TMI Blog1981 (9) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... rame the question and answer the real controversy between the parties. But before doing so, it is necessary to set out the facts. The reference arises out of the assessment of the New Bank of India Ltd for the assessment year 1956-57, in respect of which the relevant previous year was the calendar year 1955. During this year of account, the assessee sold premises No. 25, Pusa Road, New Delhi, which it owned, for a sum of Rs. 82,300 after deduction of brokerage. The assessee claimed that the loss of Rs. 67,969, incurred as a result of the sale, was allowable under s. 10(2)(vii) of the 1922 Act. This claim was disallowed by the ITO, allowed on appeal by the AAC but disallowed again by the Income-tax Appellate Tribunal and hence this referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten down value of the property exceeds the amount for which the building is sold. " Written down value " is defined in s. 10(5) as meaning, in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to the assessee under the Act. It is seen from the assessment order that the cost of the building to the assessee was Rs. 1,66,394. Subsequently, the assessee claimed some depreciation in respect of this property. It is also seen from the assessment order that the written down value of the property as per the assessment order for 1951-52 was Rs. 1,50,269. It is on the basis of this written down value adjusted against the sale proceeds of Rs. 82,300 that the loss of Rs. 67,969 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee that much stress has been laid by the Department. But what we have already stated will clearly show that it is not only the assessee's conduct that has been inconsistent, the Department has also assessed it in two different ways, for certain years it has been assessed under the head " Business " and for the following years under s. 9 as " Income from house property ". In this state of uncertain mind of the assessee as well as the I.T. Dept., no reliance can be placed and much importance cannot be attached to the actual mode of assessment in the earlier years. This aspect, on which much stress has been laid by the ITO and the Tribunal, does not appear to us to be really conclusive. The material question that arises is whether a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee was that of manufacture and sale of agricultural implements and it was manifest on the facts that the letting out of the residential quarters was subservient to and incidental to the main business of the company. In this case, it appears that the quarters were constructed pursuant to a certain industrial adjudication and the employees were also occupying the premises not as tenants but as licensees. However, the basic principle of the decision is that though the company might not be actually occupying the premises itself, but using it only to house its employees, the provision of such residential accommodation is necessary as a matter of commercial expediency and that, therefore, the letting out of the accommodation to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in a welfare State, it is the duty of the employer to provide residential accommodation to the employees and, therefore, the allotment of houses to the employees was not because the company was trying to earn, or engage in the business of earning rental income from the employees but was in order that the employees may carry on the business of the company more efficiently. The housing accommodation is an amenity which is provided for the purposes of the business of the company and not de hors that business. Discussing the meaning of the expression " occupied for the purpose of business ", used in s. 9 of the 1922 Act, the court pointed out that the word " occupied " should be given a broader meaning and not a very restricted meaning and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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