- (1.) The Appellant/Assessee herein is engaged in production and distribution of motion pictures mainly in Tamil language. There was a search Under Section 132 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') at the business premises of the Assessee during which certain book of accounts were seized. Consequent to the search, proposal was made for assessment for the block period of ten years 1.4.1986 to 31.3.1996 and thereafter up to 13.9.1996.
(2.) The Assessing Officer disallowed the expenditures where the payments were made in cash in excess of Rs. 10,000/- relying on Section 40A(3) of the Act as it stood prior to 1.4.1996.
(3.) The Appellant filed appeal before the Income Tax Appellate Tribunal, Madras Bench (for short 'the Tribunal'). The Tribunal vide order dated 28.6.2000 partly allowed the appeal and remitted the matter to the Assessing Officer for considering the claim whether the income/loss from the file Thirumurthy was to be computed for the assessment year 1996-97 in accordance with Rule 9A of the Income Tax Rules. It was also directed that in making the computation the Assessing Officer will consider the expenditure and make the disallowance under the provisions of Section 40A(3) of the Act, as was applicable for the assessment year in question.;