2004 (7) TMI 37

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....rn was processed and the assessee/respondent was asked to reconcile the opening capital of Rs. 1,53,033.25 with the closing balance as on March 31, 1987. The representative of the assessee/respondent has filed a reconciliation statement, but however, the assessing Officer found the same as erroneous. Since the assessee/respondent has not filed a cash flow statement, the Assessing Officer himself has prepared a cash flow statement for the period from April 1, 1987 to March 31, 1990 and called upon the assessee/respondent to file his objections, if any. Thereafter, the Assessing Officer has made an addition of Rs. 2,40,725.37 towards the drawings for personal expenses and found that the source was not satisfactorily explained and the same was....

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....r depreciation on the ground that it is only a notional allowance while showing the depreciated value of the assets in the assets side of the balance-sheet. We have considered the above contentions urged by learned counsel for the appellant in the light of the orders passed by the Commissioner of Income-tax (Appeals) as well as the Appellate Tribunal. A perusal of the order of the Commissioner discloses that a factual finding is rendered to the effect that the Assessing Officer has committed an error in holding that depreciation should have been considered in the profit and loss account and the net profit alone should have been credited to the capital. It is further held therein that depreciation is a notional allowance given for the ....