Income-tax (27th Amendment) Rules, 2002 - 398/2002 - Income Tax

Income-tax (27th Amendment) Rules, 2002 NOTIFICATION NO. 398 Dated 20th December. 2002 In exercise of powers conferred by section 295, read with sub-section 7A and clause (da) of sub-section 14 of section 80-IB of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:- 1. (1) these rules may be called the Income-tax (27th Amendment) Rules, 2002. (2) They shall be deemed to have come into force on the 1st day of April, 2002. 2. In the Income-tax Rules, 1962, (a) after rule 18 DA, the following rule shall be inserted, namely: - "18DB- Prescribed area, facilities and amenities for multiplex theatres and particulars of audit report, for deduction under sub-section (7A) and clause (da) of sub-section 14 of section 80-IB (1) For the purpose of sub-section (7A) and clause (da) of sub-section 14 of section 80-IB, the multiplex theatre shall have the following area, facilities and amenities: - (a) The total built-up area occupied by all the cinema theatres comprised in the multiplex shall be not less than 22,500 square feet, and shall consist at least 50% of the total built-up area of the multiplex excluding the area specified for parking. (b) The multiplex theatres shall be comprised of at least three cinema theatres and at least three commercial shops. (c) Total seating capacity of all the cinema theatre comprised in the multiplex shall be at least 900 seats, and no cinema theatres should consist of less than 100 seats. (d) The total built-up area occupied by all the commercial shops comprised in the multiplex theatre shall be not less than 3000 sq, ft., and the minimum built-up area of each shop shall not be less than 250 sq. ft. (e) There shall be at least one lobby or foyer in the cinema theatres, whose area shall be at lest 3 sq. ft. per seat. (f) The multiplex theatre shall have adequate parking, toilet blocks and other public conveniences, as per local building or cinema regulations, and shall also fulfill all local building or cinema regulations in respect of fire and safety. (g) The cinema theatres comprised in the multiplex theatre shall use modem stereo projection systems with at least two screen speakers per screen and one surround speaker per 25 seats in a theatre. (h) The cinema theatres shall use seats with seat pitch not less than 20" (center to center). (i) Ticketing system employed by the cinema theatres shall be fully computerised. (j) The multiplex theatre cinema shall be centrally air-conditioned. Explanation.- For the purposes of this rule, the expression 'modern stereo projection systems' shall consist of xenon lamp, platter and digital sound systems. (2) A separate report of the audit, shall be furnished along with the return of income in respect of each eligible multiplex theatre, in Form Number, 10-CCBA and shall be duly signed and verified by an accountant as defined in the Explanation below sub-section (2) of section 288. (3) In the first year of the claim of deduction, the assessee shall enclose along with the audit report, a copy of approvals for exhibition of cinema given by various State or local authorities, which shall, where applicable, include the following:- (a) no-Objection-Certificate with respect to the location of the multiplex by the concerned licensing authority; (b) permission for construction of the multiplex by the concerned licensing authority; (c) permission to construct the building from the town planning authority or municipal corporation; (d) completion certificate or occupation certificate, as the case may be, from the town planning authority or municipal corporation, certifying the completion of the multiplex theatre, during the period commencing on the 1st day of April, 2002 and ending on the 31st day of March, 2005 and (e) operating license issued by the concerned licensing authority. (4) After the first year of claim of deduction, in the subsequent four years, the audit report shall be enclosed with the operating license issued from time to time, by the concerned licensing authority for exhibition of cinema." (b) In the Appendix II, after the Form number 10-CCB, the following shall be inserted, namely: - "FORM NO. 10CCBA [See Rule 18DB] 1. NAME OF THE ASSESSEE:______________ 2. PAN:_________________________________ 3. STATUS:______________________________ 4. SHARE IN THE OWNERSHIP OF THE MULTIPLEX. (a) FULLY OWNED BY ASSESSEE YES...NO... (b) PARTLY OWNED BY ASSESSEE YES....NO... (c) IF YES, PLEASE SPECIFY THE PERCENTAGE OF OWNERSHIP...... 5. NAME ADDRESS OF THE MULTIPLEX:........... 6. DATE OF COMMENCEMENT OF OPERATION BY THE-MULTIPLEX: 7. INITIAL ASSESSMENT YEAR:............. 8. APPROVAL FROM LICENSING AUTHORITIES UNDER THE STATE LICENSE REGULATION (ATTACH COPY OF APPROVAL): Approval Issuing authority Approval date No. (a) No-Objection-Certificate with respect to the location of the multiplex (b) Permission for construction of the multiplex. (c) Building permission (d) Completion certificate/occupation certificate (e) Operating license 9.TECHNICAL DETAILS OF MULTIPLEX THEATRE (i) Total built-up area of Multiplex theatre (excluding parking area): (ii) Total built-up area of all cinema theatres:________________ (iii) Theatre No. Built-up area Seats No. of surround speakers No. of screen speakers (1) (2) (3) (iv) Total built-up area of all shops: Shop No. Built-up area Business Air-conditioned (Y/N) (1) (2) (3) (V) No. of lobbies/foyer Floor area Air-conditioned (Y/N) (VI) Technical specification of cinema theatre (a) Whether theatres have stereo projection system with Xenon Lamp and platter YES..... NO....... (b)Whether theatres have stereo sound system. (Dolby, Digital or DTS) YES..... NO....... (c) Seat pitch (Centre to centre) (in inches):..................... d)Whether ticketing system is fully computerized: YES......NO....... e)Whether multiplex cinema theatre fie foyer/lobby are fully air-conditioned. YES...... NO........ 10. Details relating to computation of deduction Other sale of sale of Advertisement receipts Tickets eatables, etc receipts within the Cinema area (i) (Amount in rupees) Theatre 1........................... Receipts from Cinema Theatre 2........................... Theatre Theatre 3............................ (ii) Receipts from shops Shop 1:............. Shop 2:.............. Shop 3:............... Total.................. (iii) Other Receipts (iv) Profit derived from the business of building- owning-operating of multiplex theaters: (iv) Deduction u/s 80 IB (7A) Amount (in rupees) DECLARATION *1/WE HAVE EXAMINED THE BALANCE SHEET OF THE ABOVE MULTIPLEX THEATRE STYLED**................................ AND BELONGING TO THE ASSESSEE M/S........................ (PERMANENT ACCOUNT NO....................) AS AT............ AND THE PROFIT AND LOSS ACCOUNT OF THE SAID MULTIPLEX THEATRE FOR THE YEAR ENDED ON THAT DATE WHICH ARE IN AGREEMENT WITH THE BOOKS OF ACCOUNT MAINTAINED AT THE HEAD OFFICE AT............................................ AND BRANCHES AT......................... *I/WE HAVE OBTAINED ALL THE INFORMATION AND EXPLANATIONS WHICH TO THE BEST OF *MY/OUR KNOWLEDGE AND BELIEF WERE NECESSARY FOR THE PURPOSES OF THE AUDIT. IN *MY/OUR OPINION, PROPER BOOKS OF ACCOUNT HAVE BEEN KEPT BY THE HEAD OFFICE AND THE BRANCHES OF THE MULTIPLEX THEATRE AFORESAID VISITED BY *ME/US SO FAR AS APPEARS FROM *MY/OUR EXAMINATION OF BOOKS. AND PROPER RETURNS ADEQUATE FOR THE PURPOSES OF AUDIT HAVE BEEN RECEIVED FROM BRANCHES NOT VISITED BY * ME/US, SUBJECT TO THE COMMENTS GIVEN BELOW:- IN MY OPINION. THE MULTIPLEX THEATRE SATISFIES THE CONDITIONS STIPULATED IN SECTIONS 80-IB AND THE AMOUNT OF DEDUCTION CLAIMED UNDER THIS SECTION IS AS PER THE PROVISIONS OF THE INCOME TAX ACT, AND IN *MY/OUR OPINION AND TO THE BEST OF *MY/OUR INFORMATION AND ACCORDING TO EXPLANATIONS GIVEN TO *ME/US, THE SAID ACCOUNTS GIVE A TRUE AND FAIR VIEW- (i) IN THE CASE OF THE BALANCE SHEET, OF THE STATE OF AFFAIRS OF THE ABOVE NAMED MULTIPLEX THEATRE AS AT.............................................AND (ii) IN THE CASE OF THE PROFIT AND LOSS ACCOUNT. OR THE PROFIT OR LOSS OF THE MULTIPLEX THEATRE FOR THE ACCOUNTING YEAR ENDING ON............... PLACE DATE SIGNED ACCOUNTANT" Sd/- (Dr. Dheeraj Bhatnagar) Director to the Government of India F.No.l42/14/2002-TPL Note: The principal rules were published under Notification No. 969 dated 26th of March, 1962 which has been amended from time to time, the last such amendment was made vide notification no.358/2002 dated 29.11.2002. EXPLANATORY MEMORANDUM The Finance Act 2002 amended section 80-IB of the Income-tax Act, 1961, to insert sub-section (7A) providing a deduction for new multiplex theatres, w.e.f..1.4.2003. This notification has amended the Income Tax Rules 1962 to insert Rule 18DB to prescribe the area, faculties and amenities for multiplex theatres as well as the particulars of audit report to be filed for the purpose of sub-section (7A) and clause (da) of sub-section (14) of section 80-IB. The rule is being notified with retrospective effect and is not prejudicial to the assessees.