Commissioner of Income Tax Vs. Paresh S. Shah - Court Judgment

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counsels: r.v. desal with b.m chatterjee, for the applicant none, for the respondent dr. b.p. saraf & dr. pratibha upasani, jj. 24th november, 1998 income-tax act, 1961, s. 32(1) income-tax rules, 1962, appendix i, entry ill-(ii)c(3) - bombay stamp act, 1958. schedule 1, article 36: [y.r. meena, cj & d.a. mehta & a.s. dave, jj] deed of mortgage liability to pay stamp duty held, any instruments in respect of transactions, relating to loans and advances, loans and mortgages, cash credit or overdraft bonds, agreements of pawn or pledge and letters of hypothecation executed by farmers for agricultural and land development purposes in favour of all commercial bank etc. are entitled to remission of entire duty chargeable under the stamp act with effect on and from 1.4.1979 under government notification dated 23.3.1979. thus, where loan was granted by bank of india under agricultural finance scheme towards purchase of air compressors, drilling rods and other accessories. use of the air compressors, drilling rods and other accessories in case of applicant who is a farmer can only be for purpose of drilling a bore-well for purpose of irrigation in process of carrying on agricultural activities. thus, it is apparent that loan was availed of by applicant-farmer for agricultural and land development purposes because a bore-well would go to increase the utility of agricultural land by ensuring round the year irrigation. the instrument in question would therefore fall within scope of complete remission granted to instrument of mortgage under government notification dated 23.3.1979 and hence not liable to stamp duty under article 36 of schedule i of the act. dr. by. saraf, j.by this reference under s. 256(1) of the it act, 1961, the tribunal has referred the following question of law to this court for opinion at the instance of the revenue.'whether, on the facts and in the circumstances of the case, the tribunal was right in law in holding that extra-shift depreciation allowance be allowed on computers in view of entry 11ic(3) of the table of rates of depreciation in appendix i of the it rules, 1962?'2. as is evident from the question, the only dispute in this case whether extra shift depreciation allowance is allowable on computers. the ito did not allow the claim of the assessee for extra-shift allowance in respect of computers in view of the specific prohibition contained in the depreciation table in appendix i, part i of the it rules, 1962 by inscription of the letters 'n.e.s.a.' against 11 computers'. the cit(a) allowed the claim of the assessee on the ground that the computer constituted plant in the hands of the assessee and hence prohibition on allowance of extra-shift depreciation allowance on computers was not applicable. the order of the cit(a) was confirmed by the tribunal. hence, this reference at the instance of the revenue.3. we have heard mr. r.v. desai, learned counsel for the revenue, who submits that no extra-shift allowance can be allowed on computers in view of the specific prohibition in the table of rates of depreciation contained in appendix 1, part 1 of the it rules, 1962.4. we have considered the above submission of the learned counsel. depreciation is allowable under s. 32 of the act in respect of assets including machinery or plant as may be prescribed. the prescription is contained in r. 5 of the rules which provides, inter alia, that depreciation shall be calculated at the percentages specified in the second column of the table in part i of appendix i to the rules. part 1 of appendix i contains the table of rates at which depreciation is admissible. different rates of depreciation have been prescribed for different categories of assets. plant and machinery fall under category ill. plant and machinery have again been further classified for the purpose of depreciation, and different rates of depreciation have been prescribed for different classes of plant and machinery. item (i) of category iii prescribes the rate applicable to machinery and plant for which no special rate has been prescribed under item (ii). the rate of depreciation for such plant and machinery is 10 per cent. so far as 'computers' are concerned, special rate has been prescribed in entry c(3) of item (ii) of category iii. entry q3) of item (ii) of category iii (machinery and plant) reads :class of assetsrate of depreciationq(3) data processing machines including computers (n.e.s.a.)20item (iv) deals with extra shift allowance. it, however, contains a specific prohibition on allowance of extra shift allowance in respect of certain items of machinery. item (iv), so far as relevant, reads..'(iv) extra shift depreciation allowance :an extra allowance up to a maximum of an amount equal to one-half of the normal allowance shall be allowed where a concern claims such allowance on account of double shift working and establishes that it has worked double shift. an extra allowance up to a maximum of an amount equal to the normal allowance, instead of one-half of the normal allowance, shall be allowed where a concern claims such allowance on account of triple shift working and establishes that it has worked triple shift.the extra shift allowance shall not be allowed in respect of any item of machinery or plant which has been specifically excepted by inscription of the letters 'n.e.s.a.' (meaning 'no extra shift allowance') against it in sub-item(ii) above and also in respect of the following items of machinery and plant to which the general rate of depreciation of 10 per cent applies ..................it is clear from the above provision that no extra-shift allowance is allowable in respect of any item of machinery and plant which has been specifically excepted by inscription of the letters 'xe.s.a.' against it in sub-item (ii). the uncontroverted factual position is that in entry q3) of sub-item (ii), which contains the rate of depreciation for 'data processing machines including computers', the inscription of letters 'xe.s.a.' is there. that being so, computers are specifically excepted from allowance of extra-shift allowance. on face of such express prohibition against allowance of extra-shift allowance, no extra-shift allowance can be allowed on computers. the cit(a) and the tribunal erred in law in allowing the claim of the assessee for extra-shift allowance on computers on the face of express prohibition against allowance of the same.5. in view of the above, we answer the question referred to us in the negative i.e., in favour of the revenue and against the assessee.6. reference is disposed of accordingly with no order as to costs.