TMI Blog2001 (7) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... nts have been advanced on this aspect. Hence, assessee's grounds on this aspect are rejected. 3. The only other effective ground urged in this appeal is that the Dy. Commissioner (Appeals) erred in upholding the addition made by the Assessing Officer under the head 'short-term capital gains' relating to the sale of a car. 4. The assessee was running a kirana shop and also plying a car on hire. In the year of account relevant for the year under appeal, assessee claimed that he has sold the car for an amount of Rs. 50,000. But, no capital gains was offered for tax. The Assessing Officer observed that the car was purchased in April 1990 for an amount of Rs. 20,000, and the assessee had been returning the income from both kirana shop and pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orked out as under: Purchase value (April, 1990) Rs. 20,000 Less : Depreciation at 40% for the assessment year 1991-92 Rs. 8,000 ---------- Rs. 12,000 Less : Depreciation at 40% for the assessment year 1992-93 Rs. 4,800 ---------- W.D.V. as on 1-4-1993 Rs. 7,200 Sale value in March, 1993 Rs. 50,000 -- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 31 August, 1965, which reads as under : 'Estimation of net profits and allowability of depreciation allowance Instructions regarding. Numerous instances have come to the notice of the Board where assessee's claim for depreciation duly shown in the return was not considered by the Income-tax Officer because books of account produced were not properly maintained and it was necessary to estimate profits by invoking the proviso to section 13 of the Indian Income-tax Act, 1922. The course generally followed in such cases was to estimate the net income. The decision of the appellate authorities in such cases was that the mere fact that net profits had been estimated could not be a ground for saying that depreciation claimed in the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of depreciable assets would continue to be the same as at the end of the preceding year as no depreciation would actually be allowed in the assessment year.' In the light of the above Circular of the Board, it is pleaded that where no particulars have been furnished by the assessee regarding the asset eligible for depreciation, the ITO should estimate the income without allowing depreciation allowance. As it is not the case of the Department that the assessee has furnished the relevant particulars regarding the car in question, it is claimed that the Assessing Officer must be deemed to have estimated the income without allowance of depreciation, and so, the Assessing Officer was not justified in reducing the depreciation for the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessarily presumed that the assessee returned the income, after taking into account the depreciation allowable under section 32 of the Act. 8. Having regard to rival submissions, I am of the view that the assessee deserves to succeed. I have asked for statement of computation of income filed by the assessee for the assessment year 1993-94. It read as under : "Computation of Income Business: Net income estimated by way of purchases and sales of Kirana and other goods including car hire income (Other source) AP- 11-4863 28,100-00 Property Open land Sy. No. 29 jointly at Jalapalli Village Saroornagar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0] 243 ITR 56. In that case, the Apex Court took the view that depreciation cannot be thrust upon the assessee. The assessee had the option of either claiming it or postponing the claim to a subsequent year. The Hon'ble Supreme Court in that case observed as under - 'We get support from the earlier decision of this Court in CIT v. Dharam pur Leather Co. Ltd [1966] 60 ITR 165. Allowance of depreciation is calculated on the written down value of the assets, which written down value would be the actual cost of acquisition less the aggregate of deductions 'actually allowed' to the assessee for the past years. 'Actually allowed' does not mean 'notionally allowed'. If the assessee has not claimed deduction of depreciation in any past year it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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