the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT vide its order dated 14/2/2017 determined the Net Profit @ 3% on the gross receipts net of all deductions including depreciation. The Ld. AR therefore pleaded that the same 3% be allowed in the instant case. Per contra, the Ld. DR submitted that the assessee habitually never maintained books of accounts and hence 3% estimated by the Hon ble ITAT is on lower side. The Ld. DR supported the order of the Ld. Revenue Authorities. 5. We have heard both the sides and perused the material available on record and the orders of the Authorities below. We find from the order of the Ld. AO, the Ld.AO has followed the directions of the CIT and has estimated the income @ 15% on the gross receipts without allowing the depreciation. It was also foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is more beneficial to the assessee has to be adopted in view of the Supreme Court decision in the case of CIT vs. Vegetable Products Limited [1993] 88 ITR 192. Therefore, we are of the considered view that since the assessee has not proved the ownership of assets to claim the depreciation and alsothat the facts of the present case are similar to the facts of the case considered by the ITAT in ITA No.1799/Hyd/2013 dated 29/04/2014, we deem it appropriate to direct the AO to estimate net profit of 3% on gross receipts net of all deductions including depreciation. Accordingly, we direct the AO to estimate net profit of 3% on gross contract receipts net of all deductions for the AY 2010-11. It is ordered accordingly. 6. In the result, appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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