Supreme Court of India

M/S SUNDARAM SPINNING MILLSversusCOMMISSIONER OF INCOME TAX, MADRAS

Citation: 1997 INSC 562
Decided: 9 July 1997
Disposal: Appeal(s) allowed
Bench: S C AGRAWAL

Holding

The Supreme Court held that the assessee is entitled to the extra shift allowance.

Summary

Mis Sundaram Spinning Mills appealed against a Madras High Court order that denied its claim for an extra shift allowance on machinery added in the previous year, on the basis that the entire concern worked double and triple shifts. The assessee argued that the additional shifts justified an extra allowance under the Income Tax Act, 1961. The High Court relied on earlier decisions in Mis South India Viscose Ltd. and held the claim was not permissible. The Supreme Court revisited the matter, referring to its own earlier judgment in Civil Appeal Nos. 3179‑81/82, which had allowed a similar claim. Applying the same reasoning, the Court held that the assessee was entitled to the extra shift allowance. Consequently, the appeal was allowed and the High Court judgment set aside.

Issues considered

Whether the assessee is entitled to an extra shift allowance for machinery added during the previous year on the basis of double and triple shifts worked by the entire concern.

Legislation cited

Income Tax Act, 1961

Subjects

extra shift allowanceincome taxmachinerydouble shifttriple shiftassessment yearassesseerevenue

Judgment

                        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 JURISDICTION : 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

          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 :
B
             "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?"
c
          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.




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