COMMISSIONER OF INCOME TAX Vs. AMRITLAL KHATRI

JUDGEMENT

(1.) THIS is a reference application under S. 256(2) of the IT Act, 1961, at the instance of the CIT, Jodhpur.

(2.) THE respondent-assessee is a contractor. During the course of assessment proceedings, the AO applied provisions of S. 145 of the IT Act on account of certain discrepancies noticed in the books of accounts of the respondent-assessee. The AO applied net profit rate of 10 per cent on total receipts shown. This rate of net profit was applied after considering admissible depreciation. The CIT(A) directed that depreciation should be allowed from income worked out at the rate of 10 per cent on the contract receipts. The Tribunal has confirmed the order of the CIT(A).

(3.) THE question of law sought to be referred is concluded by the decision of this Court in CIT vs. Jain Construction Co. & Ors. (1999) 156 CTR (Raj) 290 : (1999) 245 ITR 527 (Raj), wherein it is held that in case of estimation of income, depreciation should be allowed separately.