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2015 (5) TMI 236 - HC - Income TaxDisallowance made u/s.40(c) - remuneration paid to two directors of the company - ITAT allowed claim - Held that:- disallowance made by the ITO under section 40(c) of the Act was not justified. The amounts paid to the two individuals were not paid in their capacity as members of the Board of Directors but these amounts were paid as professional charges for directing and producing a film. The revenue is, therefore, not justified in disallowing the claim, the character of the remuneration mode being different. As we have observed above, we are of the view that the Tribunal was right in deleting the disallowance. - Decided in favour of assessee. Deduction section 80J - whether business of production of films constitutes an industrial undertaking ? - Held that:- As relying on Commissioner Of Income-Tax Versus DK. Kondke [1991 (3) TMI 82 - BOMBAY High Court] if the production of a cinematograph film amounts to manufacture of an article or goods within the meaning of section 104 (40(a) as it then stood, it follows that the said activities must be treated as that of an industrial undertaking within the purview of Section 80J of the Act.Accordingly, the activities of production of a film amounted to manufacturing of an article or goods. The activities be treated as those of an industrial undertaking within the purview of Section 80J of the Act. Even otherwise, this Court was of the view that film production will have to be considered as a manufacturing activity and the undertaking will have to be considered as an industrial undertaking as the same is considered under excise law and other allied laws also. - Decided in favour of assessee.
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