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Judgment
AR UN KUMAR, J.
Under s. 256C) of the Income Tax Act, 1961 (for short ''the Act''), the Tribunal has referred the following question of law in respect of the assessment year 1970-71, for the opinion of this Court :
"Whether the seats installed in the cinema auditorium constitutes plant within the meaning of s. 43(3) and whether the assessed is entitled to development rebate in respect thereof under s 33 of the Act, 1961 ?"
The question whether the chairs installed in an auditorium could be treated as "plant" within the meaning of s. 43(3) of the Act and whether the assessed was entitled to claim development rebate in respect thereof, u/s 33 of the Act, came up for consideration before the Bombay High Court in Commissioner of Income Tax Vs. N.L. Mehta Cinema Enterprises Pvt. Ltd., and relying on a decision of the Supreme Court in Commissioner of Income Tax, Andhra Pradesh Vs. Taj Mahal Hotel, Secunderabad, and on a decision of the Karnataka High Court in Santosh Enterprises Vs. Commissioner of Income Tax, , the Court held that the chairs in the auditorium of a cinema theatre are "plant and the assessed was entitled to development rebate in respect of them. While holding so, the Court observed that the chairs and the auditorium are essentially functional in nature, being integral part of the exhibition of films.
Following the ratio of the said decision, with which we are in respectful agreement, we answer the question in the affirmative i.e., in favor of the assessed and against the department.
There will be no order as to costs.