- (1.) Under Section 256 (2) of the Income Tax Act, two questions were referred for the opinion of the High court, viz. ,: "1.Whether, on the facts and in the circumstances of the case, the Appellate tribunal was correct in law in cancelling the Commissioner of Income Tax's Order under Section 263 of the Income Tax Act, 1961 for the Assessment Year 1977-78
(2.) Whether, on the facts 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 allowances either in the Income Tax Rules or in the Act - 2. 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 (P) Ltd. v. Commissioner of Income Tax. In view of its answer to Question 2, Question 1 was also answered in favour of the Revenue and against the assessee.
(3.) The assessment year concerned in this appeal is 1977-78. The assessment was made by the Inspecting Assistant Commissioner (IAC) who allowed deduction for depreciation which included extra shift allowance on plant and machinery and also extra depreciation on office equipment. This order was revised by the Commissioner who set aside the assessment order and remitted the matter to the IAC to redetermine the amount of admissible depreciation in accordance with law. He opined that in the case of an "approved hotel" only extra depreciation allowance was admissible but not extra shift depreciation allowance. The assessee preferred an appeal against the order of the Commissioner before the tribunal. The tribunal allowed the appeal on merits following its earlier decision relating to an approved hotel.;