COMMISSIONER OF INCOME TAX Vs. GEEVA FILMS

JUDGEMENT

(1.) THIS is a reference by the Income-tax Appellate Tribunal, Cochin Bench, at the instance of the Revenue. The question referred for our opinion is :

(2.) THE assessment year is 1972-73. THE assessee is doing business in the distribution of films. It had purchased prints of two films during the year along with the additional copies, for a total cost of Rs. 4.5 lakhs on the films and Rs. 1,23,002 on the additional prints. It claimed deduction for these amounts while computing the income from business. THE deduction was allowed by the ITO. But on a revision under Section 263 of the I.T. Act, the Commissioner of Income-tax set aside the officer's order. He pointed out that the two films concerned in the assessment were released on October 17, 1971, and December 1, 1971, respectively. As they were released in the latter half of the accounting year, the Commissioner held that the amortisation to be allowed should be restricted to 50%. To this extent he was of the opinion that the order of the ITO was prejudicial to the Revenue and required modification. THE officer was directed to modify his order accordingly. On appeal by the assessee, the Tribunal allowed the appeal, reversed the order of the Commissioner and restored that of the ITO. It referred the question of law under Section 256(1) of the Act.