C.I.T. LUDHIANA vs. M/S NAHAR SPLINNING MILLS LTD.

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ITR/185/1995HC Punjab & HaryanaPHHC01032246199513 November 2006Bench: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL1 pages

AI SummaryAllowed

What did the High Court hold?

The High Court answered the referred question of law against the revenue and in favour of the assessee. The Court's decision was based on its judgment rendered on 05.09.2006 in I.T.R. No.9 of 1995, titled The Commissioner of Income Tax, Patiala v. M/s Hind Woollen & Hosiery Mills, Ludhiana. While the specific reasoning from the cited judgment is not detailed in this order, the principle applied is that full triple shift allowance is admissible if the factory worked for triple shifts, irrespective of the number of days the machinery actually so worked. The operative direction is that the question is answered in favour of the assessee.

What were the facts?

This case involves an Income Tax Reference (I.T.R. No.185 of 1995) before the High Court of Punjab and Haryana at Chandigarh. The applicant is the Commissioner of Income Tax (Central), Ludhiana, and the respondent is M/s Nahar Spinning Mills Ltd., Ludhiana. The reference arises from an order dated 29.06.1993 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, in I.T.A. No.71/Chandi/89, pertaining to the assessment year 1984-85. The core of the dispute concerns the admissibility of triple shift allowance.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the order of the first appellate authority that full triple shift allowance is admissible if the factory worked for triple shifts irrespective of the number of days the machinery actually so worked? (Question of law) Assessee's Contention: The assessee argued that full triple shift allowance is admissible if the factory operated for triple shifts, regardless of the specific number of days the machinery was utilized for such shifts. The ITAT upheld the order of the first appellate authority on this basis. Revenue's Contention: The revenue's contention is implicit in the question referred to the High Court, challenging the ITAT's decision to uphold the allowance of full triple shift allowance under the stated conditions.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No.185 of 1995 Date of decision: 13.11.2006 Commissioner of Income Tax (Central), Ludhiana. ---Applicant Vs. M/s Nahar Spinning Mills Ltd., Ludhiana. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Mr. S.K. Garg Narwana, Advocate for the revenue. Mr. Sanjay Bansal, Advocate for the assessee. ----- ORDER: Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, arising out of its order dated 29.06.1993 in I.T.A. No.71/Chandi/89 in respect of assessment year 1984-85:- “Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the order of the first appellate authority that full triple shift allowance is admissible if the factory worked for triple shifts irrespective of the number of days the machinery actually so worked?” In view of our judgment rendered on 05.09.2006 in I.T.R. No.9 of 1995 The Commissioner of Income Tax, Patiala v. M/s Hind Woollen & Hosiery Mills, Ludhiana, the question is answered against the revenue and in favour of the assessee. ( ADARSH KUMAR GOEL ) JUDGE November 13, 2006 ( RAJESH BINDAL ) ashwani JUDGE

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