Law:

Section:

Section 32 of the Income-tax Act, 1961, read with Rule 5 of the Income-tax Rules, 1962 - Depreciation - Extra shift Allowance - Assessment year 1962-63 - Weather normal allowance referred to in Explanation I appended to Part I of Appendix I of rule 5 refers to figure of normal depreciation had machinery and plant worked out for 180 days or more and not normal depreciation actually allowed - Held, yes Interpretation of statute: legislative intent FACTS The assessee company worked for 112 days and in accordance with rule 5 of the Rules, it was entitled to 50 percent of the normal depreciation allowance in respect of plant and machinery. The ITO held that the assessee would be entitled to extra double shift allowance at 50 percent of actual normal allowance. On appeal, the AAC held that the ITO had committed a factual error inasmuch as he assumed that for the purpose of extra allowance for double shift working, the normal allowance had to be the actual normal allowance that was permissible to the assessee-company for the assessment year in question. He held that the normal allowance for purposes of calculating the extra allowance had to be the full depreciation allowance permissible for the plant and machinery in question. On appeal by the Revenue, the Tribunal restored the calculation done by the ITO. On reference: HELD The Explanation 1 appended to Part I of Appendix I of the Rules defines normal allowance for purposes of calculating the extra shift allowance for double or triple shift working. If the legislative intent had been to take the actual normal depreciation allowance admissible for any particular year to be the criteria, there would be no need for engrafting the Explanation, because the main provision begins by saying, "an extra allowance up to a maximum of 50 percent of the normal allowance shall be allowed by the ITO where a concern claims such allowance on account of double shift working....". The normal allowance mentioned in the main part of the entry in the remarks column would have referred to the normal allowance actually allowed. The Explanation seeks to give an artificial meaning to the phrase 'normal allowance' for the purpose of calculating…

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