Law:

Section:

Rule 9A of the Income-tax Rules, 1962 - Deduction - In respect of expenditure on production of feature films Where assessee's claim relates to exhibition of old movies, assessee's claim for deduction would fall for consideration only under rule 9B and not under rule 9A Rule 9A prescribes deductions in respect of expenditure on the production of feature films. Rule 9B deals with the deduction available in respect of expenditure on acquisition of distribution rights of feature films. While rule 9A concerns itself as to the case of the film producers, rule 9B is about film distributors, a stage after the production of the film. A reading of rule 9B(1) with the Explanation thereto leaves no room for doubt that it intends to deal with films coming for exhibition after their release for the first time. There is no merit in the contention that rule 9B is relatable to new films and that there is no reference to relate same to old films. Where the case related to exhibition of old movies, the assessee's claim for deduction would fall for consideration only under rule 9B. Thus, where it was found that the assessee had no intention to exploit the films and these films were lying idle with the assessee's sister concern and that these films were purchased at a cost higher than what was paid by the sister concern, the Tribunal was right in confirming the findings of the assessing authority that since the films were not exploited during the year, the entire cost of acquisition of these films was to be carried forward as per rule 9B(4) and the assessee's claim for the loss from the movies was not allowable. V. S. Jayakumar for the Appellant. Murali Kumaran for the Respondent. JUDGMENT Mrs. Chitra Venkataraman, J. - This Tax Case (Appeal) is preferred by the assessee against the order of the Income-tax Appellate Tribunal relating to the assessment year 1987-88. In the grounds of appeal, the assessee raised five questions of law. Except the one on the question of capital gains arising out of the sale of an immovable property at 35, Nungambakkam High Road, Chennai, four questions of law were admitted by this court under order dated April 23, 2004. It is stated that subsequent to…

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