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TMI Blog1988 (12) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... February 26, 1977, to the Income-tax Officer, when the assessment proceedings were pending, exercising its option within the meaning of rule 9B(7) of the Income-tax Rules, which was introduced by the Income-tax (Seventh Amendment) Rules, 1976. A copy of this is annexure A-1 in the printed paper book. Later on, the assessee addressed a letter dated May 21, 1977, to the Inspecting Assistant Commissioner and another letter to the Income-tax Officer on May 23, 1977, on the question of option. These are anexures A-2 and A-3, respectively. The case of the assessee before the Income-tax Officer was that, vide his letter dated February 26, 1977, option was exercised in respect of the Mm "Bobby" and the subsequent two letters were written to make th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by him before the final order is passed by the Income-tax Officer ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the assessee is entitled to exercise his option under sub-rule (7) of rule 9B in respect of one film while not exercising such option in respect of the other films released in the same assessment year ?" The method of calculating income of film distributors is contained in rule 9B of the Income-tax Rules, 1962, framed in exercise of the powers contained in section 295 of the Income-tax Act, 1961 (hereinafter called "the Act"). The Central Board of Direct Taxes had issued Circular No. 92 of 1972, regarding assessment of Mm producers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aration in writing to the Appellate Assistant Commissioner, the Appellate Tribunal or, as the case may be, the Commissioner (such option being final for that assessment year and for every subsequent assessment year) that the cost of acquisition of the feature Mm may be allowed in accordance with the provisions of sub-rule (1) to sub-rule (6)." A reading of sub-rule (7) shows that for the assessment years from April 1, 1973, to April 1, 1976, the new provisions contained in sub-rule (1) to sub-rule (6) of rule 9B would not apply to a film distributor unless assessment in respect of that year is pending before the Income-tax Officer and the Mm distributor exercises an option by furnishing a declaration in writing that the cost of acquisiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ads as follows: "In connection with the above assessment which is pending with you, we hereby give our option as required under the new Income-tax Rules on amortisation and notified in the Gazette on December 30, 1976. Only one picture named 'Bobby' was released during the year under assessment on September 28, 1973. We further state that this was the only picture acquired on minimum guarantee basis and released during the year under assessment. The other pictures released during the year were acquired on outright purchase/royalty basis. We further declare that these new Income-tax Rules may please be applied even in subsequent years." A reading of the letter clearly shows that the option was exercised for the applicability of the new ..... X X X X Extracts X X X X X X X X Extracts X X X X
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