Extra shift depreciation allowance is calculated with reference to the actual number of days on which the extra shifts had worked during the previous years. Contribution towards road development is a capital expenditure and not admissible as a deduction in computing business income.

( 1 ) BY this Reference under Section 66 (1) of the Indian Income-tax Act, 1922, the Income-tax Appellate Tribunal has referred the following two questions to this Court, namely:--"i. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that extra shift depreciation allowance in the case of the assessee company must also be calculated with reference to the actual number of days on which the extra shifts had Worked during the previous years to the assessment years 1958-59 and 1959-602

( 2 ) WHETHER on the facts and in the circumstances of the case, the Tribunal was right in holding that the contribution of Rs. 19,220/- made by the assessee company towards road development was a capital expenditure and as such not admissible as an expenditure in computing its business income for the assessment year 1959-60?"2. The assessee is a company deriving income from certain sugar Mills in the Uttar Pradesh. The assessment years involved are 1958-59 and 1959-60, the corresponding previous years being the years ending on the 31st October, 1957 and the 31st October 1958 respectively. For both these years the assessee company claimed extra shift depreciation allowance equal to the normal depreciation in respect of the machinery and plant utilised in the sugar manufacturing business. There is no dispute that the assessee's factories are seasonal factories which worked only during that part of the year when sugar cane is available. The Income-tax Officer disallowed Rs. 12,259 in the first year and Rs. 15,898 in the second year out of this claim for extra shift allowance. The disallowance was upheld in appeal by the Appellate Assistant Commissioner and also on further appeal by the Tribunal.

( 3 ) FOR the assessment year 1959-60, the assessee claimed deduction of a sum of Rs. 19,220, being the amount contributed by the assessee company to a Cooperative Society for the purpose of development of the roads giving access to the factories of the assessee company as well as other sugar mills of the locality. The Tribunal has stated that as a result of a conference of the representatives of the State Government, the cane growers and the sugar factory owners held at Nainital sometime in June 1954, a cooperative Society was formed for the purpose of taking up development of roads in the area. These roads were constructed by the Co-operative Society partly on land owned by the assessee company but were meant for common use by the cane growers as well as for transport purposes of the factory owners.

( 4 ) THE claim for deduction of this amount was rejected by the Income-tax Officer as he was of the opinion that the expenditure was a capital expenditure. But he allowed rebate under Section 15b of the Act. The Appellate Assistant Commissioner, on appeal by the assessee, concurred with this view of the Income-tax Officer, On further appeal by the assessee to the Tribunal, the Tribunal was of the opinion that as the roads were of substantial construction and as, on the assessee's own admission, at least a part of such net-work of roads fell within the area comprising the assessee's mills, though the roads might not literally belong to the assessee, the contributions made towards the development of such roads were evidently of a capital nature. The Tribunal accordingly rejected the assessee's appeal,

( 5 ) AT the instance of the assessee the questions mentioned above have been referred to this Court by the Tribunal.

( 6 ) ALLOWANCE for depreciation for plant and machinery used for the purposes of the business is provided for in Section 10 (2) (vi) of the Act. In respect of depreciation of such buildings, machinery, plant or furniture, being the property of the assessee, a sum equivalent to such percentage on the written down value thereof as may in any case or class of cases be prescribed is allowable as deduction. The conditions for the allowance and the percentages are prescribed in Rule 8 of the India