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TMI Blog2018 (5) TMI 1948X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High Court in the case of CIT vs. Modi Industries Ltd. [1994 (4) TMI 61 - DELHI HIGH COURT] and the CBDT Circular where it was held 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. It is considered that what applies to buildings applies also to the fans, air-conditioners and refrigerators fitted to those buildings, as those are amenities which virtually part of such buildings. The issue is decided in favour of the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... -, on account of disallowance of depreciation and added it to the total income of the assessee. Thereafter, the total income of the assessee was arrived at a loss of ₹ 14,82,866/-. 4. Against the above order, the assessee appealed before the ld. Commissioner of Income Tax (Appeals). The ld. Commissioner of Income Tax (Appeals) noted the submissions of the ld. Counsel of the assessee as under: 6.1 During the course of appellate proceedings the AR submitted that the appellant is engaged in business of share trading activities and the two directors of the company are shareholders of the company are Mr. Anil Bagri and Ms. Archana Bagri having share holding in the ratio of 95.47% and 4.53% respectively. Mr. Anil Bagri is the director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by an employee was held eligible for depreciation for the purpose of carrying on of business. 6.4 He further relied upon the ITAT Kolkata bench in case of Arjun Associates P Ltd., in which it has been held that once the assets is part of Block of Assets, used by Directors for residence and kept as business asset of the Company, depreciation cannot be disallowed. 6.5 In the appellant's case, the Director is the employee of the company. It uses the flat for trading and operation activities of the company. Stock Market opens at 9am every morning. The entire business of the company is trading in shares. Thus in view of the aforesaid circular and decisions, the A.O. erred in disallowing depreciation and the same be allowed. 5. Consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rebate on assets provided at the residence of employees.- "Attention is invited to the Board's letter No. F. 10/97/63-lT (Al) dated the 29th February, 1964, addressed to the Commissioner of Income-tax in which instructions were issued, inter alia, that development rebate should not be allowed on air-conditioners and fans given by an employer for the personal use of the employees or directors at their residence, on the ground that the said plant and machinery were not wholly used for the purpose of the assessee's business. 2. The question has been re-examined by the Board recently in the light of Board's letter F. No. 9/26/IT/60, dated the 21st March, 1960, in which it was clarified that quarters built by the employers fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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