9911796707
TMI Blog1988 (7) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing the appeal. 3. Certain facts need to be stated. 4. The assessee, Shri Shreeram Bohra, is a resident individual who filed his return for the year ended 31st March,1976 in response to a notice under s. 148 on 12th April 1979 disclosing an income of Rs. 12,071. In response to a notice under s. 142(1) of the Act, the assessee attended personally and filed a revised statement of computation of total income and the return of income may be considered as revised to show a loss of Rs. 33.582. The assessee was running a proprietory concern called Messrs Madan Movies. He also was a partner in Messrs Madan Chitra Distributors Delhi. In addition he received remuneration from Messrs Bohra International. 5. In Messrs. Madan Movies, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined or to the amount of loss computed or to the status under which he is assessed. The grievance in respect of the refusal to carry forward the determined loss cannot be a subject matter of appeal. For this reason, the CIT(A) held the appeal to be incompetent. 8. We have considered the arguments advanced by the assessee's counsel who relied on a catena of judgments in support of his case. The facts narrated herein-above would not be complete unless we mention that at the conclusion of his order the ITO had stated that the return is not filed within the time allowed under s. 139(3) and, therefore, the loss determined is not allowed to be carried forward. In our opinion,an assessee cannot be denied the benefit of the carry forward of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct on 5th Jan., 1983. This was reopened under s.146 by order dt 11th Feb.,1983 and the fresh order of assessment was passed on 22nd Sept., 1984. 12. The assessee had filed on 6th Jan.,1982 a return of loss declaring a loss of Rs. 1,43,346. Subsequently, he filed a revised return on 25th March, 1982 revising the loss to Rs. 1,80,183. During the relevant year of account, i.e. the year ended 31st March, 1979 the assessee continued to receive income from personal business of production of films, which was done in the name of Messrs Madan Movies. The assessee produced a picture by the name. "Thief of Baghdad", which was completed and released during the period relevant to the asst. yr.1979-80. In the revised return to the asst.yr. 1979-80. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be continued." Against this finding the assessee went to the CIT(A). The CIT(A) observed that the appellant being film producer the cost of production of any feature film has to be allowed only in accordance with the provisions of r. 9A. It is mimmaterial for the purpose of invoking r.9A as to whether the appellant follows the cash system of accounting or the mercantile system of accounting, followed the by him. Therefore, the CIT(A) held that whereas the receipts in respect of the assess's business actually received during the relevant accounting year will have to be brought to tax in view of the cash system of accounting followed by him, the cost of producing the picture, though incurred in this year, will have to be treated as having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts on cash system. His expenditure during the relevant accounting year was Rs.3,31,900 and realisations were Rs. 3,90,489. Since he was maintaining books of account on a cash system, provisions of s. 145 were applicable in his case and sub-s(1) clearly provided that income chargeable under the head Profits and gains of business or Income from Other Sources shall be computed in accordance with the method of accounting regularly employed by the assessee. It was not disputed that the assessee followed a cash system of accounting and it was this section, which had to be relied upon for determining the income of the assessee. The assessee's counsel argued that r. 9A cannot be allowed to overrule the main provisions of law and particularly the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with the IT Department. The Department cannot compel an assessee to adopt the mercantile system of accounting. 14. In our opinion,r. 9A providing mode of amortisation of the cost of film is not mandatory and cannot over-ride the provisions of s. 145 which, as well have seen above,provides that income from Profits and Gains of Business should be computed in accordance with the method of accounting regularly employed and for which proposition several authorities of the Supreme Court have already been cited. In the present case, the CIT(A) has proceeded on the assumption that the cost of production, i.e., the impugned expenditure of Rs. 3,31,900 should be deemed to have been allowed in the year in which the film was produced when, in fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
