Estimation of business income after rejection of books, with depreciation allowed, upheld on prior-year consistency.

Where books of account were rejected under section 145(3), the dispute concerned estimation of business income and allowance of depreciation on fixed assets. The ITAT Jodhpur followed its earlier order in the assessee's own case on the same controversy, noting that the gross profit rate, alleged defects in the books, treatment of indirect expenses, and entitlement to interest expenditure and depreciation had already been examined. As the issues were covered by the prior reasoned decision, no independent basis remained to disturb the income assessment on that footing. The Revenue's challenge therefore failed and the appeal was dismissed in favour of the assessee.

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Issues: Whether the Revenue was justified in challenging the estimation of business income after rejecting the books of account under section 145(3) and the allowance of depreciation on fixed assets.

Analysis: The appeal was decided by following the earlier order in the assessee's own case involving the same controversy. The existing finding had already examined the assessee's gross profit rate, the alleged defects in the books, the treatment of indirect expenses, and the entitlement to interest expenditure and depreciation. As the core issues stood covered by the earlier reasoned decision, no independent basis remained to disturb the assessment of income made in accordance with that view.

Conclusion: The Revenue's challenge to the estimation of income and the allowance of depreciation failed, and the appeal was dismissed in favour of the assessee.

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