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TMI Blog1984 (5) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said picture. The consideration was Rs. 6,60,000 of which Rs. 25,000 was to be paid on the date of agreement and the balance in instalments of Rs. 35,000 on 31st October, Rs. 2 lakhs on 20th November and Rs. 4 lakhs within fifteen days after the date of the censor of the film. On 7-10-1978, the assessee in turn sold the rights in the film to Prema Trust for a sum of Rs. 8,65,000. This amount was payable in instalments of Rs. 10,000 on the date of agreement, Rs. 50,000 on 31-10-1978 and Rs. 2 lakhs on 25-11-1978 and Rs. 6,05,000 within fifteen days of the censor of the film. The accounts of the assessee also showed that the assessee was only passing on the amount received from Prema Trust to Premalaya. The censorship certificate was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the claim that these agreements did not give rise to income within the previous year ended 31-3-1979. The Commissioner, however, without giving a categorical decision on this point, restored the matter to the ITO which itself shows that the order is vitiated by lack of clear finding that the assessment was erroneous in law. Be that as it may, we think it proper to go into the merits of the question whether the income could be said to have accrued in the previous year ended 31-3-1979 to decide whether the assessment order was erroneous and thereby conferred jurisdiction to the ITO to revise that assessment. 4. The contention of the assessee on the merits was that the agreements stipulated for the transfer of the property only after the ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf comes into existence and not before. If that asset does not come into existence, the agreement will be ineffective and become voidable. Hence, it is not possible for any income to accrue from such an agreement until the asset, which is the subject-matter of the transaction itself, comes into existence. This position has been recognised by the revenue itself since under rule 9A of the Income-tax Rules, 1962 ('the Rules') relating to the computation of income from feature films, in sub-rule (10), it is stated that for the purpose of that rule, the rights of exhibition of a feature film shall be deemed to have been sold only on the date when the positive print of the film was delivered to the film distributor, which is possible only when t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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