(a) Income-tax---

----Business expenditure ---Sales tax, profession tax and municipal tax paid before due date for filing return---Deduction allowable---Indian Income Tax Act, 1961, Ss-43-B, Expln. 2 & 139(1).

The outstanding liability of sales tax, profession tax and municipal tax, if paid by the statutory dates for payment fixed by the respective State law or if paid prior to filing of the return in accordance with section 139(1) of the Income Tax Act, 1961, is allowable as a. deduction in view of the insertion of Explanation 2 to section 43-B of the Act, by the Finance Act; 1989, with retrospective effect from April 1, 1984.

CIT v. Bharat Bamboo and Timber Suppliers (1995) 219 ITR 212 (Gauhati) fol.

(b) Income-tax---

----Depreciation---Building---Templeconstructed within premises- Depreciation allowable---Indian IncomeTax Act, 1961, S.32.

Depreciation was allowable in respect of the temple building constructed within the premises of the assessee.

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

G.K. Joshi for the Commissioner.

Dr. A.K. Saraf and K.K. Gupta for the Assessee.

JUDGMENT

The following questions have been referred by the Tribunal at the instance of the Revenue under section 256(1) of the Income-tax Act, 1961:

"(1)Whether, on the facts and in the circumstances of the case, the Tribunal has erred in law in allowing depreciation of the temple building constructed in the premises of the assessee?

(2)Whether, on the facts and in the circumstances of the case and in view of insertion of Explanation 2 to section 43-B by the Finance Act, 1989, with retrospective effect from April 1, 1984, the Tribunal was justified in law in directing that the outstanding liability of sales tax, professional tax and municipal tax be allowed if paid by the statutory dates for payment fixed by the respective State law or if paid prior to filing of return as per section 139(1) of the Income-tax Act?"

We have heard Dr. A. K. Saraf, counsel appearing on behalf of the assessee, and Mr. G. K. Joshi, senior standing counsel for the Department. Counsel for the parties submit that the question No.2 is covered by the decision rendered on January 10, 1996, by this Court in CIT Bharat Bamboo and Timber Suppliers (1996) 219 ITR 212. Following the said decision, we answer the question in the affirmative, i.e., in favour of the assessee and against the Revenue.

So far question No. 1 is concerned, Dr. Saraf submits that the question is squarely covered by the decision in Atlas Cycle Industries Ltd. v. CIT(1982)134 ITR 458 (P&H).

Mr. Joshi, however, submits that the temple building cannot be a business asset and hence depreciation is not allowable under the provisions of the Act. We have gone through the decision. In our opinion, there is nothing to disagree with the said decision and accordingly we answer this question 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.

In the facts and circumstances of the case, there will be no direction as to costs.

M.B.A./1230/FC