Law:

Section:

Section 32 of the Income-tax Act, 1961 - Extra shift allowance - Whether in view of Tribunal's finding as a fact that air-conditioning machinery formed integral part of Nylon-6 plant of assessee, assessee was rightly allowed extra shift allowance notwithstanding express prohibition contained in item III(ii)(B)(2) of Table in Part 1 of Appendix I - Held, yes FACTS The Tribunal held that the assessee was entitled to extra shift allowance even on air-conditioning machinery notwithstanding the express prohibition contained in item No. II(ii)( B)(2) of the Table in Part 1 of Appendix I. It further refused to make reference under section 256(1) as no referable question of law was involved. On reference application under section 256(2): HELD The Tribunal had found as a fact that the air-conditioning machincery formed an integral part of the Nylon-6 plant. This being so, the decision of the Supreme Court in the case of J.K. Synthetics Ltd. v. CIT [1981] 130 ITR 23, was applicable and, therefore, the Tribunal was right in holding that the assessee was entitled to extra shift allowance even on air-conditioning machinery. Section 256, read with section 32, of the Income-tax Act, 1961 - Reference - Question of law - Tribunal held that assessee was entitled to extra shift allowance on entire plant and machinery including those installed during relevant year without determining number of days assessee worked double shift or triple shift - Whether Tribunal's findings were pure questions of law and Tribunal was wrong in refusing reference - Held, yes FACTS The Tribunal held that the assessee was entitled to extra shift allowance on the entire plant and machinery including those installed during the relevant year without making any attempt at determining the number of days the concern worked double shift or triple shift. The Tribunal, however, while admitting that it was a question of law, declined to refer the same by relying upon a Board's circular which was binding on all authorities. On an application under section 256(2): HELD The so-called circular appeared to be a letter which had been written by the Board and which letter had been quoted in a decision of the Tribunal.…

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