9911796707
TMI Blog1996 (11) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case, the Appellate Tribunal was correct in law in cancelling the Commissioner of Income-tax's order under section 263 of the Income-tax Act, 1961, for the assessment year 1977-78 ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the assessee was entitled to extra depreciation allowance and also extra shift depreciation allowance on the reasoning that there was no prohibition for granting both the allowance either in the Income-tax Rules or in the Act ? " The High Court has answered the second question against the assessee and in favour of the Revenue following the judgment of that court in S. P. Jaiswal Estates Private Limited v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion Bench has taken a contrary view. The latter Division Bench has held that even a hotel is entitled to extra shift allowance. The rates of depreciation are provided in Appendix-I to the Income-tax Rules. Whether it is prior to April 1, 1970, or thereafter, depreciation is allowed on "machinery and plant", mentioned as item III in the Appendix. Prior to April 1, 1970, the rate of depreciation on machinery and plant was 7 per cent. But in the case of a concern working double shift, an additional 50 per cent. of the said rate of depreciation was allowed. Similarly in the case of triple shift, another 50 per cent. of the said rate was allowed. In other words, in the case of a concern working for three shifts, the rate of depreciation allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ift working and establishes that it has worked triple shift. " The contention of the Revenue is that an approved hotel---(the appellant is admittedly running an approved hotel)---is entitled only to the depreciation allowance provided by sub-item (iii) and not to the extra shift depreciation allowance provided by sub-item (iv). The contention is that an approved hotel is not entitled to both the said allowances simultaneously and that it is entitled only to the extra depreciation allowance in sub-item (iii) but not to extra shift allowance in sub-item (iv). It is not possible to agree. The depreciation is allowed on machinery and plant and not with reference to the nature or character of the activity carried on in the premises where the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided for "approved hotels" only. It does not, however, mean that an approved hotel, to which the depreciation provided in sub-item (iii) is allowed, is deprived of the depreciation provided in sub-item (iv). If the argument of the Revenue is accepted, a strange consequence would follow : a hotel which is not approved may get extra shift depreciation allowance (for three shifts) under sub-item (iv) while an approved hotel will get only the depreciation provided by sub-item (iii), which would be less than the depreciation allowance provided by sub-item (iv). We are, therefore, of the opinion that plant and/or machinery installed in a hotel is entitled to extra shift depreciation allowance provided by sub-item (iv) of item III in Appendix--I a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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