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Issues:
1. Depreciation allowance for double shift operation of plant and machinery. 2. Deduction of extra price payable for sugarcane purchase under the Income-tax Act. Analysis: 1. Depreciation allowance for double shift operation of plant and machinery: The High Court was tasked with determining whether the assessee-company was entitled to 50% of the normal depreciation on plant and machinery for double shift operation for the entire year or proportionately for the actual days worked. The court noted that the sugar mills in question operated double shifts only for certain days. The Income-tax Officer allowed extra shift allowance proportionately for the actual days worked. However, the Appellate Assistant Commissioner deemed the mills as seasonal and allowed the claim for the full year. Upon appeal, the Tribunal reversed the decision, relying on the case law of Raza Sugar Co. Ltd. v. Commissioner of Income-tax. The High Court concurred with the Tribunal, holding that the assessee was entitled to 50% of normal depreciation proportionately for the actual days worked, not for the entire year. Therefore, the court ruled in favor of the department and against the assessee on this issue. 2. Deduction of extra price payable for sugarcane purchase: The second issue involved the deduction of extra price payable for sugarcane purchase by the assessee for the assessment year 1961-62. The Income-tax Officer disallowed the claim, considering it a provision for an anticipated liability not yet ascertained. The Appellate Assistant Commissioner overturned this decision, allowing the deduction. However, the Tribunal restored the Income-tax Officer's order. The High Court analyzed the Sugarcane (Control) Order, specifically clause 3A, which outlined the additional price payable for sugarcane purchased. The court emphasized that the liability was created by the order, with provisions for quantification and payment. The liability was not contingent on any other factor and was capable of ascertainment with reference to the order. Citing relevant case law, the court held that the liability was not uncertain or contingent but a liability in praesenti, though payable in the future. Consequently, the High Court ruled in favor of the assessee and against the department on this issue, allowing the deduction of the extra price payable for sugarcane purchase.
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