- (1.) FOLLOWING questions of law have been referred for opinion of this Court by the Tribunal, Chandigarh Bench, Chandigarh, "(i) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the CIT(A) directing to allow double shift allowance on the additions of machinery during the year to the extent of Rs. 33,48,227 on the concern as a whole worked double shift during the year instead of on each machinery which worked double shift ? (ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of CIT (A) that two interest could not be charged under ss. 215 and 217 (1A) simultaneously -
(2.) THE assessee claimed double shift allowance on the additions of machinery to the extent of Rs. 33,48,227. The AO negatived the claim but the CIT(A) reversed the said view and held that there was evidence that the concern as a whole worked for double shift throughout the year. The Tribunal upheld the said view in the light of the Board's benevolent Punalur Paper Mills Ltd. (1987) 64 CTR (Ker) 211 : (1988) 170 ITR 37 (Ker) and Tribunal decision in IAC vs. Lakshmi Machine Works Ltd. (1988) 24 ITD 511 (Mad). The Tribunal rejected the contention of the Revenue that extra shift allowance was allowable only in respect of machinery which worked extra shift and not in respect of concern working as a whole.
(3.) THE AO charged interest under s. 215 as well as s. 217(1A) of the IT Act, 1961 (for short, 'the Act') which view was of CIT(A). As regards the first question, we are of the view that the same has to be answered in favour of the assessee and against the Revenue in view of judgment of the Hon'ble Supreme Court in South India Viscose Ltd. vs. CIT (1997) 141 CTR (SC) 374 : (1997) 227 ITR 286 (SC), wherein it was observed at p. 300 : "For the reasons aforementioned, it must be held that extra shift allowance had to be calculated on the basis of number of days during which the concern had actually worked double shift or triple shift and the said allowance was not required to be calculated on the basis of the number of days a particular item of machinery or plant had worked double shift or triple shift. We are, therefore, unable to uphold the impugned judgment of the High Court in this regard. In our opinion, the Tribunal had rightly held that the extra shift allowance had to be calculated on the basis of the number of days on which the concern worked as a whole double shift or triple shift and not on the basis of each item of machinery being used in double shift or triple shift. Question No. 4 must, therefore, be answered in the affirmative, i.e., in favour of the assessee and against the Revenue." The said judgment was also followed in Sundaram Spinning Mills vs. CIT (1997) 141 CTR (SC) 360 : (1997) 227 ITR 301 (SC). ;