COMMISSIONER OF INCOME TAX vs M.D. PENDSE

Dr. B. P. Saraf, J.

By a reference u/s 256(1) of the Income Tax Act (hereinafter referred to as `the Act''), the Tribunal has referred the following questions of law to this court for opinion, out of which question No. 1 is at the instance of revenue and question Nos. 2 and 3 are at the instance of assessee.

(i) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the business carried on by the assessee in "poultry farming" was an "industrial undertaking" engaged in manufacturing and production within the meaning of section 32A of the Income Tax Act, 1961?

(ii) Whether the Tribunal was correct in holding that the assessee was not entitled to claim extra shift allowance in respect of :

(i) Cages and equipment,

(ii) California type sheds?

(iii) Whether the Tribunal was correct in holding that the assessee was not entitled to claim double shift allowance in respect of machinery?

The learned counsel for the parties have agreed that the controversy in this case now stands concluded in view of the decision in the case of assessee itself CIT v. M.D. Pendse (IT Ref. No. 500 of 1995) wherein it has been held that the assessee is not entitled to investment allowance u/s 32A of the Act. In view of the above question No. 1 is answered in the negative i.e., in favour of the revenue and against the assessee.

So far as question Nos. 2 and 3 are concerned, the controversy therein pertains to entitlement of the assessee to claim extra shift allowance in respect of cases and equipment and California type sheds and double shift allowance in respect of machinery. The learned counsel for the assessee Mr. A.P. Sathe submits that the assessee is entitled to get extra shift allowance in respect of first two items and double shift allowance in respect of machinery. In support of this contention he relied upon a decision of the Supreme Court in the case of M/s. South India Viscose Ltd. Vs. Commissioner of Inocme Tax, .

Mr. Shyam Diwan, learned counsel for the revenue , on the other hand submits that Supreme Court decision relied upon by the assessee is not applicable in this case in view of the concurrent findings of the authorities below that the assessee failed to prove that the concern of the assessee was working for more than one shift. He further drew our attention to the order of the Tribunal wherein it is stated that there was no extra shift working in the concern of the assessee. It is thus evident that the assessee is not entitled to extra shift allowance.

In view of the above we are of the opinion that the Tribunal was correct in holding that the assessee was not entitled to claim extra shift allowance in respect of cages and equipment and double shift allowance in respect of machinery. We therefore answer question Nos. 2 and 3 in the affirmative i.e., in favour of the revenue and against the assessee.

This reference is accordingly disposed of with no orders as to costs.