INSPECTING ASSISTANT COMMISSIONER v. LAKSHMI MACHINE WORKS LTD - 1987-LL-0826-5

Citation	1987-LL-0826-5
Appellant Name	INSPECTING ASSISTANT COMMISSIONER
Respondent Name	LAKSHMI MACHINE WORKS LTD.
Court	ITAT
Relevant Act	Income-tax
Date of Order	26/08/1987
Judgment	View Judgment
Keyword Tags	extra shift allowance
Bot Summary:	The contention of the Revenue is that the extra shift allowance should be computed with reference to each individual machine and not with reference to the working of the concern as such even though that is the procedure laid down by the circular of the CBDT No. F. 10/83/8/ITA-II, dt. According to the Revenue, there is a decision of the Madras High Court in South India Viscose Ltd. vs. CIT 135 ITR 206 stating that extra shift allowance should be computed only with reference to the working of each machinery and therefore the circular could not be given effect to. The Revenue also relied on the decision of the Delhi High Court in Geep Industrial Syndicate Ltd. vs. CBDT 166 ITR 88 to say that where there is a decision of the High Court the circular need not be applied. The first is as a contemporaneous exposition of the law, i.e., how the Department itself understood the effect of a provision of the Act and on this aspect no doubt the exposition of the law by the High Court would make the circular redundant. The simplification of the procedure and the beneficial consequence thereof which was brought about by the circular and which has been applied in all such cases which have come before the Tribunal. 26th Feb., 1985 stating that the decisions of the Courts having been rendered without reference to the earlier circular, the extra shift allowance will continue to be computed with reference to the working of the concern as such as before in spite of the decisions. In the circumstances, we have to uphold the order of the CIT(A) accepting the computation made in accordance with the circular of the CBDT. 11.

T.N.C. RANGARAJAN, J.M.: ORDER 1 t o 9 . (These paras are not reproduced here as they involve minor issues.) 10. For asst. yr. 1980-81 there is one additional point with reference to computation of extra shift allowance. contention of Revenue is that extra shift allowance should be computed with reference to each individual machine and not with reference to working of concern as such even though that is procedure laid down by circular of CBDT No. F. 10/83/8/ITA-II, dt. 28th Sept., 1970. According to Revenue, there is decision of Madras High Court in South India Viscose Ltd. vs. CIT (1982) 135 ITR 206 stating that extra shift allowance should be computed only with reference to working of each machinery and therefore circular could not be given effect to. Revenue also relied on decision of Delhi High Court in Geep Industrial Syndicate Ltd. vs. CBDT (1987) 166 ITR 88 to say that where there is decision of High Court circular need not be applied. But this argument of Revenue overlooks two facets of circular. first is as contemporaneous exposition of law, i.e., how Department itself understood effect of provision of Act and on this aspect no doubt exposition of law by High Court would make circular redundant. But other aspect is with reference to concession granted by CBDT against rigour of statute either to grant relief or to simplify procedure. This kind of circular would be binding on Revenue. This dichotomy and effects thereof have been adumbrated by Supreme Court in case of K.P. Varghese vs. ITO (1981) 131 ITR 597. In view of this exposition, we find here other aspect, viz., simplification of procedure and beneficial consequence thereof which was brought about by circular and which has been applied in all such cases which have come before Tribunal. We also find that Revenue has not pressed question in references with regard to binding nature of this particular circular itself. It is pertinent to note that CBDT has issued fresh instruction No. 1605 in F. No. 202/27/84-IT(A-II) dt. 26th Feb., 1985 stating that decisions of Courts having been rendered without reference to earlier circular, extra shift allowance will continue to be computed with reference to working of concern as such as before in spite of decisions. In circumstances, we have to uphold order of CIT(A) accepting computation made in accordance with circular of CBDT. 11. (This para is not reproduced here as it involves minor issue.) *** INSPECTING ASSISTANT COMMISSIONER v. LAKSHMI MACHINE WORKS LTD.

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