Law: Income Tax Act, 1961

Section: 32

Income-tax--ssessment-Agreed assessment-Assessment made at a particular figure after considering depreciation, with agreement of assessee-­Assessee deriving benefit froze agreed assessment-Assesses cannot sub­sequently claim that depreciation was not actually allowed. Madeva Upendra. Sinai v. Union of India (1975) 98 I T R 209 fol. Union of India v. T. R. Verma (1957) A I R 1957 S C 882 ref. JUDGMENT M. R. SHARMA, J.-The Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh, has referred the following questions of law to us for our opinion: "(1) Whether, on the facts and in the circumstances of the case, the profits under section 41(2), second proviso, should be computed by deducting depreciation actually allowed under section 32 and not any notional depreciation allowable under section 32 from .the written down value of trucks within the meaning of section 43 (6)(b) ? (2) Whether the Tribunal was right in law in holding that depre­ciation was computed and allowed actually in 1971-72 assessment year on the trucks sold in the assessment year 1972-73 ?" The assessee is an individual deriving rental income from property and income from the business of plying trucks. For the assessment year 1972-73, the assessee sold 3 trucks for a sum of Rs. 93,000. The said trucks had been purchased by the assessee during January, 1971, i.e. during the accounting period relevant to the assessment year 1971-72 at a total cost of Rs. 79,000 The assessee accordingly surrendered by way of revised return an amount of Rs.14000 to be taxed as capital gains. The I.-T.O. however, took into consideration the assessment order in the case of the assessee for the year 1971-72, which reads like this "The assessee has shown income from various old trucks at Rs. 9,100. After discussion, the income from truck is taken at Rs. 12,350, after considering the depreciation allowed (as agreed to by the assessee). Here the assessee also concealed true particulars of his income." From this order, be concluded that total depreciation of Rs.23,700 had been allowed to the assesses for the assessment year 1971-72. Consequently, he held that for the assessment year under consideration the assessee would…

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