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TMI Blog1984 (1) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... -1974. The controversy is regarding extra shift allowance (ESA) (Triple shift) on the latter 5 ton arc furnace, which worked for 89 days in the account year under consideration. The assessee in the statement filed with the original return had claimed ESA for triple shift at 100 per cent on both the arc furnaces, at Rs. 7,44,983 which was equal to 100 per cent of the normal depreciation of Rs. 7,44,983 which was claimed at the rate of 10 per cent on the plant and machinery of Rs. 74,49,831. The assessee, however, later filed a revised return claiming depreciation at the rate of 15 per cent on the cost of the said arc furnaces instead of 10 per cent depreciation claimed in the original return. The ITO discussed this matter in the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Rules, 1962 ('the Rules') and that same view had been taken by the Tribunal, Delhi Bench 'C' in Hindustan Kokoku Wire Ltd. in [IT Appeal No. 5296 (Delhi) of 1975-76 by order dated 29-9-1977 for the assessment year 1972-73 and this was affirmed by the Tribunal, Delhi, Special Bench in ITO v. J.K. Synthetics Ltd. [IT Appeal No. 630 (All.) of 1978-79, dated 13-8-1979 for the assessment year 1970-7l]--since reported in [1982] 1 SOT 415, 452. 4. The IAC (Assessment), however, passed order on 4-7-1982 under section 154 observing the triple shift allowance was to be allowed in proportion to the days (for which the plant actually worked triple shift) bore to the normal number of working days during the previous year and that the assessee-compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the 19th Meeting of DTAC held on 5-11-1966 (at page 121 of Taxmann's Direct Taxes Circulars, Vol. 1, 1980 edn.) where the Government had informed the committee that double or triple shift allowance should be granted only in respect of that machinery which had actually worked double or triple shift for a concern and not in respect of the entire machinery in the concern. This was to allay their fears that ESA (depreciation) was being denied on the ground that the word 'concern' appearing in the rules meant the whole concern in contradiction to any one shop or shops of the industrial concern. It was pointed out that for the purpose of ESA, it is not necessary that all the machinery in the concern should work extra shift but where some of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix I of the Depreciation Table as per the rules and the CBDT's letter dated 28-9-1970, it was clear that the ITO had rightly allowed ESA for the full year on the 5 ton arc furnace. The CBDT's letter dated28-9-1970reads as under : " Vol. XVI No.4 March, 1971, quarter of CBDT Bulletin 'Calculation of depreciation--Extra shift allowance in respect of Plant and Machinery : Reference is invited to CIT (Central)Calcutta's letter No. A/21233/CT/6A-102/1969-70, dated theFirst November, 1969, on the above subject. The Board have decided that where a concern has worked double shift or triple shift, extra shift allowance will be allowed in respect of the entire plant and machinery used by the concern without making any attempt to determine the numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... triple shift working shall be made separately in the proportion which the number of days for which the concern worked double shift or triple shift, as the case may be, bears to the normal number of working days during the previous year. For this purpose, the normal number of working days during the previous year shall be deemed to be (a) in the case of a seasonal factory or concern, the number of days on which the factory or concern actually worked during the previous year or 180 days, whichever is greater ; (b) in any other case, the number of days on which the factory or concern actually worked during the previous year or 240 days, whichever is greater. " It is clear from the reading of the above rule that ESA is to be allowed consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any asset which is used at any time, however, short during the accounting year. The said decisions, therefore, are not very relevant for considering the allowance of depreciation after 1970. In any event, the matter is highly debatable, more so in view of the aforesaid decisions of the Tribunal, Special Bench and the Tribunal, Delhi Bench. Under these circumstances, much cannot be made of the assessee restricting its claim of ESA in one of the charts filed with the revised return claiming ESA for 5 ton arc furnace for the number of days the said furnace was worked. The learned counsel for the assessee urged that the assessee had claimed ESA for the full years working and the said chart claiming ESA for the number of days the 5 ton furnace w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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