M/S SUNDARAM SPINNING MILLS vs. COMMISSIONER OF INCOME TAX, MADRAS

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CIVIL APPEAL No. 376/1985Supreme Court1997 INSC 56209 July 1997Bench: 2 JudgesAuthor: S.C. AGRAWAL, D.P. WADHWA MIS SUNDARAM SPINNING MILLS A2 pages
AI SummaryAllowed

What did the Supreme Court hold?

The Supreme Court allowed the appeal, setting aside the judgment of the Madras High Court. The Court held that the question referred to it should be answered in the affirmative, in favour of the assessee and against the Revenue. This decision was based on the reasoning provided in a judgment delivered on the same day in Civil Appeal Nos. 3179-81/82, which dealt with a similar question. The principle established is that an assessee is entitled to extra shift allowance in respect of machinery added during the previous year, if the entire concern operated on double and triple shifts. The operative direction was to allow the appeal and answer the referred question in favour of the assessee. No costs were awarded.

What were the facts?

The assessee, M/s Sundaram Spinning Mills, appealed to the Supreme Court against the judgment of the Madras High Court. The High Court had answered a reference question in the negative, in favour of the Revenue. The question concerned the assessee's entitlement to extra shift allowance for machinery added during the previous year relevant to assessment year 1970-71. This entitlement was claimed based on the double and triple shifts worked by the entire concern. The High Court's decision was based on its earlier judgment in a similar case, which in turn relied on another High Court decision. The Supreme Court had pronounced a judgment on the same day in Civil Appeal Nos. 3179-81/82, which dealt with a similar question and had allowed the appeal in favour of the assessee.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the assessee is entitled to extra shift allowance in respect of the machineries added during the previous year relevant to the assessment year 1970-71 on the basis of double and triple shifts worked by the entire concern? (Question of law and fact, concerning entitlement to extra shift allowance). Assessee's Contention: The assessee contended that it was entitled to extra shift allowance for the newly added machinery, based on the overall double and triple shifts operated by the entire concern. The judgment does not explicitly record the assessee's arguments beyond the framing of the issue and the reliance on the Supreme Court's decision in a connected matter. Revenue's Contention: The Revenue contended that the assessee was not entitled to the extra shift allowance. The judgment does not explicitly record the Revenue's arguments beyond the High Court's decision being in its favour and the framing of the issue. The High Court had answered the question in the negative, against the assessee.

Which sections of the Income-tax Act were involved?

None explicitly mentioned

AI-generated summary — verify with the full judgment below

.. MIS SUNDARAM SPINNING MILLS A v. COMMISSIONER OF INCOME TAX, MADRAS JULY 9, 1997 [S.C. AGRAWAL AND D.P. WADHWA, JJ.) B Income Tax Act, 1961 : Extra shift allowance-Claimed by assessee--Entitlement of-c!nrespect of the machinery added on the basis of double and tJiple shifts worked by the C entire concem-Held, entitled. Appeal filed by the assessee before the High Court on the question of entitlement of extra shift allowance in respect of the machinery added during the previous year on the basis of double and triple shifts worked by the entire concern was answered in the negative. Hence this appeal by the D assessee. Allowing the appeal, this Court HELD: In view of the judgment passed in Civil Appeal Nos. 3179- 81182 on July 9, 1997, and for the reasoning given therein, question referred E to is answered in favour of the assessee and against the Revenue. [88-D-EJ Mis South India Viscose Ltd. v. Commissioner of fllcome Tax, [1996) SCR [1997) Vol. 6 SCC 393, relied on. Mis South India Viscose Ltd. v. Commissioner of Income Tax, 135 ITR F 206, referred to. CIVIL APPELLATE JURI ICTION : Civil Appeal No. 376 of 1985. . From the Judgment and Order dated 25.4.84 of the Madras High G Court in T.C. No. 68 of 1980. Ms. Janki Ramachandran for the Appellant. Dr. V. Gaurishankar, B. Krishna Prasad and S. Rajappa for the Respondent. H 87

88 SUPREME COURT REPORTS (1997) SUPP. 2 S.C.R. A The Judgment of the Court was delivered by B c S.C. AGRAWAL, J. This appeal by the assesscc is directed against the judgment of the High Court of Madras dated April 25, 1984 whereby the following question was answered in the negative, i.e., against the assessee and in favour of the Revenue : "Whether, on the facts and in the circumstances of the case, the assessee is entitled to extra shift allowance in respect of the machineries added during the previous year relevant to the assess- ment year 1970-71 on the basis of double and triple shifts worked by the entire concern?" The High Court has placed reliance on its earlier judgment dated April 24, 1984 in T.C. No. 1053-54 of 1979, Commissioner of Income Tax v. Mis South India Viscose Ltd., which was based on the judgment in Mis South India Viscose Ltd. v. Commissioner of Income Tax, 135 ITR 206. Civil D Appeal Nos. 3179-81/82 filed against the said judgment of the High Court reported in 135 ITR 206 have been allowed by our judgment pronounced , today and a similar question has been answered in the affirmative. For the reasons given in the said judgment of this Court the question referred must be answered in the affirmative, i.e., in favour of the ass~ssee and against the Revenue. The appeal is accordingly allowed, the impugned judgment E of the High Court is set aside and the question referred is answered in the affirmative, i.e., in favour of the assessee and against the Revenue. No order as to costs. R.K.S. Appeal allowed. .. f

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