Business expenditure and depreciation claims upheld where prior precedent covered dairy machinery, extra shift allowance, and foreign exchange fluctuation.

The High Court followed binding precedent in the assessee's own case and an applicable Supreme Court decision to hold that expenditure on the dairy machinery unit was deductible as business expenditure. It also treated extra shift allowance as allowable in depreciation for the water system, sanitation and technical documentation, and held that depreciation was admissible on additional capitalised expenditure arising from foreign exchange fluctuation. All referred questions were answered in favour of the assessee, granting full relief on the income-tax issues considered.

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Issues: (i) Whether the expenditure incurred in respect of the dairy machinery unit was deductible as business expenditure; (ii) whether extra shift allowance was allowable in computing depreciation for the water system and sanitation and technical documentation; (iii) whether depreciation was allowable on extra expenditure capitalised on account of fluctuation in foreign exchange rate.

Issue (i): Whether the expenditure incurred in respect of the dairy machinery unit was deductible as business expenditure.

Analysis: The issue was resolved by following the earlier decision in the assessee's own case, under which the expenditure was treated as laid out for the purposes of business and therefore deductible.

Conclusion: The issue was answered in the affirmative and in favour of the assessee.

Issue (ii): Whether extra shift allowance was allowable in computing depreciation for the water system and sanitation and technical documentation.

Analysis: The allowance for water system and sanitation was treated as covered by the prior decision on depreciation, and the claim relating to technical documentation was treated as covered by the Supreme Court decision recognising such documentation for depreciation purposes.

Conclusion: The issue was answered in the affirmative and in favour of the assessee.

Issue (iii): Whether depreciation was allowable on extra expenditure capitalised on account of fluctuation in foreign exchange rate.

Analysis: The issue was governed by the earlier decision in the assessee's own case, which accepted depreciation on the capitalised foreign exchange fluctuation expenditure.

Conclusion: The issue was answered in the affirmative and in favour of the assessee.

Final Conclusion: All referred questions were decided for the assessee, resulting in full relief on the income-tax issues considered.

Ratio Decidendi: Where a claim is already covered by binding precedent in the assessee's own case or by an applicable Supreme Court decision, the same view must be followed for answering the reference on deductibility and depreciation.

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