TaxTMI 
TaxTMI 
2015 (4) TMI 1115
X X X X Extracts X X X X
X X X X Extracts X X X X
....n both the appeals are common and identical, for the sake of convenience we propose to refer to the facts as involved in AY 2009-10. 3. Briefly the facts are, assessee a partnership firm is engaged in the business of executing civil contract work. For the AY under consideration, assessee filed its return of income on 28/09/2009 declaring total income of Rs. 1,84,34,180. In course of assessment proceeding, AO after verification of books of account and bills & vouchers was of the view that the expenditure claimed by assessee, being not fully supported by authentic bills and vouchers, are not verifiable. Therefore, AO opined that books of account of assessee could not be relied upon and have to be rejected . After rejecting the books of acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... revised, as according to ld. CIT, assessment order passed is erroneous and prejudicial to the interests of revenue. Though assessee objected to the initiation of proceeding u/s 263 of the Act, but, ld. CIT rejecting all submissions of assessee passed the impugned order setting aside the assessment order and directing the AO to add depreciation of Rs. 1,28,36,934 to the total income determined by him for the AY 2009-10. Similar direction was also issued by ld. CIT to add an amount of Rs. 1,17,72,890 being the depreciation allowed by AO for the AY 2010-11. Being aggrieved of such directions of ld. CIT, assessee is before us. 5. Ld. AR submitted before us, AO having allowed depreciation claimed by assessee after making necessary enquiry an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f M/s Indwell Constructions Vs. CIT (supra) and the decision of the ITAT in case of Sri P.V. Sitaramaswamy Vs. Addl.CIT in ITA No. 264/Hyd/12 dated 09/01/13. Ld. CIT observed that once income is estimated all related expenses and other eligible deductions is deemed to have been taken care of and there is no scope for allowing further deductions. However, as can be seen, in the present case, the provisions of section 44AD are not applicable as receipts from contract business is much more than the prescribed limit. Moreover, AO while estimating the profit from contract business has applied a much higher rate than the rate prescribed u/s 44AD. In these circumstances, it cannot be said that once profit is estimated no further deduction is allow....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Act is so firm and strong that if for any reason it becomes impermissible or unnecessary for an assessee to seek the allowance of depreciation for a particular Assessment Year, he is entitled to carry it forward, for the subsequent years. In such an event, it assumes the character of unabsorbed depreciation. In this very case, the Assessing Officer permitted the allowance of unabsorbed depreciation to the respondent. However, he denied the benefit of the allowance of current depreciation and interest. No reference is made to any provision of law to make such distinction. His understanding of the matter is that Section 44AD of the Act, that provides for a comprehensive formula of determining net profit derived by a civil contract or at 8%....