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Issues involved:
The judgment addresses the following Issues: 1. Classification of bins, racks, and shelves as "plant" or "furniture" for extra shift allowance. 2. Eligibility of radar equipment for extra shift allowance as wireless equipment. 3. Allowance of provision for accrued leave salary as a deduction for the assessment year. Issue 1: Classification of bins, racks, and shelves: The assessee claimed that bins, racks, and shelves were "plant" and thus eligible for extra shift allowance. The Income tax Officer disagreed, considering them as "furniture." The Commissioner of Income-tax (Appeals) initially sided with the assessee, directing the allowance of extra shift allowance. However, the Tribunal reversed this decision, deeming the items as furniture rather than plant, despite their use in the factory workshop for manufacturing goods. The Tribunal applied a specific provision for furniture depreciation, stating that even if the items could be considered "plant," the furniture description prevailed due to their passive role in storing components. The court referred to the "functional test" for determining "plant," emphasizing that items used in a business for permanent employment qualify as plant. Citing previous cases, the court highlighted that plant includes various items such as tools, electric fittings, and even wells. The court disagreed with the Tribunal's exclusion of bins, racks, and shelves from the definition of "plant," asserting that their role in the manufacturing process warranted classification as plant for depreciation purposes. Issue 2: Eligibility of radar equipment: The second issue revolved around the eligibility of radar equipment for extra shift allowance, with the Revenue arguing that radar, being wireless equipment, did not qualify. While the Commissioner of Income-tax (Appeals) initially allowed the extra shift allowance for radar, the Tribunal sided with the Income-tax Officer, denying the allowance based on radar's classification as wireless apparatus. The court concurred with the Tribunal's decision, citing the Oxford Illustrated Dictionary's definition of radar as wireless equipment, thus disqualifying it from extra shift allowance. Issue 3: Allowance of accrued leave salary deduction: Regarding the provision for accrued leave salary as a deduction for the assessment year, the Tribunal's decision aligns with a previous ruling in favor of the Revenue, as evidenced in CIT v. Hindustan Aeronautics Ltd. The court upheld the Tribunal's decision against the assessee, denying the deduction for accrued leave salary. In conclusion, the court ruled against the assessee on the first and third questions while supporting the Tribunal's decision on the second question, affirming the classification of bins, racks, and shelves as furniture, denying extra shift allowance for radar equipment, and disallowing the provision for accrued leave salary deduction.
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