Depreciation on temple within factory premises allowed where the asset had direct business nexus and supported staff welfare.

Depreciation may be allowable on a temple constructed within factory premises where the asset has a direct nexus with the assessee's business and serves staff welfare. The text notes that disallowance on the basis that the temple was a non-factory building was reversed because its use was connected with business activity. The Tribunal's view was affirmed, and the referred question was answered in favour of the assessee, treating the temple as an asset used for the purposes of the business.

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Issues: Whether depreciation was allowable on a temple constructed within the factory premises as an asset connected with the assessee's business.

Analysis: The assessment year in question involved a claim for depreciation on a temple built inside the factory premises. The disallowance made on the ground that the temple was a non-factory building was reversed in appeal on the finding that it served the welfare of the staff and had a direct link with the business activities of the assessee. The Tribunal affirmed that view, and the question referred was held to be covered by the earlier binding decision relied upon by the parties.

Conclusion: Depreciation on the temple was allowable, and the question was answered in the affirmative, in favour of the assessee and against the Revenue.

Ratio Decidendi: An asset constructed within the factory premises and found to have a direct nexus with the business, including staff welfare, may qualify for depreciation as being used for the purposes of the business.

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