ORDER The Income Tax Appellate Tribunal, Allahabad, has referred the following question of law under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for opinion to this Court:
"Whether, on the facts and in the circumstances of the case, the Tribunal was, in law, justified in confirming the CIT (Appeals) finding that the assessee was entitled to investment allowance under section 32A of the Act on the entire cinema machinery ?"
2. Briefly stated the facts giving rise to the present reference are as follows:
2. Briefly stated the facts giving rise to the present reference are as follows:
The reference relates to the assessment years 1982-83 and 1983-84. The respondent-assessee is a partnership firm. It is engaged in the business of running a cinema hall and also letting out of theatre. For the assessment year in question, the respondent-assessee claimed investment allowance under section 32A of the Act on the entire cinema machinery including electric generator. The assessing officer had allowed the investment allowance only in respect of the electric generator but declined to allow investment allowance on the rest of cinema machinery. Feeling aggrieved, the respondent-assessee preferred an appeal before the Commissioner (Appeals) who had allowed the appeal by following its earlier order dated 31-10-1988 and directed the assessing officer to allow the investment allowance at the prescribed rate on the entire cinema machinery. Feeling aggrieved the revenue preferred appeal before the Tribunal. The Tribunal has confirmed the order passed by the Commissioner (Appeals).
3. We have heard Shri Shambhu Chopra, the learned standing counsel for the department and Shri Shakeel Ahmed, learned counsel, appearing for the respondent-assessee. The learned standing counsel submitted that in a cinema theatre no article or thing is produced or manufactured and, therefore, it is not an industrial undertaking within the meaning of section 32A of the Act. Reliance was placed on the decision of the Apex Court in the case of Delhi Cold Storage (P) Ltd. v. CIT(1991) 191 ITR 6561 wherein the Apex Court has held that even in a cold storage no article or thing is produced and therefore, the cold storage is not an industrial undertaking within the meaning of section 32A of the Act.
3. We have heard Shri Shambhu Chopra, the learned standing counsel for the department and Shri Shakeel Ahmed, learned counsel, appearing for the respondent-assessee. The learned standing counsel submitted that in a cinema theatre no article or thing is produced or manufactured and, therefore, it is not an industrial undertaking within the meaning of section 32A of the Act. Reliance was placed on the decision of the Apex Court in the case of Delhi Cold Storage (P) Ltd. v. CIT(1991) 191 ITR 6561 wherein the Apex Court has held that even in a cold storage no article or thing is produced and therefore, the cold storage is not an industrial undertaking within the meaning of section 32A of the Act.
4. The learned counsel appearing for the respondent could not dispute this proposition. The case of cinema theatre cannot be placed on a higher pedestal than that of a cold storage. It is well-known that in cinema hall people go to see film for getting entertainment and no article or thing is produced therein. Thus, plant and machinery installed in the cinema hall is not entitled for any investment allowance as the cinema hall cannot be said to be an industrial undertaking. The principle laid down by the Apex Court in the case of Delhi Cold Storage (P.) Ltd. (supra) is squarely applicable in the present case also.
4. The learned counsel appearing for the respondent could not dispute this proposition. The case of cinema theatre cannot be placed on a higher pedestal than that of a cold storage. It is well-known that in cinema hall people go to see film for getting entertainment and no article or thing is produced therein. Thus, plant and machinery installed in the cinema hall is not entitled for any investment allowance as the cinema hall cannot be said to be an industrial undertaking. The principle laid down by the Apex Court in the case of Delhi Cold Storage (P.) Ltd. (supra) is squarely applicable in the present case also.
5. Respectfully following the afore said judgment, we answer the question referred to us in negative, i.e., in favour of the revenue and against the assessee. There shall be no order as to costs.
5. Respectfully following the afore said judgment, we answer the question referred to us in negative, i.e., in favour of the revenue and against the assessee. There shall be no order as to costs.