1980 (7) TMI 57

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....t half of the rate only could be allowed in respect of the films which were released during the second half of the accounting year. He also held that no amortisation was allowable in respect of the films which had not been released in the year of account. The assessee was adopting a method of writing off the cost of the rights of the film distribution in the year of acquisition irrespective of the year of release. Accordingly, he claimed deduction in respect of the thirteen films. Aggrieved, by the order of the ITO, who had not accepted this contention of the assessee, it preferred an appeal before the AAC. The AAC accepted the contention of the assessee that irrespective of the date of release it was entitled to full amortisation in res....

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....al income of the assessee ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions of section 145 would not apply to the assessee's case and that, therefore, no portion of the amortisation claim made by the assessee could be disallowed ? " It appears that in the application for reference under s. 256(1) the department also asked for two more questions to be referred, but they were not referred on the ground that the questions already referred by the Tribunal are comprehensive enough to cover those two questions as well. By way of abundant caution, the department filed an application under s. 256(2), and this court directed the following two questions also to be referred : ....

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.... disputed. But, how the learned counsel is contending that the method employed by the assessee is such that the income cannot properly be deduced therefrom, has not been made out. It may be that the method of writing off in the year of release of the picture, or the elapsing of a particular period from the date of release in order to write off the entire value of acquisition, is a proper method. But that will not mean that it is wrong in principle to write off the value of acquisition in the year of acquisition itself. Nor can we say with definiteness that by adopting such a method the profits and gains cannot properly be deduced therefrom. We have also to keep in mind that while s. 145 enables the ITO not to accept the method of accounting....