When we want to calculate Small signal models for a bjt we make all caps shorted (that because they are low impedance or shorted when operated in AC), but I am not able to understand why we make to power supply equal to zero too?
The Small signal model is strictly AC, thus all DC sources are set to zero. The DC source does determine the operating point of the transistor which does establish the small signal characteristics. But for AC signal calculation all DC signals are ignored.