Revenue expenditure, depreciation and gratuity deductions for cinema theatres were all allowed in the assessee's favour.

Expenditure on carpets and screens used in cinema theatres was treated as revenue in nature and therefore allowable, following the court's earlier view in the assessee's own case. Depreciation at 15% on partition works and false ceilings was also allowed, the issue having already been concluded on the same basis for an earlier assessment year. The provision made for gratuity payable to employees was deductible, consistent with the court's earlier ruling later affirmed by the Supreme Court. All referred questions were answered in favour of the assessee, with no costs awarded.

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Issues: (i) Whether 50% of the expenditure incurred for providing carpets and screens in cinema theatres was allowable as revenue expenditure; (ii) whether depreciation at 15% was allowable on the cost of partition works and false ceilings; and (iii) whether the provision made for gratuity payable to employees was deductible.

Issue (i): Whether 50% of the expenditure incurred for providing carpets and screens in cinema theatres was allowable as revenue expenditure.

Analysis: The question was covered by the earlier decision of the Court in the assessee's own case for the preceding assessment year, and the Revenue accepted that the same view governed the present year.

Conclusion: The issue was answered in favour of the assessee.

Issue (ii): Whether depreciation at 15% was allowable on the cost of partition works and false ceilings.

Analysis: The matter stood concluded by the earlier decision of the Court in the assessee's own case for an earlier assessment year, and the Revenue accepted that the same result followed.

Conclusion: The issue was answered in favour of the assessee.

Issue (iii): Whether the provision made for gratuity payable to employees was deductible.

Analysis: The issue was governed by the Court's earlier view, later affirmed by the Supreme Court, that such a provision was allowable as a deduction.

Conclusion: The issue was answered in favour of the assessee.

Final Conclusion: All the referred questions were answered in favour of the assessee, and no costs were awarded.

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