Commissioner of Income Tax vs Saraswati Industrial Syndicate Ltd.

G.S. Singhvi, J.—This is a petition by the Revenue for directing the Tribunal to refer the following question of law to this court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in dismissing the Departmental appeal thereby confirming the order of the learned Commissioner of Income Tax (Appeals) who directed the Assessing Officer to allow extra shift allowance on the generating set as the same was not claimed by the assessee-company at the time of original assessment ?"

A brief statement of facts will enable us to decide whether the question sought by the Revenue is a question of law which requires adjudication by this court.

The assessee is a limited company. It is engaged in the business of manufacture and sale of different goods in its establishment at Yamuna Nagar (Haryana), Calcutta and Shahzadpur. For the assessment year 1986-87 it filed return of income on June 30, 1986, declaring an income of Rs. 5,44,30,070. It was subsequently revised on July 28, 1988, and the total declared income was Rs. 5,30,55,040. The assessment proceedings were completed u/s 143(3) on a total income of Rs. 5,89,08,770. It was revised u/s 154 at an income of Rs. 5,89,65,720. At the time of original assessment depreciation was allowed on different items including the extra shift allowance. Later on, the assessee filed an application u/s 154 and submitted a revised depreciation chart and claimed the benefit of extra shift allowance on the basis of work of the concern. This application was rejected by the Deputy Commissioner vide order dated November 28, 1988. In the appeal filed by the assessee, the Commissioner of Income Tax (Appeals) upheld the claim of the asses-see and directed the Assessing Officer to allow extra shift allowance on the generating set. The Revenue appealed against the order of the Commissioner of Income Tax (Appeals) but failed to persuade the Income Tax Appellate Tribunal, Delhi Bench, Delhi, to set aside the order of the appellate authority. The Tribunal dismissed the Revenue''s appeal on September 28, 1993. A reference application filed u/s 256(1) of the Act was also dismissed by the Tribunal.

We have heard Shri R.P. Sawhney, and Shri A.K. Mittal at considerable length. Shri Sawhney argued that the order passed by the Tribunal is quite cryptic and sketchy and this by itself should be sufficient for directing it to refer the question of law to this court. On the other hand, Shri Mittal argued that the generator set forms part of plant and machinery and, therefore, the claim of the assessee for grant of extra shift allowance has been rightly accepted by the Commissioner of Income Tax (Appeals) and the absence of reasons in the order passed by the Appellate Tribunal cannot be a ground to direct it to make a reference u/s 256(1).

Having considered the submissions made by learned counsel, we agree with Shri Mittal that no question of law arises for adjudication in this case. In his order, the Commissioner of Income Tax (Appeals) held that the generating set cannot be treated as independent of the whole concern and that the extra shift allowance should be granted by taking the entire concern as one unit. This view of the Commissioner (Appeals) has been affirmed by the Tribunal and we do not find any reason to take a different view. Learned counsel for the Revenue could not show as to how the generating set is not a part of the plant and machinery and how it could be used independently for the purpose of carrying manufacturing process. Thus, we do not find any reason to entertain the application filed by the Revenue for directing the Tribunal to make reference of the question of law framed by it.

Consequently, the reference application is dismissed.