2014 (9) TMI 932

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....Appeals) in allowing the write off of cost of production of television serial as abandoned stock in trade amounting to Rs. 40,06,707. 3. The brief facts are that the assessee is engaged in production of Hindi teleserials. During the assessment proceedings the Assessing Officer (hereinafter referred to as the AO) noted that the assessee had debited the cost of production amounting to Rs. 40,06,707 on account of expenses pertaining to teleserial "Kahkashan" which had not been telecasted during the year. The Assessing Officer found that there was no corresponding sale or revenue earned against the said teleserial "Kahkashan", whereas the assessee had debited the said amount of Rs. 40,06,707 out of the opening stock of production at Rs. 79,5....

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....as declared at nil on March 31, 2010. The learned Commissioner of Income-tax (Appeals), after considering the relevant facts on the file, allowed the appeal of the assessee. The relevant observations of the learned Commissioner of Income-tax (Appeals), for ready reference, are reproduced as under :                 "1.3 I have considered the facts and perused the material on record. It is seen that the appellant is predecessor of tele serials. In the case of film/television serial, the cost of production is to be treated as stock-in-trade ; hence, the cost of production of abandoned films/teleserials can be written off as revenue expenditure. The Assessing Officer ....

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....ed in favour of the appellant by the aforesaid decision of the hon'ble Tribunal. The case law as relied on by the authorised representative as discussed in the above paras also support his view as the claim is allowable as business expenses. Therefore, respectfully following the aforesaid decisions, the disallowance made on account of cost of rejected/abandoned teleserial "Kahkashan" as written off is directed to be allowed as business expenditure. Accordingly, this ground of the appeal is allowed." 5. From the above reproduced findings of the learned Commissioner of Income-tax (Appeals) it may be observed that the learned Commissioner of Income-tax (Appeals), in the light of various case law, has held that in case of film/television....