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TMI Blog1985 (10) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner (Appeals) was not justified in confirming the disallowance of the claim in this regard by the ITO. The facts in this regard, the rival submissions and our conclusion thereon, are briefly set out hereunder. 2. The assessee is a cinema theatre exhibiting cinematograph films. investment allowance under section 32A in the sum of Rs. 1,75,909 was claimed in respect of the projection equipment installed in the theatre. The ITO disallowed the claim on the ground that the assessee was not engaged in the manufacture or production of any article or thing, as required in sub-section (2)(b)(iii). On appeal it was contended before the Commissioner (Appeals), that, in the process of exhibition of films, high velocity rays produced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence. The same has a commercial value and, therefore, it constitutes an article or thing, as referred to in sub-clause (iii). Our attention was invited to sub-clause (iii) of sub-section (2)(b), which by specific mention, disentitles articles or things specified in the list in the Eleventh Schedule of the Act from investment allowance. Developing the argument, it was submitted, that the exclusion was in respect of cinematograph films and projectors and not in respect of the pictures projected on the screen, which would also constitute an article or thing. Reference was made to the decision of the Nagpur Bench of the Tribunal in the case of Fourth ITO v. Dr. E. U. Mane [1982] 1 ITD 648, wherein it was held that the impregnation of unexposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 32A(2)(b)(iii) or generation or distribution of electricity or any other form of power as is referred to in section 32A(2)(b)(i). For coming to this conclusion we set out our reasons hereunder. The assessee's business consists of projection of cinematograph films on to a screen. The question is whether the reproduction of the picture on the screen by means of projection would constitute manufacture or production of any article or thing. We are of the opinion that in the process no new article or thing is manufactured or produced. The expression 'articles or things' is not defined in the Act. As mentioned in the decision in Daks Copy Services (P.) Ltd.'s case these words are synonymous with the expression 'goods'. The Concise Oxford ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entitled to section 32A allowance. In the instant case the argument of the assessee is even weaker, as no concrete object or thing is produced by cinematograph film during the course of its exhibition except by way of leaving certain mental impressions of a varying degree which would fade into nothingness quite soon. 7. In the decision relied upon on behalf of the assessee in Dr. E. U. Mane's case the facts are quite distinguishable. In that case a radiologist-cum-medical practitioner was impregnating unexposed X-ray films with the body of the patients exposed to the X-ray for purposes of diagnosis. Prior to the X-ray film being exposed it was only a raw film. Subsequent to the exposure it had got converted into a new article or thing i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance under section 32A, it is incomprehensible to contend that the mere projection of a film on to a screen would be entitled to this allowance on the ground that such an activity constituted production or manufacture of an article or thing. There is no need to labour this argument any further inasmuch as, by excluding cinematograph films and projectors from the purview of section 32A, all other activities associated with exhibition of films also are automatically excluded from the purview of this allowance. We are, therefore, satisfied that there is absolutely no basis in the assessee's stand in this behalf with reference to section 32A(2)(b)(iii). 9. Adverting to the other alternative argument that the assessee was engaged in the genera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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