TMI Blog1993 (3) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... e cost of production of film as reflected in the books of accounts was adopted as against the market value of the film shown by the assessee at a lower figure. The assessment orders and the appellate order revealed the respective cost of production of films shown as per the books of accounts and the market value returned by the assessee for those films. 3. The relevant facts are that the assessee is an individual. The assessee, a film producer, has valued the incomplete film produced as on the valuation date at a throw away price in terms of section 7(1) of the Wealth-tax Act, vis-a-vis the actual cost of production shown in the balance sheet wherein such incomplete films are shown as assets. The logic for such valuation is said to be tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,46,058 9,46,058 Ambabai ------------------------------------------------------------------------- 5. On appeal, it was contended on behalf of the assessee that the value of original film depends upon the demand in the market and the fate of such film is absolutely uncertain and the only person who would wish the film to be a success is the producer himself. The exposed film as such will have no customer in the market and only the distributor would give some price to such incomplete film and therefore, the value returned by the assessee was quite reasonable. It was also stated that the value of the asset shown in the balance sheet was not binding on the assessee for the purpose of wealth-tax because the basis of va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorities. 9. We have duly considered the rival submissions and perused the impugned orders of the authorities. The factual position of the case has been clearly stated in the orders of the authorities and do not call for any repetition. At once we have to make a pertinent observation that we are not concerned with determination of profits arising on the business of production of films and sale thereof. We are only concerned, on the other hand, with the value of Incomplete production of films on the respective valuation dates under consideration. Since the assessee is carrying on film production as a business, it is only proper that value as contemplated by clause (a) of sub-section (2) of section 7 of the Wealth-tax Act is required t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock, its value adopted for the purposes of assessment under the Income-tax Act, 1961, for the previous year relevant to the corresponding assessment year. 11. Obviously, in the case of film produced, no depreciation is admissible and therefore, the question of taking into account written down value thereof does not arise. The cost of film production is subject to the portion of the amortisation allowed by the rules or Board's circulars, which are separately specified and with which we are not concerned. Since such exposed film produced constitutes a capital asset, it is only proper that the value adopted for the purposes of Income-tax assessment for the relevant previous year is to be adopted. In other words, the actual expenditure incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loitation of such film, the only criterion for valuing the incomplete production of film is the cost of production as per Income-tax assessment, that is the book value shown in the balance sheet, as was rightly adopted by the Assessing Officer and rightly confirmed by the Dy. CWT(A). It is Just like cost of construction of building before its completion. Since the question of marketability of an incomplete film or incomplete building does not arise, the question of determining the market value in such a case also does not arise, as vehemently contained by the learned counsel for the assessee. In the facts and circumstances of the case, the orders passed by the Dy. CWT(A) are unexceptionable and therefore, we uphold the orders of the Dy. CWT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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