1997 (7) TMI 45 - HC - Income Tax

Summary

Issues:
Interpretation of provisions for extra-shift depreciation allowance under section 80J for a specific industrial undertaking.

Analysis:
The case involved a dispute regarding the claim for extra-shift depreciation allowance by the assessee for a Barium Carbonate (Expansion) Plant, treated as a separate industrial undertaking for deduction under section 80J. The assessing authority limited the claim to 43 days due to the plant's limited operation during the year. The first appellate authority and the Tribunal rejected the claim. A previous judgment remanded the matter to the Tribunal to consider the claim in light of specific circulars and instructions. The Tribunal, in its subsequent order, allowed the full extra-shift depreciation allowance, considering all operations as one concern. However, the Revenue argued that extra-shift allowance should be regulated for each factory separately, especially when a concern has multiple factories.

The assessee contended that each factory had claimed extra-shift allowance separately, and the Barium Carbonate Plant was part of a larger factory, not a new plant. The argument emphasized that a plant or machinery does not constitute a factory, and one factory can have multiple plants. The court noted that the Tribunal did not provide necessary factual findings to assess the claim under the relevant circular and instructions. It highlighted the need to determine if the assessee had multiple factories, if extra-shift allowance was claimed for each factory, and whether the Barium Carbonate Plant was an independent factory or part of a larger one.

The court declined to answer the question referred, instructing the Tribunal to reconsider the matter in light of the observations provided in the judgment. The decision emphasized the importance of correctly applying the provisions of the circular and instructions to determine the eligibility for extra-shift depreciation allowance based on the specific industrial undertakings and their operational status.