1990 (4) TMI 92

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....29-6-1981, declaring loss of Rs. 2,10,893. Assessment was framed on 23-2-1984, u/s. 143(3), at 'nil' income. The assessee's claim for initial depreciation u/s 32(1)(iv) was disallowed by the ld IAC(A), with the following observations:--- " 4. The assessee-company claimed initial depreciation on canteen for low-paid employees u/s. 32(1)(iv) of the IT Act. The factors of this case are that the assessee-company is only lessor and has leased out the building, plant and machinery to M/s Bakeman Home Products. Therefore, the canteen being in the premises of the factory is essential for the use of M/s Bakeman Home Products and not the assessee's employees. Sec 32(1)(iv) allows initial depreciation on certain buildings which are used solely and ....

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.... behalf of the contesting parties have been heard and record carefully perused. The assessee owned a building, plant and machinery which was leased out to M/s Bakeman Home Product, on 31-8-1977 and during the relevant period, the lease was existing. The lessor, i.e. the assessee, was receiving lease money, i.e. premium, from the lessee M/s Bakeman Home Products and, no doubt, according to the revenue, such receipt was assessable under the head 'other sources' but the Tribunal ultimately held that such receipt was taxable under the head 'business'. The employees of the lessee required a canteen to be run from the premises. To this effect, understanding is seen to have taken place on 9-1-1979 between the assessee and the workers and the premi....