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TMI Blog1989 (8) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... shift depreciation allowance to the assessee while framing the assessments for assessment years 1982-83 1983-84. The Commissioner of Income-tax initiated action under sec. 263 as in his opinion, the grant of extra shift allowance to the assessee was erroneous. Ultimately after hearing the assessee the Commissioner passed separate orders dated2-3-1987directing, the ITO to withdraw the Extra Shift Allowance granted to the assessee. 4. For assessment year 1984-85 the ITO did not grant extra shift allowance to the assessee, as the assessee was not a concern that worked extra shift. This view has been upheld by the CIT(A), before whom the assessee had preferred an appeal. The assessee is now in appeal before us against the order of the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sees for their business, the same can also be said to be used for the assessee's business of leasing. The plant machinery is admittedly owned by the assessee. But for the purposes of grant of extra shift depreciation allowance the rules contained in the depreciation table have used a different phraseology. Extra shift depreciation allowance is to be allowed where a 'concern' claims such allowance on account of double shift working and establishes that it has worked double shift. The approach of the authorities below has been that extra shift depreciation allowance cannot be allowed to the assessee, as it is not a concern that has worked double shift or triple shift and the fact that the lessees might have used the plant machinery was ir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, cannot be ignored and that under the Rules it is only a concern that actually uses the machinery that has been permitted to claim extra shift depreciation allowance and that the legislative intent is clear from the said Rules which are approved by the Parliament. 9. We have mentioned above that in the depreciation table the word 'assessee' has not been used and in its place the word used is 'concern' and the extra shift depreciation allowance is allowable to a concern that claims such allowance and establishes that it has worked double or triple shift. The reference is to the working of the concern and not to the working of the machinery as such. In sec. 32 the emphasis is on the ownership of plant machinery by the assessee and its u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in the depreciation table in Appendix I of the Income-tax Rules, extra shift depreciation allowance was not admissible to the assessee even though the machinery might have been used by the lessee for more than one shift. Though it is true that depreciation whether normal or extra shift must depend on the extent of user of the machinery, but it is extremely difficult to measure the extent of user and that is why different types of provisions have been made under sec. 32. As stated above, normal depreciation is allowable even if the asset is used for an insignificant period in the accounting year. On the other hand, under the depreciation table extra shift allowance is allowable only in proportion to the period for which the concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arate clauses cannot be gained. These observations provide proper guidance in the interpretation of the provisions of the statutory law and rules framed thereunder and, as observed above, the provisions of the Act coupled with the Income-tax Rules indicate that the legislative intent is that extra shift allowance would be admissible only to a concern that is actually using the machinery. The same would, of course, be subject to the condition that the concern should be the owner of the asset. It has to be remembered that under Rule 5AA of the Income-tax Rules, 1962, an assessee has to give details of the manner in which the depreciation allowance has to be calculated. And in the case of extra shift allowance it is only the concern that is ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that are using the machinery are not concerns making the claim or extra shift depreciation allowance before the ITO. Therefore, the mere ownership of the asset will not entitle the assessee to claim extra shift depreciation allowance in spite of the fact that it is entitled to normal depreciation under sec. 32 in respect of the machinery owned by it and used by others in the assessee's business of leasing. We, therefore, agree with the view taken by the authorities below that the assessee is not entitled to extra shift depreciation allowance. 11. The authorities below have not considered whether the various items of machinery claimed to be owned by the assessee and having been used extra shift by the lessees are such in respect of which e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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