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TMI Blog1965 (2) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... ifference between the original and the written down values of the three lorries?" The material facts are these: The relevant year of assessment is the assessment year 1949-50, the previous year being the financial year ending the 31st of March, 1949. The assessee, inter alia, derives income from plying of lorries. In the previous year the assessee plied eight lorries. Out of these he sold three lorries at a price of ₹ 36,100. The Income-tax Officer computed the profits on the sale of the aforesaid three lorries under the second proviso to section 10(2)(vii) at ₹ 19,728. In his assessment order he did compute or furnish the written down value of the three lorries but took the computation of written down value as made in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cks were sold for ₹ 36,100 the profit under section 10(2)(vii) was worked out at ₹ 19,728. On appeal, the Appellate Assistant Commissioner upheld this add-back of ₹ 19,728 on account of a balancing charge. Aggrieved, the assessee went up to the Income-tax Appellate Tribunal which not only reduced the estimated income from the plying of lorries but also the profit under section 10(2)(vii) which was estimated at ₹ 10,000 against ₹ 19,728 taken by the departmental authorities. The assessee's application under section 66(1) having been rejected he came up to this court contending, inter alia, that there did not exist any written down value in respect of the three lorries which were sold by him and since no de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can or cannot be worked out. In our judgment the question as framed includes the question as to whether the Income-tax Officer could at all compute the written down value in the circumstances of this case. The contention, as already noticed, before this court when an application under section 66(2) was moved was primarily one which related to the power of the Income-tax Officer to work out the written down value, when no such depreciation allowance was actually allowed in the earlier years. In these circumstances, there can be no warrant for restricting the question as is contended for by the learned standing counsel. The scheme of the Act is that for determining the income from business, profession or vocation the provisions of section 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act had been furnished and when even for the assessment year 1948-49 the assessee had not furnished any such particulars, could the Income-tax Officer, for the obvious reason that he wanted to bring to charge the profit under section 10(2)(vii), compute the written down value by taking the initial cost at an estimated figure? The best that the department can say is that depreciation was "actually allowed" in the assessment year 1948-49 for the first time. When income is estimated under the proviso to section 13 it may be possible to take the question of depreciation into consideration, but that would not mean that depreciation was "actually allowed". What is required is an actual allowance which can only mean that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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