1998 (10) TMI 34 - HC - Income Tax

Court allows extra shift allowance on storage tanks for assessee for AY 1983-84, citing Income-tax Rules.

The court ruled in favor of the assessee regarding the claim of extra shift allowance on storage tanks for the assessment year 1983-84. The court ... Income, Depreciation, Extra Shift Allowance Issues:1. Claim of extra shift allowance on storage tanks for the assessment year 1983-84.2. Consideration of collection towards the molasses storage fund under the Molasses Control Order.Analysis:Issue 1: Claim of extra shift allowance on storage tanksThe court addressed the casualness with which the Assessing Officer and the appellate authority handled the legitimate claim of the assessee for extra shift allowance. The claim was based on the provisions of the Income-tax Rules, 1962, specifically related to extra shift depreciation allowance for machinery and plant. The assessee, a sugar manufacturer, had erected storage tanks for molasses and claimed extra shift allowance for the assessment year 1983-84. The court highlighted that the depreciation table clearly allowed for extra shift allowance for storage tanks, except for those owned by mineral oil concerns. The Tribunal correctly acknowledged that the extra shift allowance was applicable to the storage tanks owned by the assessee, who was not a mineral oil concern. Despite the Tribunal's decision, the Revenue persisted in challenging the claim, leading to the court's ruling in favor of the assessee, emphasizing the admissibility of extra shift allowance for the molasses storage tanks owned by the assessee.Issue 2: Consideration of collection towards the molasses storage fundThe second question referred to the court by the Revenue involved the consideration of the collection towards the molasses storage fund under the Molasses Control Order. Citing a previous judgment, the court clarified that amounts required to be spent by the assessee for constructing molasses storage tanks under the Molasses Control Order did not vest with the assessee due to diversion by overriding title at source. The court ruled in favor of the assessee, stating that the collection towards the molasses storage fund could not be considered diverted at source by overriding title. Consequently, the court directed the Revenue to pay costs to the assessee amounting to Rs. 3,000.