Separate depreciation computation required despite profit estimation; matter remitted for fresh assessment on produced material.

Estimated profit did not conclude the depreciation claim because the governing CBDT circular required depreciation to be computed separately. Following an earlier Tribunal view on the same issue, the lower orders were set aside and the matter was remitted for fresh computation after the assessee produced the necessary material and was given an opportunity of hearing. Depreciation was therefore to be worked out independently, with the assessing officer to decide afresh in accordance with law.

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Issues: Whether depreciation is to be worked out separately and allowed while estimating the profit, and whether the matter required reconsideration by the assessing officer.

Analysis: The estimation of profit could not be treated as concluding the depreciation claim where the governing CBDT circular required depreciation to be computed separately. The issue was identical to an earlier year decided by the Tribunal, which had held that estimated net profit must be subjected to depreciation and had remitted the matter because complete particulars were not then available. Following that view, the lower authorities' orders were set aside and the matter was sent back for fresh computation of depreciation on the basis of material to be produced by the assessee after giving opportunity of hearing.

Conclusion: Depreciation was required to be worked out separately, and the issue was remitted to the assessing officer for fresh decision in accordance with law.

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