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TMI Blog2015 (12) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... old films which is to be allowed as deduction irrespective of sale or not. Thus, instead of loss of ₹ 18,22,482/- claimed by the assessee in the return, loss of ₹ 62,94,368/- have to be allowed as per Rule 9B. We find that as per the cost of acquisition, closing stock adjustment in past year’s closing stock may lead to allowing higher losses in the instant assessment year. The method followed by the assessee is endorsed and the addition made by the Assessing Officer was rightly deleted by the CIT(A) in the assessment year i.e 2007- 08. This factual legal finding needs no interference from our side. We uphold the same. - Decided against revenue - I.T.A. No.1288 & 1289/Mum/2012 - - - Dated:- 30-9-2015 - SHRI SHAILENDRA KUMAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 is attracted in this case. Rule 9B of the Income-tax Rules specifies the deduction that is to be allowed in respect of cost of acquisition of a feature film for computing the profits and gains of the business of distribution of feature films. Referring to sub Rule 4 5 of Rule 9B, the Assessing Officer disallowed the excess cost of ₹ 27,52,935/-. The matter carried before the first appellate authority in appeal and after considering the submissions made on behalf of the assessee, the CIT(A) granted relief to the assessee. Aggrieved, the Revenue is in appeal before us. 4. The ld. D.R. contended that the CIT(A) was not justified in holding that the assessee is not required to follow the method of valuation prescribed under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at least 90 days before the end of previous year, entire cost of acquisition is to be allowed in that year. In terms of sub rule 3 to Rule 9B if the film purchased is not released least 90 days before the end of previous year but amount realized on sale of rights during previous year, is less than cost price, the amount realized would be allowed as reduction and the balance cost of acquisition is to be carried forward to next year. In terms of sub rule 4 to Rule 9B if the film purchased is not released or sold during previous year, entire cost of acquisition is to be carried forward allowed in next year. In terms of sub rule 5 to Rule 9B the amount realized on sale during previous year, should be credited in the books of account. From ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3460280) Net Loss (6294368) Thus, instead of loss of ₹ 18,22,482/- claimed by the assessee in the return, loss of ₹ 62,94,368/- have to be allowed as per Rule 9B. We find that as per the cost of acquisition, closing stock adjustment in past year s closing stock may lead to allowing higher losses in the instant assessment year. The method followed by the assessee is endorsed and the addition made by the Assessing Officer was rightly deleted by the CIT(A) in the assessment year i.e 2007- 08. This factual legal finding needs no interference from our side. We uphold the same. 6. Similar issue arose in other appeal wherein the facts being simi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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