1993 (8) TMI 115

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..... ciation claimed on car. Only 1/8th of depreciation was allowed after considering quantum of professional receipts shown and state of professional take off of the assessee. 2. The assessee retired on 31-12-1989 as a Legal Officer from the Ministry of External Affairs, Government of India and thereafter decided to resume legal practice after applying for revival of her licence to practise. The lice .....

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..... re DCIT (Appeals) and reiterated her claim that car was purchased and used for professional purposes and, therefore, entire amount of depreciation was to be allowed. The learned DCIT (Appeals) disagreed and confirmed the disallowance. In his view the claim of depreciation against professional receipt of Rs. 6,000 was a device adopted to avoid the tax. It was a colourable device being resorted to a .....

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..... perhaps only receipts and expenditure actually disbursed are to be considered for the computation of income and exhaustion or diminution in the value of a capital asset has no role to play. But under every system of accounting normal depreciation is considered as legitimate deduction in determining the true profits. This has been statutorily recognised in section 32 of the Act. Thus short questio .....

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..... ssessee invested more than Rs. 1,20,000 for acquiring the car and admittedly used the same for professional purposes in the period under consideration. 6. The learned authorities below did not accept high claim of depreciation of Rs. 40,622 against professional receipt of Rs. 6,000 only since professional activities of the assessee were at an initial stage. But as noted above, no such condition i .....

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..... rities in calling purchase of car and claim of depreciation thereon as a device only because of small professional income. The view taken by lower authorities is totally untenable under the law and cannot be sustained. As the assessee has fulfilled all the statutory conditions to claim depreciation, the same has to be allowed. The Assessing Officer is accordingly directed to allow the claim of the .....

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