Income-tax---

----Depreciation---Temple constructed inside factory building---Is for welfare of the staff---Has direct link, with business activities---Depreciation allowable---Indian Income Tax Act, 1961, S.32.

Held, that depreciation was allowable on the temple constructed inside the factory building.

CIT v. Associated Flour Mills (Pvt.) Ltd. (1996) 221 ITR 123 (Gauhati) fol.

Atlas Cycle Industries Ltd. v. CIT (1982) 134 ITR 458 (P&H) ref.

G. K. Joshi for the Commissioner.

Dr. A.K. Saraf for the Assessee

JUDGMENT

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. v. CIT (1982) 134 ITR 458 (P&H) 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 CIT v. Associated Flour Mills (Pvt.) Ltd. (1996) 221 ITR 123.

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.

M . B. A. / 1231 /FCOrder accordingly.