TMI Blog2000 (9) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the facts and circumstances of the case, the Tribunal was correct in law in taking the view that the Income-tax Officer's order had merged in the appellate order and, therefore, the revision order could not be passed ?" The factual background leading to the above reference is as under : The assessee has taxable income from the business of a running theatre in the name and style of Shashi Theatre Private Limited, Mehsana. In his return for the assessment year 1980-81, he claimed investment allowance under section 32A of the Income-tax Act for the following items : Items Rs. (1) Plaster of paris 48,043 (2) Machinery 1,60,831 (3) A. C. plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, plaster of paris, acoustics and intercom telephone are not coming within the definition of the term 'plant and machinery' and hence investment allowance is not admissible thereon." After the decision on the appeal in favour of the assessee on his claim for investment allowance and grant of the same for all items, another Commissioner of Income-tax took up the matter in revision under section 263 of the Act stating that the order of the Assessing Officer to the extent of granting investment allowance for items-machinery, A. C plant, generator A. C. and electrical fittings was erroneous. The ground urged in support of the revision is that the cinema theatre owned by the assessee is not a 'small scale industry' to be eligible for investm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellate authority merely held that for other items there was no apparent reason for not granting the investment allowance. It is argued that the aspect of the matter as to whether a theatre, being not a small scale industry, any investment allowance was admissible or not, was not a question directly considered or decided by the apex court. On behalf of the Revenue, reliance is placed on the decision of this court in the case of CIT v. Paushak Limited [1997] 227 ITR 216. After carefully considering the contentions, advanced by learned counsel for the parties, we have formed an opinion that the present case is distinguishable on the facts from the decision of this court in the case of Paushak Limited [1997] 227 ITR 216 and the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,00,171 was allowed. The Commissioner of Income-tax (Appeals) then holds that in view of grant of investment allowance for the aforesaid sum on the abovementioned items, there was no justification or reason not to allow the investment allowance for the other items, such as furniture, acoustics and plaster of paris. On a plain reading of the order of the Commissioner of Income-tax (Appeals) in paragraph 3, the contention advanced on behalf of the Revenue cannot be accepted that the subject-matter of grant of investment allowance to the assessee for all the items including the disputed items under consideration before us, neither came up for consideration nor was decided by him. What we find is that for considering the grant of investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive legislation contained in clause (c) of the Explanation to section 263(1). As a result of the discussion aforesaid, the two questions referred to us are answered thus : In the facts and circumstances of the case, the Commissioner of Income-tax was not correct in law in withdrawing the allowance granted by the Income-tax Officer under power given under section 263 of the Income-tax Act. Our answer to question No. 2 is that irrespective of the doctrine of merger, in accordance with the last part of clause (c) of the Explanation to section 263(1), since to all items for grant of investment allowance, the appellate authority had given its due consideration and decision, therefore, the order of the assessing authority could not have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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