2002 (7) TMI 75 - HC - Income Tax

Investment Allowance, Cinema Theatre - Whether, on the facts and circumstances of the case, the Appellate Tribunal was justified in holding that the appellant was not entitled to claim any investment allowance on the projector and air-conditioning plant installed during the relevant previous year? The point that arises in the tax case is whether the assessee, a cinema theatre, is entitled to claim investment allowance in respect of the air-conditioning plant as well as on the projector installed by it in the theatre. - We, therefore, hold that the Tribunal was correct in holding that the assessee is not entitled to claim investment allowance on the projector as well as air-conditioning plant installed in the cinema theatre. Accordingly, the question of law referred to us is answered against the assessee and in favour of the Revenue.

Summary

The High Court of Madras ruled that a cinema theatre is not entitled to claim investment allowance on a projector and air-conditioning plant installed, as they do not qualify for the deduction. The court stated that the primary function of the cinema projector is not to manufacture or produce any article, and the air-conditioning plant is installed for the comfort of spectators, not for production purposes. The decision was based on a similar precedent and the question of law was answered against the assessee in favor of the Revenue.