Extra shift allowance must be computed machinery-wise and only for actual extra shift use, not on a concern basis.

Extra shift allowance under the depreciation schedule had to be computed machinery-wise, not on a concern-wide basis. The schedule created a separate regime for extra shift benefit and expressly excluded certain machinery as NESA, so the allowance applied only to eligible machines that actually worked extra shifts. A Board circular could not be read as granting a blanket allowance for the whole year irrespective of each machine's eligibility or period of extra shift use, because that would nullify the NESA exclusions and produce an anomalous result. The view in South India Viscose Ltd. was adopted as correctly stating the law.

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Issues: Whether extra shift allowance under the depreciation schedule was to be computed on the basis of the concern as a whole or with reference to each item of machinery and the actual number of days on which such machinery worked extra shifts.

Analysis: The depreciation schedule contained a separate scheme for extra shift allowance and specifically excluded certain items of machinery marked as NESA. The Board circular relied upon by the assessee was understood as applying only where eligible machinery had in fact worked extra shifts, and not as granting a global allowance irrespective of the machinery-wise eligibility or the period of extra shift use. Accepting a concern-wise approach would make the NESA exclusions ineffective and lead to an anomalous result, because machinery not entitled to extra shift allowance or not used for the requisite period would still receive the benefit. The reasoning of the Madras High Court in South India Viscose Ltd. was adopted as correctly stating the law.

Conclusion: Extra shift allowance had to be computed machinery-wise and proportionately according to the actual period of extra shift use; the assessee was not entitled to claim it for the whole year on a concern basis.

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