2006 (4) TMI 234

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..... ssment year involved in this appeal is 2001-02. 2. The only issue in this appeal of the Revenue is that the CIT(A) has wrongly allowed the claim of the assessee after reworking the depreciation at 20 per cent, for the purpose of computing the short-term capital gains from the sale of two mini vans used in the business of hiring. 3. We have heard both the sides and gone through the facts of the .....

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..... esumptive provisions. The AO requested the assessee to rework the capital gain after giving affect to depreciation and recomputing the WDV of these vehicles. The assessee has worked out the WDV of 2 vehicles as on 1st April, 2000 at Rs. 1,91,398 and offered capital gain at Rs. 11,102. It is noticed that the assessee has worked out depreciation @ 20 per cent instead of 40 per cent allowable. The as .....

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..... t depreciation was granted. The Revenue is in appeal before the Tribunal. The learned counsel of the assessee fairly admitted that these vehicles are run on hire and from hiring the assessee is declaring income under s. 44AE but he argued that provisions of s. 44AE nowhere state that the deemed depreciation is allowed. At the time of hearing, we have gone through the provisions of s. 44AE where sp .....

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..... shall be deemed to be the aggregate of the profits and gains, from all the goods carriages owned by him in the previous year, computed in accordance with the provisions of sub-s. (2). (2) ............... (3) Any deduction allowable under the provisions of ss. 30 to 38 shall, for the purposes of sub-s. (1), be deemed to have been already given full effect to and no further deduction under those .....

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..... s perverse, as the learned counsel of the assessee himself admitted that the vehicles are used for hiring. Once the deemed depreciation is allowed @ 40 per cent, the WDV is to be calculated on that basis only and that has rightly been done by the AO. In view of this, we allow the claim of the Revenue and the order of the CIT(A) is set aside. 6. In the result, the appeal of the Revenue is allowed .....

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