Depreciation on temple building and statutory tax deduction upheld under precedent and retrospective section 43B amendment.

Depreciation is allowable on a temple building constructed within the assessee's premises when treated as a business asset, the text noting that existing precedent supports that position. It also states that outstanding sales tax, professional tax and municipal tax liabilities are deductible under the retrospective amendment reflected in Explanation 2 to section 43B, provided payment is made within the time permitted by the relevant State law or before filing the return under section 139(1). The commentary records that both points were resolved consistently with precedent in favour of the assessee.

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Issues: (i) Whether depreciation was allowable on the temple building constructed in the assessee's premises. (ii) Whether, in view of Explanation 2 to section 43B, outstanding liabilities towards sales tax, professional tax and municipal tax were allowable if paid by the statutory due dates under the relevant State laws or before filing the return under section 139(1).

Issue (i): Whether depreciation was allowable on the temple building constructed in the assessee's premises.

Analysis: The temple building was treated as a business asset for the purpose of depreciation. The issue was held to be covered by existing precedent, and no reason was found to depart from that view.

Conclusion: Depreciation on the temple building was allowable and the issue was answered in favour of the assessee.

Issue (ii): Whether outstanding statutory liabilities were allowable if paid by the statutory due dates under the relevant State laws or before filing the return under section 139(1) in view of Explanation 2 to section 43B.

Analysis: The question was treated as covered by precedent applying the retrospective amendment to section 43B, under which the relevant liabilities would be allowable where payment was made within the statutory time permitted by the applicable law or before filing the return.

Conclusion: The question was answered in the affirmative and in favour of the assessee.

Final Conclusion: Both referred questions were answered in favour of the assessee, and against the Revenue, with no order as to costs.

Ratio Decidendi: Where a binding precedent covers the issue, depreciation and statutory liability deduction must be allowed consistently with that precedent, including the operation of a retrospective amendment to section 43B.

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