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2015 (9) TMI 1237 - AT - Income TaxDisallowance u/s 37(1) - expenditure on abandoned films - Rule 9A - huge loss pertaining to new projects - Held that:- Hon'ble Madras High Court in the case of CIT vs. Prasad Productions (P) Ltd (1989 (1) TMI 38 - MADRAS High Court ), wherein it was held that even if expenditure relating to positive prints is not allowable under rule 9A, the same can be allowed u/s 37(1) of the Act as it is incurred in connection with the business of film production. As the decision of the Coordinate Bench is on similar set of facts, we, respectfully following the same, allow the assessee’s ground of appeal as far as the claim of expenditure on abandoned films is concerned. As regards the CIT (A)’s directions to the AO to verify whether the conditions prescribed under Rule 9A are satisfied in the case of film Shabari, we find that the said movie was released subsequently and therefore, provisions of Rule 9A are very much applicable. However, the assessee has shown the expenditure incurred towards the film ‘Shabari’, as his closing stock of the relevant financial year and has not claimed it as expenditure. When there is no claim, there can be no disallowance of the same. - Decided in favour of assessee.
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