Madras H.C : Whether, on the facts and in the circumstances of the case, Rs. 34,008, being 50per cent of the expenditure incurred by the assessee for providing carpets and screens in the two cinema theatres is to be allowed as revenue expenditure for the asst. yr. 1972-73 ?

Mrs. Nalini Chidambaram & C.V. Rajan, for the Revenue : P.P.S. Janarthana Raja & Subbaraya Aiyar, Padmanabhan & Ramamani, for the Assessee

M. N. CHANDURKAR, C. J.:

At the instance of the Revenue, the following three questions have been referred to this Court under s. 256(1) of the IT Act:

“1. Whether, on the facts and in the circumstances of the case, Rs. 34,008, being 50per cent of the expenditure incurred by the assessee for providing carpets and screens in the two cinema theatres is to be allowed as revenue expenditure for the asst. yr. 1972-73 ?

Whether, on the facts and in the circumstances of the case, the assessee is entitled to depreciation at 15per cent of Rs. 4,27,967, being the cost of the partition works and false ceilings for the asst. yr. 1972-73 ?

Whether, on the facts and in the circumstances of the case, the assessee is entitled to deduction of Rs. 9,680, being provision made for gratuity payable to its employees ?”

2. Counsel for the Revenue fairly concedes that, in view of the decision of this Court in CIT vs. Indian Metal and Metallurgical Corporation (1983) 35 CTR (Mad) 103:(1983) 141 ITR 40 (Mad) for the earlier asst. yr. 1971-72, questions Nos. 1 and 2 have to be answered in favour of the assessee. In so far as question No. 3 is concerned, learned counsel for the Revenue also fairly concedes that that question has also to be answered in favour of the assessee in view of the decision of this Court in CIT vs. Andhra Prabha (P) Ltd. (1980) 14 CTR (Mad) 269:(1980) 123 ITR 760 (Mad), which view is now confirmed by the Supreme Court in the decision in CIT vs. Andhra Prabha (P) Ltd. (1986) 54 CTR (SC) 313:(1986) 158 ITR 416 (SC). Accordingly, the three questions are answered as follows :

Question No. 1 In the affirmative and in favour of the assessee.

Question No. 2 In the affirmative and in favour of the assessee.

Question No. 3 In the affirmative and in favour of the assessee.

No order as to costs.

[Citation :182 ITR 460]