1983 (2) TMI 79

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..... ioner reviewed the record and came to hold the view that the air-conditioning machinery was not eligible for the extra shift allowance. He started proceedings u/s 263 of the Act, and asked the assessee to explain as to why the extra shift allowance on the air-conditioning machinery allowed by the ITO should not be withdrawn by an order u/s 263 of the Act to be passed by him. The assessee explained that the air-conditioning machinery was not separately used as such but was an integral part of the art silk manufacturing machine owned and operated by the assessee. It was explained that for better and more efficient performance, artificial silk weaving factories should be air-conditioned in order to maintain the temperature and humidity within .....

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..... se of increasing the strength of the yarn and avoiding the breakage of yarn do not remain ordinary electrical machinery but become "machinery use in the manufacture of goods". In other words, the humidifiers which were evidently electrical machinery ceased to be so because of their use in cotton textile factory. He then referred to the decision in the case of CIT vs. Electro-steel Castings Ltd. (1981 24 CTR (Ori) 81 : (1981) 130 ITR 25 (Ori) wherein it has been held that sanitary and water supply installations inside a factory do not come under the head "all hydraulic works, pipe lines and sluices". He also referred to the decision of the Calcutta High Court in the case of Indian Aluminium Co. Ltd. vs. CIT (1982) 29 CTR (Cal) 53 : (1983) 14 .....

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..... included under this head give a clue to their meaning. The latter is a room air-conditioner. In our opinion, air-conditioning machinery envisaged under (2) are those which are used as such for air-conditioning only. Once they are used in a factory manufacturing some other goods as one of its integral parts, then they can no longer be described as air-conditioning machinery pure and simple. We find enough support for this conclusion of ours from the authorities cited above. Since the air-conditioning machineries were installed in the artificial silk manufacturing company of the assessee, as a matter of commercial necessity, it has to be treated as a part of the machinery envisaged under (3). On going through the balance-sheet of the assessee .....

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