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TMI Blog1990 (10) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... ll. For the assessment years 1967-68, 1968-69 and 1969-70, it claimed extra shift allowance on its machines. It claimed that this allowance ought to be allowed with reference to the number of days the concern worked extra shift and not with reference to the exact number of days on which the machines had worked extra shift. The Income-tax Officer did not agree. He calculated the extra shift allowance on the machines purchased during the year under consideration on the basis of the number of days these machines had really worked extra shift. The machines which the assessee owned at the beginning of the previous years were presumed to have worked extra shift for the whole year and extra shift allowance was allowed accordingly, but so far as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble for any assessment year commencing on or after the first day of April, 1964, where a concern proves that it has worked triple shift. The calculations of the extra allowance for double shift working and for 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 throughout the previous year. For this purpose, the normal number of working days throughout the previous year shall be taken as 300, and if, for example, a concern has worked only double shift for 100 days and triple shift for another hundred days, the extra allowance for double shift shall be one-third of 50 per cent of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference to the actual number of days on which the extra shifts worked and not at 100 per cent. of the normal depreciation allowance for the relevant previous year ?" The question referred to the Full Bench may also be noticed. It reads thus (at page 649) : "Whether, having regard to rule 5 read with entry III of Appendix 1, Part 1, of the Income-tax Rules, 1962, as applicable in the assessment year 1964-65, depreciation allowance for multiple shift working has to be allowed in proportion to the number of days on which the machinery or plant was used or an amount equal to the full allowance of normal depreciation ?" After a full consideration of the matter, the Full Bench answered the question referred to it in the following words (at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxes. Learned counsel says that, under section 119 of the Act, the circular issued by the Central Board of Direct Taxes are binding on all income-tax authorities, which proposition has been repeatedly affirmed by the Supreme Court. He submits that, even if the provision of such a circular is at variance with the interpretation placed upon a particular provision by the courts, the income-tax authorities are bound to follow the circular in preference to the decision of the courts. He places reliance upon the decision of the Supreme Court in K. P. Varghese case [1981] 131 ITR 597. The circular relied upon by Shri Upadhyaya reads thus: "....the Board have decided that where a concern has worked double shift or triple shift, extra shift allow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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