2018 (6) TMI 1518

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....x Rules, 1962 (for brevity 'the Rules'). The following substantial questions of law arises for consideration: "1. Whether the Hon'ble Tribunal was right in law and on facts in upholding the order of the lower authorities, by finding that Rule 9B(4) would not entitle the appellant to claim deduction in respect of expenditure of acquisition of distribution rights of feature film during the previous year relevant to the assessment year 2005-06 ? 2. Ought not the Tribunal have found that as per the express provision of Rule 9B(4) of the Income Tax Rules, 1962, the deduction in respect of expenditure on acquisition of distribution rights of feature films, in cases where there was no exhibition of the film on a commercial basis ....

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....led to claim the deduction in respect of expenditure on acquisition of distribution of feature films obtained by the appellant in the year 2003-04 for the reason that there was no exhibition of the films on commercial basis during the period of acquisition or in the next year. The assessee claims that in accordance with the specific provisions in Rule 9B(4), deduction of the cost of acquisition made in the year 2003-04 (previous year to the assessment year 2004-05), has to be carried forward to the next following previous year (ie., 2004-05) and allowed as a deduction in that year, since the assessee has not commercially exploited the film in the year of acquisition. It is pointed out that the reasoning of the lower authority that the non-o....

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....of India (Taxes). 5. Rule 9B(5) starts with a non-obstante clause. 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 i....