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TMI Blog1983 (7) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal has committed an error of law inasmuch as that territory 'K' mentioned in the said Table is bifurcated ; (d) that the assessee-respondent has exploited the picture in a part of territory 'K' and, therefore, the claim of the assessee is denied contrary to the statutory rules. 2. On relying upon these grounds, Shri Khurana, the learned counsel for the assessee, contends that the mistakes apparent from the record are there and the same should be rectified and the appeal of the revenue must be dismissed. On the other hand, Shri Nagpal, the learned departmental representative, contends that there is no mistake apparent from the record and as such, this application of the assessee is misconceived. Hence, the same should be dismissed. He relies on the order of the Tribunal. 3. We have heard of the rival contentions and gone through the record before us. We have seen our notes in the log book which show that the assessee's counsel, Shri Khurana, relied upon the case of the Hon'ble Supreme Court at the time of hearing of the appeal to support the order of the Commissioner (Appeals). However, there is no mention of this decision in the order of the Tribunal. Hence, we hold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e apparent from the record in holding that when there is no exhibition or sale in any part of the territory, then the full deduction cannot be allowed to the assessee in view of the fact, that in such a situation, the exhibition and sale of the film is not in the territories but in some of the territories as stated in the said Table. Accordingly, we reject the contention of Shri Nagpal, that at the time of hearing of the appeal, both the parties admitted that the issue involved was to be determined according to the said provisions of rule 9A detailed in the order of the Tribunal as rule 9A nowhere says that a territory can be bifurcated if there is no exhibition or sale of such film in any area of such territory. Moreover, there is no such concession as stated by Shri Khurana that if there is no exhibition or sale of the film in part or area of the territory, then the exhibition is not in the territory as shown in the Table ; hence, it is in some of the territories shown in the Table. Apart from it, rule 9A(2) makes it clear that if the exhibition or sale of the film is there in all or some of the areas, then full deduction in respect of expenditure on production of feature films i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, whether the ITO has rightly valued the aforesaid closing stock at Rs. 97,579 as against nil claimed by the assessee. The Tribunal in their order has considered this point as is clear from the following extract appearing in paragraph 5 of their order dated 31-8-1982 : "According to rule 9A(6)(b) and rule 9A(9)(a) and (c), the cost of production of the film is to be allowed in any previous year as deduction in computing the profits and gains of such previous year and balance, if any, should be carried forward to the next following previous year and allowed as deduction in that year. When this is so, then there is no question of closing stock to be taken at nil value, on the ground that there is no scope of the exhibition of the film on commercial basis in the territories of Andhra Pradesh and Tamil Nadu on the basis of paper-book and on the fact that up to date, none have offered to purchase such rights in these territories. Accordingly, we reject this contention of Shri Khurana." Thus, there is no omission on the part of the Tribunal to consider the said argument of the assessee. 2. The second alleged mistake pointed out in the miscellaneous application states that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amil Nadu are merely parts of these territories. When it is so, then the ITO is justified in taking the percentage at 4 per cent out of 7 1/2 per cent on looking to the area and population of the States of Andhra Pradesh and Tamil Nadu." 3. It is quite clear from the above that there is no omission on the part of the Tribunal to consider the second point raised in the miscellaneous application. 4. It is well settled that the Tribunal has no power of review vide the decision in the case of CIT v. R. Chelladurai [1979] 118 ITR 108 (Mad.). Again, matters which involve debate or long-drawn process of reasoning do not come within the purview of section 254, vide the decision in the case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC). I am unable to see any mistake apparent from the record as envisaged under section 254 in the order dated 31-8-1982 of the Tribunal. The miscellaneous application, in fact requests for a review of the order of the Tribunal and the Tribunal does not have such a power. Hence, I come to the conclusion that the miscellaneous application filed by the assessee is devoid of any merit and deserves to be rejected. Reference under section 255(4) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the picture to the profit and loss account. The ITO objected to this and applying the provisions of rule 9A disallowed a sum equal to 4 per cent of the adjusted cost of production. 3. The matter came up on departmental appeal before the Tribunal in IT Appeal No. 1002 (Bom.) of 1981. The Tribunal, going into the case and after hearing the parties, upheld the ITO's order and allowed the departmental appeal. 4. In the miscellaneous application filed against the Tribunal's order, the assessee raised two points : 1. The case of Chainrup Sampatram was cited before the Tribunal at the time of hearing. This does not find mention in the Tribunal's order and has not been considered by it. 2. The assessee's argument that the various territories enumerated in the Table under rule 9A of the Income-tax Rules could not be further bifurcated and have to be regarded as independent units by themselves was not considered by the Tribunal. 5. The learned Judicial Member, verifying his log book, found that reference to the Supreme Court decision in Chainrup Sampatram's case obtained in his notings. He also accepted the claim of the assessee's learned representative that the territory 'K' s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedure for valuing stock. In respect of motion picture films the normal procedure is not adopted and a special method of valuing stock obtained liberally in rule 9A. Without, therefore, challenging the applicability of Chainrup Sampatram's case to stock valuation the learned counsel has pointed out that the specific provisions of rule 9A being applicable and the same having been applied by the Tribunal, there was neither any mistake nor any omission. Statutorily rule 9A supersede's the general principles laid down in Chainrup Sampatram's case. With regard to the bifurcation of the proportion relating to a particular territory, according to the learned counsel, what the assessee has challenged was a different opinion or an interpretation given by the Tribunal. There is no factual dispute about the fact that the territory 'J' is not completely sold and 'K' is only partly sold. Whether a particular territory for the purposes of stock valuation could be further divided or not is a matter of interpretation. The figure of 7 1/2 per cent is only a typographical mistake for 5 1/2 per cent. That does not very much alter the substance of the Tribunal's order. This latter is supported by re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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