N.N.MATHUR, J. - (1.) THIS is a reference application under S. 256(2) of the IT Act, 1961, at the instance of the CIT, Jodhpur.
(2.) THE respondent-assessee is a contractor. During the course of assessment proceedings, the AO applied provisions of S. 145 of the IT Act on account of certain discrepancies noticed in the books of accounts of the respondent-assessee. The AO applied net profit rate of 10 per cent on total receipts shown. This rate of net profit was applied after considering admissible depreciation. The CIT(A) directed that depreciation should be allowed from income worked out at the rate of 10 per cent on the contract receipts. The Tribunal has confirmed the order of the CIT(A). It is submitted by Mr. Bhandawat that the Tribunal has erred in law in not appreciating the fact that when income was determined by applying a net profit rate, all such deductions are treated to be allowed. It is also submitted that the claim in this regard cannot be considered to be covered by the provisions of S. 40(b) as in the instant case provisions of S. 145 were invoked and the income was not determined according to the provisions of ss. 28 to 43C.
(3.) THE question of law sought to be referred is concluded by the decision of this Court in CIT vs. Jain Construction Co. & Ors. (1999) 156 CTR (Raj) 290 : (1999) 245 ITR 527 (Raj), wherein it is held that in case of estimation of income, depreciation should be allowed separately.;