COMMISSIONER OF INCOME TAX Vs. POWER BUILD LIMITED

JUDGEMENT

(1.) (Per Patel, J.) The Commissioner of Income Tax, Baroda, requested the Income Tax Appellate Tribunal, Ahmedabad Bench [hereinafter referred to as the Tribunal] to refer two questions of law; However, only one question is referred which is required to be considered. Referred question reads as under:-

(2.) The assessee, manufacturing various types of motors and weighing machines, provided a canteen for workman at the cost of Rs.2,82,268.00. The assessee claimed depreciation at the rate of 5% specifically stating that 2.5% rate is applicable only in respect of office building as shown in the Schedule. The relevant Schedule at Appendix 1 under Rule 5 is required to be seen. So far as first clause regarding a building of selected material is concerned, 2.5% was the amount of depreciation at the relevant time. In the remarks column it is stated that "double these rates will be taken for factory building excluding office, godowns, officers' and employees' quarters". Therefore, the question whether double rates should be allowed or not is dependent on the finding whether the canteen can be said to be a part of the factory building or not.

(3.) Under the Industrial law, every industrial concern should provide a canteen; As a matter of fact, providing a canteen is a welfare measure. It is a matter of common knowledge that if the canteen is appertaining to the factory premises, workmen can rejoin their duties without delay. That apart, before the Karnataka High Court in the case of C.I.T. VS. MOTOR INDUSTRIES CO. LTD. reported in 158 ITR 734, the following question was referred for consideration: