J.V.Gupta, J.

1. The facts giving rise to this reference are these : The assessee is a registered firm. The assessment relates to the year 1969-70, for which the accounting year ended on 31st March, 1969. The assessee purchased a cinema in 1958 for a sum of Rs. 1,62,000. At the time of its purchase, the cinema building was an old one. The assessee carried on exhibition business in this cinema building from year to year. By a letter dated 19/20th July, 1968, the Executive Engineer, Jind Provincial Division, Jind, after inspecting the cinema building informed the District Magistrate, Jind, that the ceiling was sagging at various places and some of the wooden members needed to be changed. This needed replacement or repairs immediately. In view of the defects pointed out by the Executive Engineer, the assessee carried on some repairs. A sum of Rs. 24,000 was, inter alia, spent for the purpose of fixing a false ceiling. This amount was treated as capital expenditure by the ITO, but on an appeal by the assessee, the AAC held that the cost of repairs and replacement of false ceiling was of a revenue nature. He, therefore, accepted the assessees contention and deleted the amount of