C.I.T. PATIALA vs. M/S MAHAVIR SPINNING MILLS CHD.

PDF · subscribers

ITR/161/1996HC Punjab & HaryanaPHHC01034966199619 September 2006Bench: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages

AI SummaryAllowed

What did the High Court hold?

The High Court held that the Tribunal was right in law in allowing extra shift allowance on the generator. The Court referred to its earlier decision in CIT v. Saraswati Industrial Syndicate Limited, (2002) 257 ITR 779, which held that a generating set cannot be treated as independent of the whole concern. The extra shift allowance should be allowed by considering the entire concern as one unit. While the judgment explicitly addresses the generator, the reasoning applies equally to the weighing scale as part of the plant and machinery. Therefore, the question is answered against the revenue and in favour of the assessee. The operative direction is to confirm the ITAT's order.

What were the facts?

The Commissioner of Income Tax (Revenue) has filed an Income Tax Reference (ITR) No. 161 of 1996 before the High Court of Punjab and Haryana at Chandigarh. The reference arises from an order dated March 10, 1995, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, in ITA No. 133/Chandi/90, concerning assessment year 1986-87. The assessee, M/s Mahavir Spinning Mills, claimed extra shift allowance on a generator and a weighing scale. The ITAT allowed this claim, holding that the generator and weighing machine were part of the plant and machinery and thus eligible for extra shift allowance.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing extra shift allowance on a generator? (Question of law, relating to the eligibility of a generator for extra shift allowance under the Income Tax Act, 1961). 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing extra shift allowance on a weighing scale? (Question of law, relating to the eligibility of a weighing scale for extra shift allowance under the Income Tax Act, 1961). Assessee's Contention: The assessee contended that the generator and weighing scale were integral parts of the plant and machinery used in its business, and therefore, entitled to extra shift allowance. Revenue's Contention: The revenue's contention is implicit in the reference, challenging the ITAT's decision to allow extra shift allowance on these items.

AI-generated summary — verify with the full judgment below

ITR No.161 of 1996 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No.161 of 1996

Date of decision: 19.9.2006 The Commissioner of Income Tax, Patiala

....Petitioner versus M/s Mahavir Spinning Mills, Chandigarh Road, Ludhiana 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 has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, arising out of its order dated 10.3.1995 in ITA No.133/Chandi/90, in respect of assessment year 1986-87:- “Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing extra shift allowance on generator and weighing scale?” The assessee claimed extra shift allowance on generator and weighing scale which has been allowed by the Tribunal by recording a finding that the generator and weighing machine were part of plant and machinery and the assessee was entitled to extra shift allowance for the generator and the weighing scale. The issue has been gone into by this Court in CIT v. Saraswati

ITR No.161 of 1996 2 Industrial Syndicate Limited, (2002) 257 ITR 779, wherein, it was held that generating set cannot be treated as independent of the whole concern and extra shift allowance has to be allowed taking into account the entire concern as one unit. In view of the above, the question is answered against the revenue and in favour of the assessee. (Adarsh Kumar Goel) Judge Sept. 19, 2006 (Rajesh Bindal) 'gs' Judge

Recent GST High Court judgments

Search GST case law →