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Classification of generator as 'electrical machinery' for extra-shift allowance. Analysis: The case involved determining whether a generator installed in the assessee's factory should be classified as 'electrical machinery' to qualify for extra-shift allowance. The Appellate Tribunal held that the generator should be considered as plant and machinery, not 'electrical machinery,' thus disallowing the extra-shift allowance claim. The Revenue contended that only specific types of electrical machinery were ineligible for the allowance, while the generator in question was not operated with electricity. The Court referred to previous decisions to interpret the term 'electrical machinery.' In the case of CIT v. M. S. Sahadevan, it was clarified that machinery with an inbuilt electric motor forming a vital part qualifies as electrical machinery. The Court also cited the case of CIT v. Light Roofings Ltd., which reiterated the requirement of an inbuilt electric motor for machinery to be classified as electrical. The decisions highlighted that the mere presence of electrical devices within machinery does not make it electrical machinery; the electric motor must be integral to the unit. The Court, based on these precedents, concluded that the generator in question did not meet the criteria to be classified as 'electrical machinery,' affirming the Tribunal's decision to disallow the extra-shift allowance claim. Consequently, the Court ruled in favor of the assessee, denying the Revenue's appeal and upholding the Tribunal's decision. The judgment clarified the distinction between machinery powered by electricity and 'electrical machinery,' emphasizing the requirement of an inbuilt electric motor as a defining factor. This case underscores the importance of interpreting statutory terms like 'electrical machinery' in line with established legal precedents. The Court's reliance on previous decisions provided a clear framework for determining the classification of machinery for tax purposes. By emphasizing the necessity of an inbuilt electric motor as a key criterion, the judgment established a consistent standard for identifying 'electrical machinery.' The Court's thorough analysis of relevant case law and the Central Board of Revenue's circular ensured a comprehensive evaluation of the issue at hand. The decision not only resolved the specific dispute regarding the generator but also provided guidance for future cases involving similar classification challenges. Overall, the judgment exemplified the significance of legal precedent and statutory interpretation in adjudicating complex tax matters, ensuring clarity and consistency in decision-making.
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