Tribunal Upholds CIT(A) Order Allowing Depreciation & Interest Deductions

The Tribunal dismissed the Department's appeal against the CIT(A) order for assessment year 2008-09, upholding the allowance of depreciation and interest deductions at 8% net profit rate. The Tribunal relied on previous decisions and High Court judgments to support the CIT(A)'s directive, emphasizing the proper consideration of net profit rate and rejecting the Department's challenge regarding the maintenance of accounts.

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Issues Involved: Appeal by Department against CIT(A) order for assessment year 2008-09.

Depreciation and Interest Deduction:
The Department raised the issue of allowing depreciation and interest from 8% net profit rate without appreciating the application of net profit rate after considering all facts. The AO rejected the books of accounts u/s 145(3) due to lack of maintenance of stock register, consumption records, and supporting vouchers. The CIT(A) directed the AO to allow deduction of depreciation and interest at 8% on contract receipts based on ITAT Jaipur Bench's decision for the assessment year 2007-08. The Tribunal upheld the CIT(A) order, citing judgments of Jurisdictional High Court in support, and dismissed the Department's appeal.

Decision:
The Tribunal dismissed the Department's appeal, affirming the CIT(A) order to allow depreciation and interest deductions at 8% net profit rate based on previous decisions and High Court judgments.

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