INDIA CINE AGENCIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE common question of law referred to for the opinion of this Court is as follows:

(2.) THE assessment years are 1986-87 and 1987-88. THE assessee is a dealer in photographic colour papers. It imported photographic colour papers in jumbo rolls. THE width of the said paper is 1.511 meters and the length of the same ranges from 3100 meters to 3250 meters. After importation in jumbo rolls, the assessee cut the same into photographic flats and rolls of the desired size in a dark air conditioned humidity controlled dust proof room with the help of slitting machine. THE assessee sells the photographic colour papers to the dealers in the form of small rolls or cut sizes. THE photographic paper wound as smaller rolls are of the size ranging from 3.5" x 275'/575'/775' to 20" x 275'. Likewise, the cut size are also of different measurements ranging from 34"x54" to 30"x40". THE number of cut sheets ranges from 10 to 200 sheets per packet.

(3.) SECTION 32A provides for investment allowance in respect of a ship or an aircraft or machinery or plant specified in sub-section (2), which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section, be allowed a deduction, in respect of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed or, if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, of a sum by way of investment allowance equal to twenty-five per cent of the actual cost of the ship, aircraft, machinery or plant. Sub-section (2) of SECTION 32A to which a reference is made in sub-section (1) provides as follows: