2021 (1) TMI 1201

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....fied to directing AO to apply the position of profits after interest but before depreciation in the year under appeal and in preceding year in spite of significant lapses/ discrepancies on the part of the assessee, which was admitted by assessee himself and AO had invoked the provisions of section 145(3) of the Income Tax Act, 1961?" "2. Whether on the facts an in law the ld. CIT(A) was justified to allowed depreciation on fixed assets (except for the fixed assets added during the year) of Rs. 30,58,84,950/- though it was not supported by any cogent documentary profits / evidences ?" 2. At the outset the ld. AR of the assessee has submitted that the assessee had also submitted appeal against the said order of CIT(A), Udaipur and....

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....te shown by the assessee during the year as compared to the gross profit rate shown in the immediate preceding year while coming to the conclusion of rejecting the books of account and estimating net profit rate. From the record, we found that during the year under consideration, the gross profit rate shown by the assessee is 29.29% as compared to the gross profit rate of 27.87% shown in the immediately preceding year. Thus, we found that the gross profit rate shown during the year is much better than the gross profit of preceding year. Under these facts and circumstances, there is no justification for complete decline of contract expenditure claimed by the assessee which goes to constitute the gross profit rate. We had carefully gone throu....

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....be Rs. 68.70 crores. 25. The gross profit shown by the assessee at Rs. 131.37 crores: Expenditure to be disallowed on account of employees benefit expenses and administrative expenses keeping in view the observation of the AO to the extent of 20%: Rs. 68.70 cores 80% Rs. 54.96 crores Gross Profit   Rs. 76.51 crores So far as the assessee's claim of interest expenses and depreciation is concerned, the same is required to be allowed in view of the judicial pronouncement referred above. 26. Thus, out of profit of 76.51 crores, interest expenditure of Rs. 70.96 crores and depreciation of Rs. 24.23 crores is required to be allowed. 27. In view of the above factual discussions an....