1996 (11) TMI 1

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....acts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the assessee was entitled to extra depreciation allowance and also extra shift depreciation allowance on the reasoning that there was no prohibition for granting both the allowance either in the Income-tax Rules or in the Act ? " The High Court has answered the second question against the assessee and in favour of the Revenue following the judgment of that court in S. P. Jaiswal Estates Private Limited v. CIT [1991] 188 ITR 603 (Cal). In view of its answer to question No. 2, question No. 1 was also answered in favour of the Revenue and against the assessee. The assessment year concerned in this appeal is 1977-78. The assessment was mad....

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....pril 1, 1970, or thereafter, depreciation is allowed on "machinery and plant", mentioned as item III in the Appendix. Prior to April 1, 1970, the rate of depreciation on machinery and plant was 7 per cent. But in the case of a concern working double shift, an additional 50 per cent. of the said rate of depreciation was allowed. Similarly in the case of triple shift, another 50 per cent. of the said rate was allowed. In other words, in the case of a concern working for three shifts, the rate of depreciation allowed was 14 per cent. After April 1, 1970, the extra shift depreciation allowance was practically continued in the same terms in clause (iv) of item III, though there was a change in the rate. Sub-item (iii) of item III, however, provi....

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....vided by sub-item (iii) and not to the extra shift depreciation allowance provided by sub-item (iv). The contention is that an approved hotel is not entitled to both the said allowances simultaneously and that it is entitled only to the extra depreciation allowance in sub-item (iii) but not to extra shift allowance in sub-item (iv). It is not possible to agree. The depreciation is allowed on machinery and plant and not with reference to the nature or character of the activity carried on in the premises where the said machinery is installed. Indeed, prior to April 1, 1970, there was no reference to hotels in item III. If any machinery is installed in a hotel, such machinery is certainly entitled to depreciation allowance. Admittedly, there i....