THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA REFERRED CASE No.48 of 1999 Dated:08.12.2011 Between: Commissioner of Income Tax, A.P.I, Hyderabad. …Applicant and Shri N.Mohana Krishna, Hyderabad. …Respondent THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA REFERRED CASE No.48 of 1999 ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) In this Referred Case at the instance of the Commissioner of Income Tax, the Income Tax Appellate Tribunal, Hyderabad Bench “B”, referred the following question for the opinion of this Court. Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the theatre building should be treated as ‘plant’ for the purpose of higher depreciation? The brief facts are as follows. The assessee is an individual owning a theatre and carrying on business mainly in exhibition of feature ﬁlms, profession as Cinematographer and was also deriving share income from partnership ﬁrms. For the assessment year 1988- 1999 the assessee ﬁled returns of income and claimed depreciation at the rate of 33-1/3% on theatre building. The Assessing Oﬃcer allowed depreciation on theatre building at 10% as against the assessee’s claim of 33- 1/3%. The appeal ﬁled by the assessee was allowed. On further appeal by the Department, the Tribunal upheld the order of the Commissioner of Income Tax and dismissed the department’s appeal. The order of the Tribunal, not being acceptable to the Revenue, the present application is ﬁled at their instance. The question referred for the opinion of this Court is covered by the judgment of the Supreme Court in Commissioner of Income Tax v Anand Theatres[1]. Therein the Supreme Court considered the question whether a hotel or cinema theatre can be considered to be an apparatus or tool for running the business so that it can be termed as a ‘plant’ and depreciation can be allowed accordingly or whether it remains ‘building’ wherein either hotel business or business of cinema could be conducted. After referring to various provisions and relevant case law, the Supreme Court held that the building used as cinema theatre cannot be given beneﬁt of depreciation as a ‘plant’. In view of the decision of the Supreme Court in Anand Theatres the question is answered in the negative in favour of the Revenue and against the assessee. The Referred Case is disposed of accordingly. _______________ (V.V.S.RAO, J) ____________________ (B.N.RAO NALLA, J) 08.12.2011 vs [1] (2000) 244 IT R 192