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TMI Blog1984 (6) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the acquisition of certain fixed assets, the balance which could not be related to specific items, was allocated among all the assets in proportion to their direct cost and depreciation and development rebate claimed and allowed originally on the basis of the cost determined in the above manner for the assessment years 1963-64, 1964-65 and 1965-66. Later, however, the ITO felt that expenses aggregating to Rs. 1,01,654 could not be viewed as constitutive elements of the actual cost of the depreciable assets. He, therefore, initiated reassessment proceedings for the said assessment years to recompute the allowance by way of depreciation and development rebate. The, ITO calculated the allowance on the basis of the figures of actual cost, from which the portions added on account of indirect expenditure were eliminated. The assessments for the years, namely, 1963-64 to 1968-69, were taken on appeal by the assessee before the AAC. In those appeals, the common contention put forward by the assessee related to the non-capitalisation of Rs. 1,01,654 and the consequent disallowance of depreciation and development rebate. The assessee also objected to the legality of the reassessment p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et extra-shift allowance on electrical machinery is a debatable point and in such cases, the revocation under s. 154 of the I.T. Act cannot be resorted to. The Tribunal has chosen to accept the said contention of the assessee and has held that though the order of the AAC is silent on the relief claimed by the assessee for extra-shift allowance, the order of the AAC having been understood by the ITO, as granting such relief, the only remedy open to the Revenue is to go on appeal before the Tribunal. The Tribunal has also proceeded on the basis that at the time of the hearing of the appeals before the AAC against the reassessment orders passed under s. 147 of the Act, the ITO, in the light of the arguments put forward before the AAC, might have conceded that the extra-shift allowance has to be granted in respect of electrical machinery, and, therefore, the order of the ITO granting relief by way of extra-shift allowance cannot be taken to be mistake. The Tribunal, however, has not gone into the question as to whether the extra-shift allowance is available to the assessee in respect of the electrical machinery as claimed by him and whether the revocation order could be sustained on me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rant of extra-shift allowance by the ITO on March 12, 1970, is independent of the order of the AAC, there is no question of excluding the scope of s. 154. It is only in cases where particular item is dealt with by the AAC in an appeal, the ITO cannot deal with that item by invoking s. 154 of the I.T. Act. In this case we have to proceed on the basis that the ITO proceeded to grant relief by way of extra-shift allowance to the assessee independent of the order of the AAC. If that be so, the further question is whether the order of the ITO dated March 12, 1970, could be rectified under s. 154 of the I.T. Act. According to the learned counsel for the assessee, the consequential orders dated March 12,1970, passed by the ITO, on the face of them, indicate that the extra-shift allowance has in fact been given and it is only by looking into the earlier orders and the working sheets prepared by the ITO, it will be known that the extra-shift allowance has been given as part of the order passed by the ITO. Based on this fact, the contention put forward by the learned counsel for the assessee is that the mistake is not apparent in the consequential order passed by the ITO and, therefore, s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 ...... The extra-shift allowance shall not be allowed in respect of any item of machinery or plant which has been specifically excepted by inscription of the letters 'N.E.S.A.' (meaning 'No Extra Shift Allowance') against it in sub-item (ii) above and also in respect of the following items of machinery and plant to which the general rate of depreciation of 10 per cent. applies." Thus in respect of electrical machinery, such as switchgear and instruments, transformers, and other stationary plant and wiring and fittings of electric light and fan installations, no extra-shift allowance can be claimed as per the provisions of the annexure. It cannot be disputed that in this case, the extra-shift allowance has been claimed by the assessee on i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectrical machinery. For determining the rate of depreciation, the nature of the machinery would have to be examined to determine the category in which the machinery fell and there was no debatable issue and the admitted fact is that the assessee produced aerated water and not aerated gas and, therefore, he was entitled to depreciation only at 7% and not at 9% and the matter was not one which was likely to involve any debate at all as the relevant details of the machinery would be on record. The principle laid down in that case clearly applies to the facts of this case. For, in this case, there is no dispute that the assessee has claimed depreciation on electrical machinery and there is no dispute on that aspect. The only question is whether on such machinery the assessee is entitled to claim the (extra-shift) depreciation allowance. That question can be solved by having a straight look into the relevant statutory provision. As already stated, Appendix I to the I.T. Rules clearly contains the provision that items like electrical machinery are not eligible for extra-shift allowance. Therefore, there is no debatable question at all involved., It is not the assessee's case that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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