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Section 32 of the Income-tax Act, 1961 - Depreciation - Extra shift allowance - Assessment year 1978-79 - Whether technical documentation by way of drawings and designs constituted plant was entitled to extra shift allowance in view of circular of Central Board of Direct Taxes dated 20-3-1973, if it was shown that assessee's concern had worked multiple shifts - Held, yes Notice and Circulars : Circular No. 109, dated 20-3-1973 issued by CBDT FACTS The assessee, in computing its income of the relevant assessment year, took into account certain sum, being extra shift allowance on capitalised documentation fees. The assessee's claim was that those drawings and designs were required to be consulted at every stage of the multiple working of the shifts and were, therefore, admissible to extra shift allowance. For aforesaid purpose, the assessee placed reliance upon circular dated 28-9-1970 issued by CBDT. The ITO rejected the assessee's claim. The AAC decided the issue in favour of the assessee. The Tribunal however, held that drawings and designs were not entitled to extra shift allowance. On reference : HELD Upon a plain reading of the Board's Circular No. 109, dated 20-3-1973, it is patent that drawings and designs which, admittedly, are plant are entitled to extra shift allowance, if it is shown that the assessee's concern had worked multiple shifts and it is not necessary to determine whether the drawings and designs themselves had actually been employed in the working of the multiple shifts. Therefore, on the facts and circumstances of the case, technical documentation by way of drawings and designs, which constituted plant was entitled to extra shift allowance in accordance with the circular of the CBDT. The case was decided in favour of the assessee. CASES REFERRED TO Anantapur Textiles Ltd. v. CIT [1979] 116 ITR 851 (Cal.), CIT v. Punalur Paper Mills Ltd. [1988] 170 ITR 37 (Ker.), Juggilal Kamlapat Spg. & Wvg. Mills Co. Ltd. v. CIT [1992] 193 ITR (St.) 25 and South India Viscose Ltd. v. CIT [1982] 135 ITR 206 (Mad.). K.P. Kumar, King and Partridge for the Applicant. H. Raghavendra Rao for the Respondent. JUDGMENT S.P. Bharucha, CJ. -This is a reference…

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