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TMI Blog1984 (8) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for double shift working and @ 50 per cent of the normal depreciation for triple shift working. It was submitted before the ITO that the calculation for extra shift allowance for depreciation have to be made on the basis of the concern working double or triple shifts and not the number of days machinery had worked double or triple shifts. According to him, therefore, the machinery had during the year qualified for depreciation in proportion to normal depreciation based on the concern working for double or triple shifts. He further contended that the illustration given in the rule further affirms his aforesaid contention. It was also submitted before the ITO on the behalf of the assessee that depreciation was not actually expenditure bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtionate to the number of days the extra shift worked. The appeal of the assessee on this point was, therefore, allowed. The Revenue is aggrieved by the above order of the ld. AAC. 4. Mr. M. P. Singh, ld. departmental representative, has contended that the interpretation placed by the ld. AAC is totally contrary to the Schedule of depreciation given in the IT Rules, which lays down a separate procedure for extra shift allowance. He pointed out that a reference to the said schedule will reveal that certain items of machinery have been specifically excluded from extra shift allowance by the words 'NESA' (not entitled to extra shift allowance), which clearly shows that the extra shift allowance has to be computed with reference to each item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Anantapur Textiles Ltd. vs. CIT (1979) 116 ITR 851 (Cal) as well as Allahabad High Court decision in the case of Dhampur Sugar Mills Ltd. vs. CIT (1980) 126 ITR 648 (All) (FB). He also pointed out that there was not ruling of any High Court to the contrary and, therefore, keeping in view the decision of the Bombay High Court in the case of CIT vs. Smt. Godavari Devi Saraf (1978) 113 ITR 589 (Bom), the order of the ld. AAC deserves to be reversed. 5. Mr. D. S. Gupta, ld. counsel for the assessee, on the other hand, has pointed out that the decision in the Punjab and Haryana High Court, relied upon by the assessee, is with reference to the depreciation schedule prior to its amendment in the year 1970 as the assessment year involved be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be denied by differently interpreting the provisions to the detriment of the assessee. He also pointed out that before amendment in 1970, no normal depreciation or extra shift depreciation allowance was admissible, if the concern did not work upto 30 days, but under the amended schedule, this condition was done away with and depreciation was admissible, even if the concern had worked for a single day. It was, therefore, urged that if the rules provided normal depreciation for the whole year, irrespective of its user for the whole year, are was no reason as to why such a treatment could not be given to the extra shift allowance. He, therefore, supported the order of the ld. AAC. 6. The ld. departmental representative in rebuttal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '. If the Board's Circular is considered as such, then extra shift allowance will be admissible even on machineries which are not entitled to extra shift allowance, even though such machineries might have been working in extra shifts. Such machineries have necessarily to be excluded while working out extra shift allowance. Similarly, those machineries which do not work for the requisite numbers of days to be entitled to full extra shift to full extra allowance, have to be allowed depreciation proportionate to the number of days such machineries have worked. Another aspect of it will be where only one machinery has worked in extra shift for the required number of days so as to qualify for full extra shift allowance, the rest of the machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or plant which has been specifically excepted by the inscription of the letters 'NESA'. The result is that the ITO is required to apply his mind to examine which machinery owned by the assessee has been used by him in extra shifts. So long as the particular machinery has worked in extra shifts, in the relevant year, for the specified period, it would be eligible for the extra shift allowance on the basis of the number of days, provided NESA does not apply to it. If the assessee's contention were to be accepted, then if a small item of machinery in the corner of a huge factory has worked extra shifts, then the entire factory would be eligible for the extra shift allowance for all items of machinery, whether they worked or not. Such a propo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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