Ajit K. Sengupta, J.:— In this reference under section 256(1) of the Income-tax Act, 1961, for the assessment year 1978-79, the following question of law has been referred to this court:
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that extra shift depreciation allowance for triple shift working was not available to the assessee's approved hotel?”
2. The facts leading to this reference are stated hereinafter. The assessee is a private limited company and derived income from hotel business. The assessee's hotel is an approved one. According to the assessee, its hotel worked triple shift during the previous year relevant to the assessment year under consideration. The assessee claimed before the Income-tax Officer extra shift depreciation allowance for triple shift working. This claim was disallowed by the Income-tax Officer on the ground that the assessee is entitled to extra depreciation allowance under sub-item (iii) of Item No. III of Part I of Appendix I of the Income-tax Rules, 1962, being an approved hotel and as such extra shift allowance for triple shift working was not available to it under sub-item (iv) thereof. He also relied on the Central Board of Direct Taxes Circular No. 109 dated March 20, 1973 see [1973] 89 ITR (St.) 30. This finding was upheld by the Commissioner of Income-tax (Appeals). On further appeal, it was contended before the Tribunal on behalf of the assessee that sub-item No. (iii) related to extra depreciation allowance for approved hotels only whereas sub-item (iv) covers extra shift depreciation allowance for triple shift working and that this could not be disallowed only because the assessee's hotel is an approved one. This contention was opposed by the departmental representative who relied on the decision of this Tribunal in the case of Hotel Banjara Ltd. v. ITO. Following the said decision of the Hyderabad Bench, this Tribunal upheld the finding of the Commissioner of Income-tax.
3. The short question which calls for determination here is whether an approved hotel is entitled to extra shift depreciation allowance in addition to extra allowance. Section 32 deals with depreciation. Rule 5 of the rules deals with the calculation of depreciation. The percentages of depreciation allowable are given in Part I of Appendix I. In that Appendix I, item III of Part I refers to the percentage of depreciation allowable in respect of machinery and plant at the specified rates thereunder. Under sub-item (iii), extra depreciation allowance for approved hotels is allowable, whereas under item (iv), extra shift allowance is allowable for concerns and factories. The relevant rules are as follows:
“Appendix I, Part I
(iii) Extra depreciation allowance for approved hotels:
An extra allowance of depreciation of an amount equal to one-half of the normal allowance shall be allowed in the case of machinery and plant installed by an assessee, being an Indian company, in premises used by it as a hotel where such hotel is for the time being approved by the Central Government for the purposes of section 33 of the Act.
Explanation. —For the purposes of this sub-item and sub-item (iv), ‘normal allowance’ means the amount of depreciation allowance other than the extra depreciation allowance under this sub-item or the extra shift depreciation allowance under sub-item (iv) which is allowable under rule 5.
(iv) Extra shift depreciation allowance:
An extra allowance up to a maximum of an amount equal to one-half of the normal allowance shall be allowed where a concern claims such allowance on account of double shift working and establishes that it has worked double shift. An extra allowance up to a maximum of an amount equal to the normal allowance, instead of one-half of the normal allowance, shall be allowed where a concern claims such allowance on account of triple shift working and establishes that it has worked triple shift.”
4. From a reading of the aforesaid Rules, it would appear that an extra depreciation allownace in addition to normal depreciation allowance is admissible in certain cases. Although the nomenclature in one case is “extra depreciation” and in another case “extra shift depreciation”, both are depreciation allowances allowable in addition to normal depreciation and an assessee cannot claim both the aforesaid depreciations. An approved hotel on the one hand and factories and other concerns on the other have been separately dealt with for allowance of extra allowance. Extra depreciation allowance which is called as “extra allowance” is admissible on machinery or plant installed in an approved hotel. This allowance is in addition to the normal depreciation allowance in respect of machinery and plant installed in a hotel irrespective of the period of its actual user during the previous year.
5. An extra allowance known as “extra shift depreciation allowance” shall be allowed where a concern claims such allowance on account of double shift working and establishes that it has worked double shift. An extra allowance is also available where a concern claims such allowance on account of triple shift working and establishes that it has worked triple shift.
6. The contention of learned counsel for the assessee is that the hotel works triple shift and there is no justification for denying the extra shift depreciation allowance to a hotel. According to him, all hotels will be entitled to extra shift allowance depending on whether the hotel works double or triple shift. But the approved hotels are entitled to a further benefit by way of extra shift depreciation allowance. In our view, the contention of the assessee cannot be accepted.
7. Prior to the assessment year 1970-71, extra shift allowance was admissible if the assessee had claimed and proved to the satisfaction of the Income-tax Officer that a concern for which the allowance was claimed had actually worked double or triple shifts, as the case may be. No such extra allowance for multiple shift was admissible in respect of machinery or plant against which the letters “N.E.S.A” appeared in the depreciation schedule. This extra shift depreciation allowance in addition to the normal allowance of depreciation is also allowable from the assessment year 1970-71.
8. But, extra depreciation in respect of the machinery and plant installed in premises used by an Indian company as an approved hotel was introduced with effect from the assessment year 1970-71. Whatever might have been the position prior to the assessment year 1970-71, it has been made clear that machinery and plant installed in an approved hotel does not qualify for the extra shift depreciation allowance, but is entitled to an extra allowance.
9. When there is a general enactment as well as a special enactment in respect of the same head in a statute, the particular or special enactment would override the general enactment.
10. In our view, extra shift depreciation allowance under sub-item (iv) is not allowable in the case of approved hotels as extra allowance alone is allowable for such approved hotels. Item (iii) is a special provision for approved hotels and item (iv) is a general provision for other concerns. Extra shift depreciation allowance which is a general provision applicable to concerns and factories other than approved hotels is, therefore, not allowable in the case of approved hotels which are governed by the special provision.
11. The expression “extra shift” goes with the factory or the concern which may work day shift as well as night shift. The concept of shift working of the machinery and plant in a hotel may not arise. By the Finance (No. 2) Act of 1980, a new clause (iia) in section 32(1) has been inserted providing for further deduction by way of additional depreciation in an amount equal to 50% of the normal depreciation excluding extra shift depreciation and extra depreciation allowance for approved hotels. Machinery or plant installed in hotels will qualify for deduction on account of additional depreciation if other conditions laid down in this behalf are fulfilled. From the aforesaid sub-clause (iia) of section 32(1), it will be evident that extra allowance for double or multiple shift working of the machinery or plant is not available to an approved hotel. The said clause reads as follows:
“In the case of any new machinery or plant (other than ships and aircraft) which has been installed after the 31st day of March, 1980, but before the 1st day of April, 1985, a further sum equal to one-half of the amount admissible under clause (ii) (exclusive of extra allowance for double or multiple shift working of the machinery or plant and the extra allowance in respect of machinery or plant installed in any premises used as hotel) in respect of the previous year in which such machinery or plant is installed or, if the machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year”
Provided that no deduction shall be allowed under this clause in respect of—
(a) any machinery or plant installed in any office premises or any residential accommodation;
(b) any office appliances or road transport vehicles; and
(c) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any one previous year”.
(Emphasis* supplied)
12. We may also add that an approved hotel has been separately dealt with for the purpose of allowance of development rebate.
13. On a consideration of the scheme of the Act and the Rules and the facts and circumstances of this case, we are of the view that an approved hotel cannot claim extra shift allowance in addition to extra allowance. An extra shift allowance is for double or multiple shift working of the machinery and plant in a factory or concern, whereas extra allowance is allowable only in respect of machinery and plant installed in an approved hotel. For the foregoing reasons, we answer the question in the affirmative and in favour of the Revenue. There will be no order as to costs.
Bhagabati Prasad Banerjee, J.:— I agree.