1994 (9) TMI 123

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of the film by way of perpetual lease for a period of 99 years for a consideration of Rs. 14.96,000 and therefore the entire cost has to be amortised and allowed as deduction. The Assessing Officer went into the agreement dated 1-10-1984 and noticed that the assessee was required to pay only a sum of Rs. 6,95,799 at the time of granting the distribution rights and the balance amounts are to be paid in four instalments on the dates specified in the agreement. He also noticed that the film was released in Kerala on 31-8-1984 and the assessee had exhibited the film from 1-10-1984, i.e., more than 90 days prior to the close of the accounting year. Against this background, the Income-tax Officer looked into the provisions of rule 9B of the Inco....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e Income-tax Act. Admittedly the assessee is following the mercantile system of accounting on which there is no dispute before us. The liability to pay the impugned amount of Rs. 14,96,000 arise under an agreement dated 1-10-1984. Some of the clauses relevant are as follows : In the recital it has been stated that all the entire right, title and interest including the world negative rights of the picture " Aarante Mulla Kochu Mulla " by way of perpetual lease for a period of 99 years from the date of the agreement was to be given for a consideration of Rs. 14,96,000. Clause 2 of the agreement is as follows : " In consideration of the Lessors granting the Lessees the aforesaid rights, the Lessees agreed to pay to the Lessors consolidated ....