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TMI Blog2015 (12) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts and circumstances of the case and in law, the Ld. CIT(A) was correct in holding that the assessee is not required to follow the method of valuation prescribed u/r 9B of I.T. Rule, 1962 and thereby deleting the addition made as a result of disallowance of excess cost claimed of Rs. 27,52,935/-. The appellant prays that the order of the CIT(A) on the grounds be set aside and that of the Assessing Officer is restored." 3. Brief facts of the case are that the Assessing Officer observed that the assessee is following conservative method of accounting for valuation of closing stock. The films purchased are shown at cost if the same are sold in the year, the profit or loss on the same is recorded. In respect of unsold films, the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are development. The stand of the assessee has been that it is buying satellite/TV telecasting rights of the movie and that the purchase of movies is not for theatre release and thus Rule 9B of the Income Tax Rules, 1962 is not applicable. It is not in dispute that the assesee has been valuing the closing stock of movies at cost for past many years and in assessment years 2007-08 and 2008-09, the valuation method has been challenged by the concerned Assessing Officer. If the method followed by the assessee is accepted, the loss claimed in assessment years 2007-08 and 2008-09 is as under;- A.Y. 2007-08 Rs. 10,17,210/- A.Y. 2008-09 Rs. 18,22,482/- In case, the Rule 9B of the I.T. Rules is applicable, the following position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of net profit is as under:- Total sales 7075000 Less: Total cost of Sales Opening Stock of A.Y. 2007-08 to be allowed. 7501000 Current year's purchase against which sales have been made 2795000 (10296000) Gross loss (3221000) Add: Other Income 213977 Beta charges disallowed in Asst. order 172935 Less: Expenditure claimed Administrative expenses 3266813 Depreciation 193467 (3460280) Net Loss (6294368) Thus, instead of loss of Rs. 18,22,482/- claimed by the assessee in the return, loss of Rs. 62,94,368/- have to be allowed as per Rule 9B. We find that as per the cost of acquisition, closing stock adjustment in past year's closing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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