SANTOSH ENTERPRISES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN these references made under S. 256(1) of the IT Act, 1961 ("the Act"), the Tribunal, Bangalore Bench, has referred the following common questions of law for the opinion of this Court :

(2.) THE brief facts giving rise to the above questions are as follows :

(3.) THE assessee's case is that the cinema building in question is a construction which cannot be used for any purpose other than the show business which necessitates the construction of a lounge, an auditorium with a false ceiling, screens, balconies and terraced floorings. The walls of the building have to be constructed using specific materials as to play a very active role in exhibition of cinema and hence the whole cinema house including the entire structure with furniture and fittings and other material used therein constitutes plant. The plant and the building, according to the assessee, therefore, are not mutually exclusive. The auditorium with all the contents therein is the tool with which the show business of the assessee is carried on and not merely the premises in which the assessee's trade and business are carried on.