RANJANA DESAI, J. - (1.) BY this reference under S. 256(1) of the IT Act, 1961, the Tribunal has referred the following question of law to this Court for opinion at the instance of the Revenue : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that extra -shift allowance of depreciation is allowable on data processing computer system ?"
(2.) THE relevant facts are as under : The assessee is a company carrying on business of setting up a data processing centre using computer systems. The relevant assessment year is 1980 -81. The assessee claimed extra -shift allowance, in addition to allowance of normal depreciation, on the data processing computer system. The ITO held that depreciation at the rate of 20 per cent is allowed on computer system. However, no extra -shift allowance is allowable. He, therefore, disallowed the said claim. The appeal carried, to the CIT(A) by the assessee was allowed. The CIT(A) relied upon an earlier order of the Tribunal in the assessee's case and held that the extra -shift allowance on data processing computer system was allowable. In the appeal carried to the Tribunal by the Revenue, the Tribunal held following its earlier decision that the extra -shift allowance on data processing computer machine is allowable and hence no interference was called for with the order of the CIT(A). It is against this background that the present reference is made to this Court. Our attention is drawn by learned counsel for the parties to the decision of this Court in CIT vs. Paresh S. Shah (1999) 153 CTR (Bom) 452 : (1999) 238 ITR 254 (Bom). In that case this Court while dealing with a similar question considered the relevant provisions of law. Reference was made to S. 32 of the IT Act which deals with allowable depreciation in respect of assets including plant and machinery as may be prescribed. Reference is also made to r. 5 of the IT Rules, 1962, which provides, inter alia, that depreciation shall be calculated at the percentage specified in the second column of the Table in Part I of Appendix I to the Rules. Different rates of depreciation have been prescribed for different categories of assets. Plant and machinery fall under Category III. Plant and machinery have been further classified for the purpose of depreciation and different rates of depreciation have been prescribed for different classes of plant and machinery. So far as computers are concerned, special rates have been prescribed in entry C(3) of sub -item (ii) of Category III. The said entry reads thus : Class of assets Rate of depreciation C(3) Data processing machines including computers (N.E.S.A) 20 Item (iv) which deals with extra -shift depreciation allowance reads thus : "An extra allowance up to a maximum of an amount equal to one -half of the normal allowance shall be allowed where a concern claims such allowance on account of double shift working and establishes that it has worked double shift. An extra allowance up to a maximum of an amount equal to the normal allowance, instead of one -half of the normal allowance, shall be allowed where a concern claims such allowance on account of triple shift working and establishes that it has worked triple shift........ The extra -shift allowance shall not be allowed in respect of any item of machinery or plant which has been specifically excepted by inscription of the letters 'N.E.S.A.' (meaning 'no extra shift allowance') against it in sub -item (ii) above and also in respect of the following items of machinery and plant to which the general rate of depreciation of ten per cent, applies..........." Considering these provisions the Court observed that no extra -shift allowance was allowable in respect of any item of plant and machinery which has been specifically excepted by inscription of the letters N.E.S.A. against it in sub -item (ii). There is no dispute that in entry C(3) of sub -item (ii) which contains the rate of depreciation for "data -processing machines including computers", inscription of letters N.E.S.A. is there. Therefore, computers are specifically excepted from allowance of extra -shift allowance. This Court, therefore, observed that on the face of such express prohibition against allowance of extra -shift allowance, no extra -shift allowance can be allowed on computers.
(3.) LEARNED counsel for the parties are agreed that the facts of the present case are clearly covered by the above quoted decision. In that view of the matter, the question referred to us is answered in the negative, i.e., in favour of the Revenue and against the assessee. Reference disposed of accordingly with no order as to costs.;