The Commissioner Of Income Taxchennai v. Prakash Raj

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HON'BLE MR.JUSTICE R.SUDHAKARANDTHE HON'BLE MR.JUSTICE R.KARUPPIAH The Commissioner of Income TaxChennai. .. Appellant Vs. Prakash Raj .. Respondent PRAYER: Appeal under Section 260A of the Income Tax Act, 1961 againstthe order of the Income Tax Appellate Tribunal 'B' Bench, Chennai,dated 27.10.2006 made in I.T.A.No.2841/Mds/2004 for the assessmentyear 2001-2002 against the order of the Commissioner of Income Tax(Appeals) in ITA.No.117/04-05 dt.27.8.2004 and against the order ofIncome Tax Officer, Media Ward II, Chennai-34 made inGIR.No./PAN/5065P/AAFPP 2016 G for the assessment year 2001-2002dt.26.3.2004. For Appellant :Mr.M.Swaminathan Standing Counsel For Respondent :Mr.Sriramanfor M/s.S.SridharJ U D G M E N T(Delivered by R.SUDHAKAR, J.) This appeal is filed by the Revenue challenging the order of theIncome Tax Appellate Tribunal 'B' Bench, Chennai, dated 27.10.2006made in I.T.A.No.2841/Mds/2004 for the assessment year 2001-2002 andthe same was admitted on the following question of law: Whether in the facts and circumstances of the case, theTribunal was right in holding that Sub-rule (6) of Rule9A of the Income Tax Rules would apply to theexpenditure of an abandoned film, when Rule 9A of theIncome Tax Rules applies only to films which have beencertified for release by the Board of Film Censors? https://hcservices.ecourts.gov.in/hcservices/ 2. The issue raised in this appeal stands covered by a decisionof this Court in A.S.Ibrahim Rawther v. Income Tax Officer, Chennai[T.C.(A) No.19 of 2010, dated 25.4.2013], wherein it is held as under: “12. In a decision reported in [2003] 261 ITR 271[Commissioner of Income-Tax vs S.M.Sagar] the BombayHigh Court has held that the deduction under Rule 9A ofthe Income Tax Rules, 1962 is allowable only if themovie is exhibited or sold. If the movie is not sold orexhibited, the producer is not entitled to claimdeduction. Moreover, the producer would not be entitledto deduction under Rule 9A, unless he had credited thesale proceeds in the Profit and Loss accounts.Admittedly, in this case, the assessee has not exhibitedthe film. Needless to say that before exhibiting thefilm, the censor certificate has to be obtained ascontemplated under Rule 9A of the Act. In the absenceof the same, as rightly found by the assessing officer,the application of Rule 9A also does not arise in thiscase.” 3. In the case on hand, it is beyond any cavil that theproduction of the movie itself was stopped and the movie was notcompleted. The movie was never sold or exhibited and it neverobtained a certificate from the Board of Film Censors. Therefore,the assessee is not entitled to claim deduction under Rule 9A of theIncome Tax Rules. 4. In view of the above, this appeal is allowed and the questionof law is answered in favour of the Revenue and against the assessee.The order passed by the Tribunal is set aside. No costs. Sd/-Assistant RegistrarDated:17.12.14 True Copy To: Sub Assistant Registrar 1. The Assistant Registrar, Income Tax Appellate Tribunal Chennai Bench "B", Chennai. Income Tax Appellate Tribunal Chennai Bench "B", Chennai. 2. The Secretary, Central Board of Direct Taxes, New Delhi.of Direct Taxes, New Delhi. 3. The Commissioner of Income Tax (Appeals)-VI, Chennai – 34. (Appeals)-VI, Chennai – 34. 4. The Income Tax Officer Media Ward-II, Chennai. Media Ward-II, Chennai. 5.The Assistant Registrar, III Floor,Rajaji Bhavan, Besant Nagar,Cennai.Rajaji Bhavan, Besant Nagar,Cennai. +1 cc to Mr.M.Swaminathan, Advocate,SR.59156 +1 cc to Mr.S.Sridhar,Advocate,SR.59051. rj(co)krd 19/12 T.C.(A).No.344 of 2007