9911796707
TMI Blog1984 (12) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... levant to the assessment year under appeal, the assessee-company set up a new industrial undertaking adjoining the existing one at Kansabahal. This new industrial undertaking has a foundry unit, which commenced manufacturing operation from 1-7-1977. The assessee-company claimed relief under section 80J of the Income-tax Act, 1961 (' the Act ') in respect of its new industrial undertaking and was given relief under section 80J. It may further be mentioned that the new foundry is housed in a new factory and it worked only for 77 days towards the close of the year after it was set up. It has got a separate and distinct entity from the old existing factory and its machineries and method of working are different from those of the old one. 8. Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,25,460. 9. The Commissioner (Appeals) allowed the assessee's claim in the following manner : " With effect from 1-1-1977, the company began to operate a new foundry unit at its Kansabahal works. The present accounting period ended on 30-9-1977. Therefore, the IAC calculated ESA (Extra Shift Allowance] on the new unit machinery separately from that in the rest of the factory and allowed the same for 77 days only as against the full year for the rest. The assessee objects to that calculation. He says that ESA is allowable for the ' concern ' as a whole and that, therefore, he was entitled to it for the entire concern for the whole year, including the new foundry unit, which was only a part of the said concern. In support of his stand, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horised representative for the assessee, on the other hand, supported the order of the Commissioner (Appeals) and laid emphasis on the use of the word ' concern ' occurring in Part I of Appendix I of the Income-tax Rules, 1962 (' the Rules '), in clause (iv), relating to extra shift depreciation allowance under the head ' Machinery and plant '. It was urged that while allowing extra shift allowance, the entire concern of the assessee has to be taken into account and the claim for extra shift allowance is not to be considered separately in respect of each unit, machinery or plant. In support of this contention, reliance was placed on the decision of the Tribunal, Madras Bench, in the case of ITO v. Sri Varadaraja Textiles (P.) Ltd. [1984] 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e previous year shall be deemed to be--- " The word ' concern ' as used in clause (iv) cannot be interpreted to mean the assessee's entire undertakings including the newly established undertakings in respect of which extra shift allowance has been claimed. The word ' concern ' as used in clause (iv), in our opinion, means a separate and distinct unit or undertaking. The assessee may own and run several factories, units and undertakings. All of them cannot be considered together as one concern for the purpose of allowing extra shift depreciation allowance. For the purpose of clause (iv), each unit or factory owned by the assessee has to be considered as a concern. The Madras High Court in South India Viscose Ltd.'s case has held that the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft or triple shift, extra shift allowance will be allowed in respect of the entire plant and machinery used by the concern without making any attempt to determine the number of days on which each machine actually worked double or triple shift during the relevant previous year '." On the basis of the aforesaid circular, it was held by the Tribunal in that case that the assessment made by the ITO is contrary to the instructions of the CBDT. This decision of the Tribunal is of no help to the assessee. In the instant case, the IAC has not attempted to determine the number of days on which each machinery, comprised in the new foundry unit, actually worked triple shift during the relevant previous year. He has considered the entire new undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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