ORDER
1. Following questions of law have been referred for our opinion by the Tribunal, Chandigarh Bench, Chandigarh, arising out of its order dt. 4th March, 1994 in ITA No. 1226/Chd/1987 in respect of asst. yr. 1983-84 and order dt. 11th May, 1994 in ITA Nos. 133/Chd/1988 and 1360/Chd/1987 in respect of asst. yr. 1984-85:
For asst. yr. 1983-84, ITA No. 1226/Chd/1987
1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing claim of the assessee for Rs. 8,30,871 on account of ‘Leave with wages’ and ‘Leave with salary’ in spite of the fact that these were simply a provision and a contingent liability ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding the refinery unit at Madras as industrial undertaking for the purpose of investment allowance ?
For asst. yr. 1984-85, ITA No. 133/Chd/1988
1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing assessee’s claim of Rs. 6,78,225 as leave with wages and of Rs. 1,60,229 as leave with salary in spite of the fact that it was simply a provision and a contingent liability ?
ITA No. 1360/Chd/1987
1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing normal depreciation on building and machinery in Madras refinery unit which was not at all used for the purposes of business throughout the year under consideration ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing extra shift allowance on storage tanks and cooling tower in the refinery unit ?
3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing investment allowance on transformer and welding set, which are obviously electric appliances ?
2. We have heard learned Counsel for the parties.
3. Learned Counsel for the assessee points out that first question in respect of asst. yr. 1983-84 (ITA No. 1226/Chd/1987) as well as in respect of asst. yr. 1984-85 (ITA No. 133/Chd/1988) stands covered by judgment of Hon’ble the Supreme Court in Bharat Earth Movers v. CIT , which was followed even in assessee’s own case in CIT v. Oswal Woollen Mills Ltd. . No contrary view has been shown on behalf of the Revenue. Accordingly, following the said judgment, we answer this question in favour of the assessee and against the Revenue.
4. As regards question No. 2 in respect of asst. yr. 1983-84, it is submitted by learned Counsel for the assessee that in the case of the assessee for the earlier assessment year, this Court has already answered a similar question in favour of the assessee and against the Revenue in CIT v. Oswal Woollen Mills Ltd. (2002) 175 CTR (P&H) 184 : (2002) 257 ITR 737 (P&H). This is not disputed by learned Counsel for the Revenue. Following this view, we answer this question in favour of the assessee and against the Revenue.
5. As regards first question in ITA No. 1360/Chd/1987, reliance is placed on judgment of this Court in CIT v. Pepsu Road Transport Corporation , taking the view that the machinery which is kept ready for use but may not be actually used, will qualify for normal depreciation as there is normal depreciation of value even when a machine is merely kept in a store. It is pointed out that this judgment has been followed by the Allahabad High Court in CIT v. Swarup Vegetable Products India Ltd. . No contrary view has been shown on behalf of the Revenue. Accordingly, following judgment of this Court in Pepsu Road Transport (supra), we answer this question in favour of the assessee and against the Revenue.
6. In respect of question No. 2 in ITA No. 1360/Chd/1987, it is pointed out that in the case of the assessee, for the previous year, extra shift allowance has been allowed on storage tank and cooling tower in the refinery unit, in Oswal Woollen Mills Ltd. (supra). Following the said view, we answer this question in favour of the assessee and against the Revenue.
7. As regard to question No. 3 is concerned, as is evident from a perusal of the order passed by the Tribunal and also the statement of case, the Tribunal relied upon the order passed by it for the asst. yr. 1981-82 for accepting the claim of the assessee and since the question similar to above was referred to this Court for the asst. yr. 1981-82, the present question was also referred. While deciding IT Ref. No. 56 of 1988 today for the asst. yr. 1981-82 reported as CIT v. Oswal Woollen Mills Ltd. (2006) 206 CTR (P&H) 137–Ed., the question stands answered in favour of the assessee and against the Revenue. Counsel for both the parties are agreed that following the said order, this question may also be answered in favour of the assessee and against the Revenue. We order accordingly.
References are disposed of in the above terms.