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TMI Blog2019 (8) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... al position will squarely apply to the facts of the present case. Tribunal rightly held that there was no such restriction in the Circular issued by the Board stating that the benefit would accrue to the assessee only if the residential accommodation is situated within the factory premises. Furthermore, the said Circular does not restrict the benefit only if the accommodation is provided to all the employees, which, obviously, is a business expediency and it is not for the AO to sit in the arm chair of the assessee to decide as what would be best for their employees. Deduction u/s 80HHC - Tribunal allowing deduction on the basis of book profits u/s 115JA and not on the basis of eligible profits under Section 80HHC as per normal computation - HELD THAT:- An identical question was considered by us in the case of CIT Vs. Sundaram Brake Linings [ 2018 (10) TMI 368 - MADRAS HIGH COURT] . In this decision, we referred to the decision rendered by us in the case of CIT Vs. Bannari Amman Sugars Limited [ 2018 (7) TMI 1845 - MADRAS HIGH COURT] the decision of the Hon'ble Supreme Court in the case of Ajanta Pharma Ltd. Vs. CIT [ 2010 (9) TMI 8 - SUPREME COURT] and the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red an appeal before the Commissioner of Income Tax (Appeals)-7, Chennai. However, the appeal was dismissed by order dated 29.8.2005. As against that, the assessee preferred further appeal before the Tribunal. After placing reliance on the circular issued by the Board dated 12.12.1996, the Tribunal held that the quarters built for the employees of the company must be regarded as being used for the business of the company and that the assessee was entitled to 10% depreciation. The Tribunal also held that when the assessment was on the basis of book profits, export incentives should also be calculated as a percentage of the same. The Revenue is on appeal before us challenging the said finding of the Tribunal and raising the aforementioned substantial questions of law. 6. It is the submission of Mrs.R.Hemalatha, learned Senior Standing Counsel for the Revenue that the Tribunal failed to take into consideration the fact that the assessee had not provided residential accommodation for all its employees, but provided only for five of such employees and that too, the residential accommodation is situated away from the business premises of the assessee, that therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir letter dt. the 29th Feb., 1964, that fans, airconditioners, refrigerators etc. provided by the employer at the residence of the employees should be considered to have been used wholly for the purpose of the employer's business and full depreciation as may be admissible in accordance with the rules, should be allowed in the assessment of the employer. Where such assets have been installed on or before the 31st March, 1965, development rebate may also be allowed in respect of these assets, if the rebate is otherwise admissible. 9. On a reading of the said Circular, it is seen that there is a reference to the earlier Circular/Instructions dated 21.3.1960, in which, it was clarified that the quarters built by the employers for the accommodation of their employees must be regarded as buildings used for the purpose of the business and depreciation allowed thereon where the occupation by the employee of the property owned by the employer is subservient to and necessary for the purpose of their duties. After referring to the Circular dated 21.3.1960, the Board reconsidered the matter and in super session of the Instructions in their letter dated 29.2.1964, it ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the owner or in other words, it was the business asset of the owner. The above legal position will squarely apply to the facts of the present case. 12. We have gone through the reasons assigned by the Tribunal and we find that the Tribunal rightly held that there was no such restriction in the Circular issued by the Board stating that the benefit would accrue to the assessee only if the residential accommodation is situated within the factory premises. Furthermore, the said Circular does not restrict the benefit only if the accommodation is provided to all the employees, which, obviously, is a business expediency and it is not for the Assessing Officer to sit in the arm chair of the assessee to decide as what would be best for their employees. Thus, the first substantial question of law is required to be answered against the Revenue and it is accordingly answered against the Revenue. 13. With regard to the second substantial question of law i.e. whether the Tribunal was right in allowing deduction under Section 80HHC of the Act on the basis of book profits under Section 115JA of the Act and not on the basis of eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.? 14. An identical question was considered by us in the case of CIT Vs. Sundaram Brake Linings [TCA.Nos.1351 to 1353 of 2008 dated 11.9.2018]. In this decision, we referred to the decision rendered by us in the case of CIT Vs. Bannari Amman Sugars Limited [TCA.No.163 of 2009 dated 30.7.2018], the decision of the Hon'ble Supreme Court in the case of Ajanta Pharma Ltd. Vs. CIT [reported in (2010) 327 ITR 305] and the decision of the Hon'ble Supreme Court in the case of Bhari Information Technology Systems Private Limited and answered the question against the Revenue. We also noted the decision of the Division Bench in the case of CIT Vs. M/s.Three Bags India Private Limited [reported in 2016 SCC Online Madras 27408]. 15. In the light of the above legal position having been settled on the above lines, the second substantial question of law is also required to be answered against the Revenue and is accordingly answered against the Revenue. 16. In the result, the above tax case appeal is dismissed and the substantial questions of law are answered against the Revenue. No costs. - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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