Case Law Details
Malayala Manorama Co. Ltd. Vs ACIT (Kerala High Court)
Rule 9B(5) starts with a non-obstante Under the said rule, it is laid down that deduction under Rule 9B shall not be allowed unless the distributor credits in the books of accounts, the amounts realised by the distributor in case where the distributor himself has exhibited the film on commercial basis. The assessee was therefore required to credit the amount realised by him by exhibiting the film in the profit and loss account. Hence the deduction is permissible under Rule 9B only if the film has been commercially exploited and an income received. Sub-rule (4) of Rule 9B only permits carrying forward of the cost of acquisition to the next year for the purpose of claiming deduction, which can be claimed only if there is income generated by the film and the same is credited to the books of accounts as provided in the overriding sub-rule at Rule 9B(5). There can be no deduction permissible on the cost of acquisition without generation of income credited in the books of account. The subject films were never commercially exploited and generated absolutely no income.
It is an admitted case that the feature films were never exhibited and there was no amount credited in the profit and loss account as amount received on exhibition of films. The finding of the Appellate Authority as well as the Tribunal is therefore, to be upheld and we find no reason to interfere and the claim of the assessee fails. We answer the questions of law in favour of the Revenue and against the assessee. Hence, the Appeal is dismissed.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
The assessee is before us aggrieved by the finding of the Tribunal rejecting the appeal claiming the benefit under the provisions of Rule 9B(4) of the Income Tax Rules, 1962 (for brevity ‘the Rules’). The following substantial questions of law arises for consideration:
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