Om Prakash, J. - (1.) BY this reference relating to the assessment years 1973-74 and 1974-75, the Income-tax Appellate Tribunal referred the following question under Section 256(1) of the Income-tax Act, 1961 (briefly, "the Act"), for the opinion of this court : " Whether, on the facts and circumstances of the case, the assessee-company is entitled to extra-shift allowance in addition to the extra depreciation allowance specifically provided in the Income-tax Rules for approved hotels only ?"
(2.) THE assessee-company which runs an approved hotel claims extra-shift depreciation allowance, vide Appendix I, Part I, item III, sub-item (iv), in addition to extra depreciation allowance allowable for approved hotels, vide Appendix I, Part I, item III, sub-item (iii) of the Income-tax Rules, 1962 (for short, "the Rules"). The Appellate Tribunal accepted the contention of the assessee and allowed extra-shift depreciation allowance under sub-item (iv) in addition to extra depreciation allowable for approved hotels under sub-item (iii). The Appellate Tribunal, in its order relating to the assessment year 1974-75 which was relied on for deciding the appeal of the assessee relating to the assessment year 1975-74, held that the extra depreciation under sub-item (iii) was allowed for approved hotels to encourage the setting up of hotels of the required standard necessary for attracting tourists. The Appellate Tribunal was of the view that extra depreciation allowance for the approved hotels was allowed under sub-item (iii) as an incentive in addition to the extra-shift depreciation allowance as provided under sub-item (iv) by the notification issued by the Government of India in the Gazette of India, Extraordinary, dated December 29, 1974. The question, whether an approved hotel is entitled to extra-shift depreciation allowance in addition to extra depreciation allowance, came up for consideration before the Calcutta High Court in S.P. Jaiswal Estates Pvt. Ltd. v. CIT [1991] 188 ITR 603 and then the Calcutta High Court answered that question in favour of the Revenue and against the assessee.
(3.) BEFORE the Calcutta High Court and before the Appellate Tribunal in the instant reference, the pleadings of the assessee were almost similar. Rejecting the case of the assessee, the Calcutta High Court held (page 606) : " When there is a general enactment as well as a special enactment in respect of the same head in a statute, the particular or special enactment would override the general enactment. In our view, extra-shift depreciation allowance under sub-item (iv) is not allowable in the case of approved hotels as extra allowance alone is allowable for such approved hotels. Item (iii) is a special provision for approved hotels and item (iv) is a general provision for other concerns. Extra-shift depreciation allowance which is a general provision applicable to concerns and factories other than approved hotels is, therefore, not allowable in the case of approved hotels which are governed by the special provision. The expression 'extra shift' goes with the factory or the concern which may work day shift as well as night shift. The concept of shift working of the machinery and plant in a hotel may not arise. By the Finance (No. 2) Act of 1980, a new Clause (iia) in Section 32(1) has been inserted providing for further deduction by way of additional depreciation in an amount equal to 50 per cent. of the normal depreciation excluding extra-shift depreciation and extra depreciation allowance for approved hotels. Machinery or plant installed in hotels will qualify for deduction on account of additional depreciation if other conditions laid down in this behalf are fulfilled. From the aforesaid Sub-clause (iia) of Section 32(1), it will be evident that extra allowance for double or multiple shift working of the machinery or plant is not available to an approved hotel. . . ." At page 608, the Calcutta High Court concluded : " On a consideration of the scheme of the Act and the Rules and the facts and circumstances of this case, we are of the view that an approved hotel cannot claim extra-shift allowance in addition to extra allowance. An extra-shift allowance is for double or multiple shift working of the machinery and plant in a factory or concern, whereas extra allowance is allowable only in respect of machinery and plant installed in an approved hotel." ;