Films produced for advertisement purposes are not stock-in-trade in the hands of the advertisers. - Income Tax - 626/CBDT

INSTRUCTION NO. 626/CBDT Dated : October 15, 1973 Section(s) Referred: 37 Statute: Income - Tax Act, 1961 The Board has recently considered the question relating to the treatment of the cost of advertisement films produced for publicity purposes in computing the income under the provisions of the Income-tax Act. 2. I am directed to say that the Board is of the view that short films produced for advertisement purposes are not stock-in-trade in the hands of the advertisers. These films are just like any other publicity material. The advertisement expender are current expenditure incurred for carrying on of a business. The Board is, therefore, of the view that any expenditure incurred on making an advertisement film by a person carrying on a business will be admissible as deduction u/s 37 of the Income-tax Act, 1961 to the extent permissible under rule 6B of the Income-tax Rules, 1962. 3. The above instructions may please be brought to the notice of all the Income-tax Officers working under your.