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TMI Blog2000 (11) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to exploit the film "Dil Aur Deewar" for the overseas territories, reserving the right to receive payment of Rs.10.50 lakhs, and in respect of excess collections, after debiting expenses, 50 per cent. of the balance. The agreement, further, also provides that the publicity material required for the exhibition of the film overseas is to be supplied by the assessee, who is also entitled to receive back the materials at the end of the ten year period. The assessee claimed the benefit of section 35B for the publicity materials sent by it, as also for the cost of the positive prints, 26 in number, which had been delivered by it to Nataraj Enterprises. It must be mentioned here that the Tribunal has found that the export licence was obtain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of the goods, services or facilities which the assessee deals in or provides in the course of his business. The publicity materials provided by the assessee here were in respect of the film which had been produced by the assessee and which was being exploited in the overseas market through the help of the assignee. Though the agreement is termed as one of assignment, it in substance provides for payment to the assignees so called, of only 50 per cent. of the surplus collections over and above the sum of Rs.10.50 lakhs and also requires the assignees to make over to the assessee all the export benefits. In this situation, it must be held that the cost of the advertising material was an item of expenditure incurred by the assessee in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure that is allowable is not the cost of making of the goods, but the expenditure incurred on the distribution, supply or provision outside India of the goods. In the context of the exploitation of the film outside India, the goods necessary for such exploitation would be the positive prints which have to be made from the negatives and which positive prints are required to be taken out of India for the purpose of exhibition in theatres outside India. While the expenditure incurred on the distribution of those positive prints outside India may qualify, the cost of the goods themselves cannot qualify for deduction under those provisions. That would be so whether the goods are positive prints or any other goods taken outside India and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduction of films or of any other cost. It is only concerned with the expenditure incurred on the development of markets abroad; and provides for allowance for such expenditure as is capable of being brought within the scope of that provision. Mere incurring of expenditure abroad is insufficient. It must be expenditure of a kind which falls within any one of the sub-clauses of section 35B(1)(b). The Tribunal has misled itself by launching an enquiry as to whether the positive prints are capital goods or whether the expenditure incurred on the making of such positive prints is revenue expenditure. Such enquiry was not called for having regard to the language employed in section 35B(1)(b) and the purpose for which section 35B was placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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