C.IT PATIALA vs. HMM LTD N.DELHI

ITR/118/1990HC Punjab & HaryanaPHHC01021544199024 October 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the tubewell should be treated as part of the plant and machinery of the assessee. The reasoning was based on the principle that components integral to the functioning of a plant are considered part of the plant and machinery. The Court referred to its own previous decisions where generators and electric transformers were held to be part of plant and machinery. Applying this principle, the Court found that the Tribunal had rightly treated the tubewell as part of the plant and machinery of the milk plant. The question of law was answered against the revenue and in favour of the assessee. The reference was disposed of accordingly.

What were the facts?

The assessee, M/s. HMM Limited, New Delhi, claimed extra shift allowance on a tubewell installed in its milk plant for the assessment years 1978-79 and 1980-81. Initially, the allowance was not granted. However, upon an application under section 154 of the Income Tax Act, 1961, before the CIT(A), the assessee was held entitled to the allowance. The Income Tax Appellate Tribunal upheld this decision, relying on its previous orders in similar cases. The Commissioner of Income Tax, Patiala, has referred a question of law to the High Court.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing extra shift allowance on a tubewell by treating the same as 'plant and machinery'? (Question of law) Assessee's contention: Not recorded in the judgment. Revenue's contention: The revenue argued that the tubewell should not be treated as 'plant and machinery' for the purpose of claiming extra shift allowance. The learned counsel for the revenue was unable to show that the Tribunal's view had been disturbed. The revenue relied on the High Court's observation in CIT v. Saraswati Industrial Syndicate Limited, (2001) 257 ITR 779, that a generator was an integral part of plant and machinery, and the High Court's own judgment in ITR No.60 of 1988 (The Commissioner of Income Tax (Central) Ludhiana v. M/s. Oswal Woollen Mills Limited, Ludhiana) where electric transformers were held to be part of plant and machinery.

Which sections of the Income-tax Act were involved?

Section 154

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITR Nos.118 and 119 of 1990 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR Nos.118 & 119 of 1990 Date of decision: 24.10.2006 The Commissioner of Income Tax, Patiala ....Petitioner versus M/s. HMM Limited, New Delhi ....Respondent CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present: Dr. N.L.Sharda, Advocate, for the revenue.

JUDGMENT: Following question of law has been referred for the opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh bench, Chandigarh (for short, 'the Tribunal') arising out of its order dated 28.9.1988 in ITA Nos.991 and 992/Chandi/85, for the assessment years 1978-79 and 1980-81:_ “Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing extra shift allowance on tubewell by treating the same as 'plant and machinery'?”

The assessee is running milk plant and claimed extra shift allowance on tubewell installed in its factory. The same was initially not granted but on an application under section 154 of the Income Tax Act, 1961 (for short, 'the Act'), before the CIT(A), the assessee was

The order continues below.

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