L.N. PODDAR Vs. ITAT

JUDGEMENT

(1.) L .N. Poddar (hereinafter referred to as "the assessee"), derived income from various partnership firms as also from Poddar Pictures. He is its proprietor. He had produced a Bhojpuri film named Kajari. Its production cost is Rs. 11,50,000. The film was certified for release by the Board of Film Censor on 27 -9 -1989. It was released on commercial basis on 23 -3 -1990. It is an admitted position that the assessee maintained the books of account for the period ending on March 31 -3 -1989 and 31 -3 -1990. However, the assessee has not maintained the books of account for the year in which the film was released. According to him, non -maintenance of account had occasioned on account of the fact that he received a single sum of Rs. 10,000 against the total production cost of Rs. 11,50,000. The assessee claimed deduction in respect of expenditure on production of the feature film as provided under Rule 9A of the Income Tax Rules, 1962 (hereinafter referred to as "the Rules").

(2.) THE assessing officer did not grant deduction on his finding that the assessee has not maintained the books of account. On appeal preferred by the assessee, the Commissioner (Appeals) accepted the contention of the assessee and held that the bank account is the books of account and deduction in respect of expenditure on production of the film was fit to be allowed. The revenue carried the matter in appeal before the Patna Bench of the Income Tax Appellate Tribunal (hereinafter referred to as "the Tribunal"), which held that the bank account cannot be equated with the books of account and, accordingly, held that the assessee is not entitled to claim deduction in respect of expenditure on production of the film.

(3.) BY order dated 15 -9 -2006, the appeal has been admitted on the following substantial question of law: