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TMI Blog1975 (8) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... , one Kamini Kaushal, a film actress, and one P. N. Arora, a film producer. Under the agreement of partnership dated May 3, 1951, the firm was constituted with a view to produce only one talkie picture called "Poonam". The picture was to be produced under the banner of "Kayarts". Each of the partners was entitled to 50% share in the profits of the business and, in addition, Kamini Kaushal was to receive a sum of Rs. 25,000. The production of the picture which was later on named "Poonam" commenced in June, 1951. It was completed and released in November, 1952. According to the books of the assessee there was a total loss in the business of Rs. 1,32,719. The assessee-firm did not file any return claiming loss as the firm was not registered an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re loss claimed by the assessee for the assessment year 1953-54 could not be allowed inasmuch as a part of the same related to the earlier assessment year 1952-53. He took the view that the accounting period for the assessment year 1953-54, commenced on April 1, 1952, and ended on November 30, 1952, during which period the venture was closed. He, therefore, took the view that any expenses pertaining outside this period as relates to establishment of the concern cannot be considered in the year in question, i.e., assessment year 1953-54. On an appeal by the assessee the Appellate Assistant Commissioner accepted the contention holding that in regard to a picture the result had to be considered as a whole and not piece-meal. He was not impress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of a picture, whether a picture will result in a net profit or loss cannot be ascertained until it is completed and released. When there was a single venture to produce an isolated picture, until the picture was completed and released neither profit could be ascertained nor loss could be ascertained. The Tribunal accordingly concurred in the view taken by the Appellate Assistant Commissioner that the assessee-firm was entitled to a deduction for the expenses of Rs. 42,338 incurred during the period June 1, 1951, to March 31, 1952. It is out of this order of the Tribunal that the above question has been referred for our determination. Mr. Joshi submitted that undoubtedly at one time the view held was that in case of single venture in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Division Bench in this case took the view that as the transaction was not completed it could not be said on the facts stated that the amount sought to be taxed represented profits. A somewhat similar case in respect of a venture in the nature of trade whereby vast areas of land were purchased and they were sought to be divided, came up for consideration before the Supreme Court in P. M. Mohammed Meerakhan v. Commissioner of Income-tax [1969] 73 ITR 735 (SC). The Supreme Court took the view that the transactions of the assessee constituted an adventure in the nature of trade and were in the course of a profit-making scheme. The Supreme Court concurred with the view that was taken by the Income-tax Officer by holding that the Income-tax Of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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