Commissioner of Income Tax vs India Carbon Ltd. (No. 1)

In this Income Tax reference the following question has been referred to this court for opinion ;

"Whether, under the facts and circumstances of the case, the Tribunal did not err in facts as well as in law in allowing depreciation on the temple constructed inside the factory building ?"

The assessee, a public limited company, for the assessment year 1985-86 claimed depreciation of Rs. 1,14,997 in respect of a temple constructed within the factory premises. The Assessing Officer disallowed the same on the ground that it was a non-factory building and the temple had nothing to do with the business of the assessee-company. The assessee being aggrieved took up the matter in appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) held that the temple was for the welfare of the staff of the assessee-company and it was having a direct link or attributable aspect with the business activities of the assessee. Therefore, the Commissioner of Income Tax (Appeals) allowed depreciation. Being aggrieved the Revenue preferred an appeal before the Tribunal. The Tribunal following the decision in ATLAS CYCLE INDUSTRIES LTD. Vs. COMMISSIONER OF Income Tax, PATIALA., upheld the order of the Commissioner of Income Tax (Appeals).

Heard Mr. G.K. Joshi, learned standing counsel for the Revenue, and Dr. A. K. Saraf, learned counsel appearing on behalf of the assessee.

It is submitted by learned counsel for the parties that the case is covered by the decision of this court in Commissioner of Income Tax Vs. Associated Flour Mills P. Ltd.,

We have gone through the judgment. In our opinion, the question referred is squarely covered by the said decision. Accordingly, we answer the question in the affirmative, in favour of the assessee and against the Revenue.

A copy of this judgment under the signature of the Registrar and the seal of the High Court shall be transmitted to the Income Tax Appellate Tribunal.