Satish Chandra, C.J. - (1.) M/s. Dhampur Sugar Mills Ltd., the assessee, owns and runs a sugar factory. It woiks seasonally. For the assessment year 1964-65. it worked triple shift for 105 days. It claimed 100% of the normal depreciation allowance for the triple shifts. The ITO allowed extra shift allowance to the extent of 105 to 300 of the normal depreciation allowance. This view was upheld in appeal as well as by the Tribunal in further appeal.
(2.) At the instance of the assessee, the Tribunal referred the following question of law for the opinion of this court: "Whether, on the facts and in the circumstances of the case, and having regard to the second proviso to Rule 5 of the Income-tax Rules, 1962, the Tribunal was right in holding that the extra shift depreciation allowance for double and triple shift working in the case of the assessee-company was to be calculated with reference to the actual number of days on which the extra shifts worked and not at 100% of the normal depreciation allowance for the relevant previous year ?"
(3.) When the case came up for hearing before a Division Bench, it found that on this matter there was a conflict of opinion in this court. It referred the following question of law for decision by a larger Bench : "Whether having regard to Rule 5 read with entry III of Appendix I, Part I, of the Income-tax Rules, 1962, as applicable in the assessment year 1964-65, depreciation allowance for multiple shift working has to be allowed in proportion to the number of days on which the machinery or plant was used or an amount equal to the full allowance of normal depreciation ?";