Beneficial CBDT circular on extra shift allowance binds Revenue and supports computation for the concern as a whole.

Extra shift allowance was to be computed with reference to the concern as a whole, not separately for each individual machine, where the applicable CBDT circular adopted a simplified and beneficial method of calculation. The circular was stated to be binding on the Revenue as a concession against the rigour of the statute, and contrary judicial decisions did not displace it so long as the circular remained in force. A later CBDT instruction was also described as continuing the same approach despite the Revenue's reliance on court decisions, and the assessee's method of computation was accepted.

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Issues: Whether extra shift allowance was to be computed with reference to each individual machine or with reference to the working of the concern as a whole, and whether the CBDT circular governing such computation was binding on the Revenue.

Analysis: The computation of extra shift allowance was governed by a CBDT circular that adopted a simplified and beneficial method of calculation with reference to the concern as a whole. The existence of judicial decisions taking a different view did not displace the circular in so far as it granted relief and simplified procedure. A circular of this nature, being a concession against the rigour of the statute, was binding on the Revenue. The later CBDT instruction also continued the same approach notwithstanding the court decisions relied upon by the Revenue.

Conclusion: The computation made in accordance with the CBDT circular was ; the Revenue's contention failed and the assessee succeeded on this issue.

Final Conclusion: The appellate order accepting the assessee's method of computation was upheld.

Ratio Decidendi: A beneficial CBDT circular granting relief or simplifying procedure is binding on the Revenue even where contrary judicial decisions exist, unless the circular itself is withdrawn or overridden.

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