Extra shift depreciation for electric supply plant upheld, with overhead cables and wires allowed at 10% depreciation.

An electric supply undertaking remained entitled to extra shift depreciation allowance on its plant and machinery because the amended depreciation schedule under the Income-tax Rules, 1962 did not create a new disqualification for electric plant used as part of its composite undertaking. The restriction on extra shift allowance applied to specified electrical machinery, switchgear, transformers and similar items, but not to plant forming part of the undertaking's transmission, distribution and public lighting system. Reading the earlier and amended depreciation schemes together preserved the allowance for qualifying plant. On the same reasoning, overhead cables and wires qualified for depreciation at 10%.

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Issues: Entitlement of an electric supply undertaking to extra shift depreciation allowance on its plant and machinery, including whether overhead cables and wires qualified for depreciation at 10%.

Analysis: The assessee was an electric supply undertaking whose plant had been shown as transmission plant, distribution plant and public lighting under the electricity law framework. The amended depreciation schedule under the Income-tax Rules, 1962 did not introduce a new disqualification for electric plant used by such undertakings. The prohibition on extra shift allowance applied to specified electrical machinery, switchgear, transformers and similar items, but not to electric machinery forming part of an electric supply undertaking's composite plant. The earlier and amended depreciation schemes were read together to preserve the continuity of extra shift allowance for qualifying plant, and the same reasoning supported the allowance of depreciation at 10% on overhead cables and wires.

Conclusion: The assessee was entitled to extra shift depreciation allowance on its plant and machinery and to depreciation at 10% on its overhead cables and wires.

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