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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
M. Rama Jois and S. Rajendra Babu, JJ.
Commissioner of Income Tax —Appellant
Vs.
A.B. Kakatkar —Respondent
Income Tax Referred Cases No. 91 of 1987
Decided on : 16-01-1989
Plant - Income Tax Act - The court considered whether the entire cinema theatre, including various components inside and outside the auditorium, could be considered as 'plant' for the purposes of the Income Tax Act. The court held that certain parts of the theatre, such as the screening wall and ceiling of the auditorium, furniture, fittings, and fixtures, could be considered as 'plant' for the purposes of development rebate, while other parts of the building could not be included in the said term.
Fact of the Case:
The Tribunal remitted the matter to the Income Tax Officer to redetermine the depreciation admissible to the assessee, following its earlier decision in the case of Santosh Enterprises.
Finding of the Court:
The court held that certain parts of the theatre, such as the screening wall and ceiling of the auditorium, furniture, fittings, and fixtures, could be considered as 'plant' for the purposes of development rebate, while other parts of the building could not be included in the said term.
Issues: The main issue was whether the entire cinema theatre, including various components inside and outside the auditorium, could be considered as 'plant' for the purposes of the Income Tax Act.
Ratio Decidendi: The court's decision was influenced by its earlier decision in the case of Santosh Enterprises, where it held that certain parts of the theatre could be considered as 'plant' for the purposes of development rebate.
Final Decision: The court answered the question referred to it accordingly, holding that certain parts of the theatre could be considered as 'plant' for the purposes of development rebate.
S. Rajendra Babu, J.—In this reference under section 256(1) of the Income Tax Act, 1961, the following question is referred for our opinion :
"Whether, on the fact and in the circumstances of the case, the entire cinema theatre comprising each and every part of the theatre, whether it is within the auditorium portion of it or outside it, including false ceilings and wooden panelling of the auditorium, rolling shutters, fountain, mirrors, furniture and fixtures, etc., outside the auditorium is 'plant' for the purposes of the Act and that only certain parts of the theatre are plant ?"
2. The Tribunal, in this case, following its earlier decision in the case of Santosh Enterprises, remitted the matter to the Income Tax Officer to redetermine the depreciation admissible to the assessee. Against the order made in Santosh Enterprises' case, reference was made to this court in I. T. R. C. Nos. 184 to 187 of 1982 Santosh Enterprises Vs. Commissioner of Income Tax, (1993) 200 ITR 353 KAR and, in those cases also, a similar question had arisen for consideration and this court held that the screening wall and ceiling of the auditorium having been constructed with requisite installations so as to have a proper control of the sound effect and for the efficient screening of the films may be treated as part of "plant" but no other part of the building can be included in the said term. In so far as the furniture, fittings and fixtures consisting of wooden walls including false ceiling and wooden panelling of the walls and the chairs would also come within the purview of "plant" for development rebate. However, the case of the chairs outside the auditorium would be different and they cannot come within the definition of "plant".
3. Following the said decision, we answer the question referred to us accordingly.
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