EAST INDIA HOTELS LTD., CALCUTTA vs COMNR. OF INCOME TAX, CALCUTTA

The Supreme Court addressed two questions under Section 256(2) of the Income Tax Act regarding the Appellate Tribunal's cancellation of the Commissioner of Income-tax's order under Section 263 for the assessment year 1977-78. The Court held that the Tribunal was correct in allowing extra depreciation and extra shift depreciation allowances, contradicting the High Court's earlier ruling in S.P. Jaiswal Estates Private Limited v. Commissioner Income Tax. The Court emphasized that the concept of double shifts is applicable to factories, not hotels, thereby overturning the High Court's interpretation.