Law: Income Tax Act, 1922

Section: 26A,23,

Law: Income Tax Rules, 1922

Section: 2(2)

Income-tax Act, 1922 -- Sections 10, 26A -- Depreciation on film -- Mode of allowance -- Registration application filed out of time -- Rightly rejected - Corresponding Sections: Income-tax Ordinance, 1979 -- Section 68 -- JUDGMENT (The judgment was delivered by S. A. HASSAN, Member).-The above-noted appeal (I. T. A. No. 1430) arises out of the appellant's assessment made for the charge year 1957-58 and the other appeal (I. T. A. No. 31) is laid against the Appellate Assistant Commissioner's order dated 3-12-1956 upholding the order of the Income-tax Officer refusing registration of the firm under section 26A for the same charge year, viz., 1957-58. 2. The solitary objection pressed at the hearing of appeal is that the Appellate Assistant Commissioner has erred in not deducting full amortisation allowance and in upholding the Income-tax Officer's allowance of Rs. 2,60,769 whereas the appellant was entitled to a further allowance of Rs. 1,18,581 or at least Rs. 67,414 as per claim put forth at the hearing. 3. The facts of the case as put forward by the appellant, who is a film-producer, are that the production of the picture 'I' was started on 14-11-55 and it was released on 12-5-56. Cost of this picture was Rs. 3,99,863 out of which the Income-tax Officer disallowed Rs. 20,531 on account of inadmissible items. The net cost was thus assessed at Rs. 3,79,332. Contracts about distribution or exhibition were, however, entered into earlier with various parties either for distribution on agency basis or for its out-right sale. There were altogether five circuits out of which only one circuit was operated under an agreement of distribution on agency basis, i.e.. East Pakistan. About the other four circuits the picture was in the 2nd year and on out-right sale basis. The position of receipts from the various contracts of distribution, etc., has been summarised as under:- 1955-56 1956-57 1957-58 Total Rs. (1) P. Karachi, for Karachi, Sind, & Baluchistan: First agreement dated 17-8-55 minimum guarantee for seven years Rs.75,000, 2nd agreement dated 12-2-57. Outright sale on receipt of Rs.17,500 besides Rs.34,350 received Rs. Rs. Rs. brfore the agreement. 75,000 21,850…

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