JUDGMENT : Akil Kureshi, J. These appeals involve similar question of law. They have been heard together and would be disposed of by this common judgment. 2. We may record individual facts. Income Tax Appeal No. 1140 of 2014 is filed by the Revenue. Respondent assessee is a Private Limited Company and is engaged in business of production and distribution of films. In the return filed by the assessee for the assessment year 2006-07, the assessee had shown income from a feature film "KAAL". The assessee had claimed an expenditure of Rs. 41.43 Lacs for positive prints and further expenditure of Rs. 2.26 Crores on account of advertisement expenses and positive prints. The Assessing Officer while passing the order of assessment did not disturb these claims. However, in the appeal against the order of assessment, the Commissioner of Appeals was prima facie of the view that such expenses were not allowable. Therefore, after putting the assessee to the notice, in his appellate order, he disallowed such claim in terms of Rule 9A of the Income Tax Rules. He was of the opinion that any expenditure which was not allowable under Rule 9A could not be granted in terms of Section 37 of the Income Tax Act, 1961 ("the Act" for short). He made a detailed discussion why in his opinion, such expenditure was covered by Rule 9A of the Rules. He concluded as under :- " From the above observations of Hon'ble jurisdictional High Court, it may be noted that where as a reaction to disallowance under Rule 9A claim u/s. 37 was made, the same was not allowable. The case laws relied upon also do not support the cause of the appellant, since they relate to the issues of commercial expediency, genuineness of expenditure, etc., allowable u/s. 37, i.e. Chapter-IV. The decision in the case of Mukta Arts relates to the lodging, boarding and travelling expenses, which is different from publicity expenses. Accordingly, I am of the considered opinion that expenses on positive prints and publicity expenses are neither allowable under Rule 9A nor u/s. 37 of the I.T. Act." 3. In Income Tax Appeal No. 873 of 2016, the broad facts are that the respondent assessee is the same as in the previous case. The assessee had filed return of income for the assessment year 2009-10. In Income Tax Appeal No. 873 of 2016, the broad facts are that the respondent assessee is the same as in the previous case. The assessee had filed return of income for the assessment year 2009-10. During the year under consideration, the assessee had produced a film named "DOSTANA" and sold the distribution rights to one Yash Raj Films Pvt Ltd. The assessee received the film certification from Censor Board on 3.11.2008 and the film was released on 14.11.2008. The assessee had incurred advertisement expenditure of Rs. 4.44 Crores and claimed the same as deduction. The Assessing Officer noticed that the assessee had incurred the advertisement expenditure after issuance of certificate by the Censor Board. He was of the opinion that such expenditure was not allowable deduction in terms of Rule 9A and 9B of the Rules. The CIT(A) confirmed the view of the Assessing Officer upon which the assessee carried the matter before the Tribunal. The Tribunal, by the impugned judgment, allowed the assessee's appeal relying on its decision in case of the assessee which is subject matter of challenge in Income Tax Appeal No. 1140 of 2014. 4. In this background, the appeal was admitted for consideration on following substantial question of law:- " Whether on the facts and circumstances of the case and in law, the Tribunal was justified in deleting the addition of Rs. 4,44,49,789/- on account of 'Advertising and Publicity expenses' as these expenses were not part of cost of production as per Rule 9A of Income Tax Rules, 1962 and provisions of Section 37(1) of the Act?" 5. Facts in both the appeals are substantially similar. We may, therefore, highlight the relevant facts as arising in Income Tax Appeal No. 1140 of 2014. In the said case, the film produced by the assessee received certification from the Censor Board on 21.4.2005 and the film was released on 29.4.2005. Admittedly, the expenditure on advertisement was incurred after these dates. A short question of law that calls for consideration is, in view of the said facts, whether the expenditures for print and advertisement were liable to be disallowed in terms of Rule 9A of the Rules. 6. Rule 9A of the Rules reads as under:- "[Deduction in respect of expenditure on production of feature films. 9A. A short question of law that calls for consideration is, in view of the said facts, whether the expenditures for print and advertisement were liable to be disallowed in terms of Rule 9A of the Rules. 6. Rule 9A of the Rules reads as under:- "[Deduction in respect of expenditure on production of feature films. 9A. [(1) In computing the profits and gains of the business of production of feature films carried on by a person (the person carrying on such business hereafter in this rule referred to as film producer), the deduction in respect of the cost of production of a feature film certified for release by the Board of Film Censors in a previous year shall be allowed in accordance with the provisions of sub-rule (2) to sub-rule (4). Explanation : In this rule,- (i) "Board of Film Censors" means the Board of Film Censors constituted under the Cinematograph Act, 1952 (37 of 1952); (ii) "cost of production", in relation to a feature film, means the expenditure incurred on the production of the film, not being- (a) the expenditure incurred for the preparation of the positive prints of the film; and (b) the expenditure incurred in connection with the advertisement of the film after it is certified for release by the Board of Film Censors:] [Provided that the cost of production of a feature film, shall be reduced by the subsidy received by the film producer under any scheme framed by the Government, where such amount of subsidy has not been included in computing the total income of the assessee for any assessment year.] (2) Where a 64[***] feature film is certified for release by the Board of Film Censors in any previous year and in such previous year,- (a) the film producer sells all rights of exhibition of the film, the entire cost of production of the film shall be allowed as a deduction in computing the profits and gains of such previous year; or (b) the film producer- (i) himself exhibits the film on a commercial basis in all or some of the areas; or (ii) sells the rights of exhibition of the film in respect of some of the areas; or (iii) himself exhibits the film on a commercial basis in certain areas and sells the rights of exhibition of the film in respect of all or some of the remaining areas, and the film is released for exhibition on a commercial basis at least [ninety] days before the end of such previous year, the entire cost of production of the film shall be allowed as a deduction in computing the profits and gains of such previous year. (3) Where a 66[***] feature film is certified for release by the Board of Film Censors in any previous year and in such previous year, the film producer- (a) himself exhibits the film on a commercial basis in all or some of the areas; or (b) sells the rights of exhibition of the film in respect of some of the areas; or (c) himself exhibits the film on a commercial basis in certain areas and sells the rights of exhibition of the film in respect of all or some of the remaining areas, and the film is not released for exhibition on a commercial basis at least [ninety] days before the end of such previous year, the cost of production of the film in so far as it does not exceed the amount realised by the film producer by exhibiting the film on a commercial basis or the amount for which the rights of exhibition are sold or, as the case may be, the aggregate of the amounts realised by the film producer by exhibiting the film and by the sale of the rights of exhibition, shall be allowed as a deduction in computing the profits and gains of such previous year; and the balance, if any, shall be carried forward to the next following previous year and allowed as a deduction in that year. (4) Where, during the previous year in which a 68[***] feature film is certified for release by the Board of Film Censors, the film producer does not himself exhibit the film on a commercial basis or does not sell the rights of exhibition of the film, no deduction shall be allowed in respect of the cost of production of the film in computing the profits and gains of such previous year; and the entire cost of production of the film shall be carried forward to the next following previous year and allowed as a deduction in that year. [(5)] Notwithstanding anything contained in the foregoing provisions of this rule, the deduction under this rule shall not be allowed unless, - (a) in a case where the film producer- (i) has himself exhibited the feature film on a commercial basis; or (ii) has sold the rights of exhibition of the feature film; or [(iii) has himself exhibited the feature film on a commercial basis in some areas and has sold the rights of exhibition of the feature film in respect of all or some of the remaining areas,] the amount realised by exhibiting the film, or the amount for which the rights of exhibition have been sold or, as the case may be, the aggregate of such amounts, is credited in the books of account maintained by him in respect of the year in which the deduction is admissible; (b) in a case where the film producer has transferred the rights of exhibition of the feature film on a minimum guarantee basis, the minimum amount guaranteed and the amount, if any, received or due in excess of the guaranteed amount or where the film producer follows cash system of accounting, the amount received towards the minimum guarantee and the amount, if any, received in excess of the guaranteed amount, are credited in the books of account maintained by him in respect of the year in which the deduction is admissible. [(6)] Where the [Assessing Officer] is of opinion that- [(a)] the rights of exhibition of the feature film have been transferred by the film producer by a mode not covered by the provisions of this rule; or [(b)] having regard to the facts and circumstances of any case, it is not practicable to apply the provisions of this rule to such case, deduction in respect of the cost of production of the film may be allowed by the [Assessing Officer] in such other manner as he may deem suitable. [(7)] For the purposes of this rule,- (i) the sale of the rights of exhibition of a feature film includes the lease of such rights or their transfer on a minimum guarantee basis; (ii) the rights of exhibition of a feature film shall be deemed to have been sold only on the date when the positive prints of the film are delivered by the film producer to the purchaser of such rights or where in terms of the agreement between the film producer and the film distributor as defined in rule 9B, the positive prints are to be made by the film distributor, the date on which the negative of the film is delivered by the film producer to the film distributor. [(8)][Nothing contained in this rule shall apply in relation to any assessment year commencing before the 1st day of April, 1987.] 7. Sub-Rule (1) of Rule 9A thus, provides that in computing the profits and gains of the business of production of feature film, the deduction in respect of the cost of production of a feature film certified for release by the Board of Film Censors in a previous year would be allowed in accordance with the provisions of sub-rule (2) to sub-rule (4). 8. Clause (ii) of Explanation to sub-rule (1) explains the term "cost of production" in relation to feature film as to mean expenditure incurred for preparation of the film but excluding (a) expenditure incurred in preparing positive prints and (b) expenditure incurred in connection with advertisement of the film after it is certified for release by the Board of Film Censors. The sub-rules (2) to (4) of Rule 9A makes special provisions for deduction in respect of profits and gains of the business of production of feature film. For example, in terms of sub-rule (2) of Rule 9A, where a feature film is certified for release by the Board of Film Censors in any previous year and in such previous year, the film producer sells all rights of exhibition of the film, the entire cost of production of the film shall be allowed as a deduction in computing the profits and gains of such previous year. However, for the film producer either himself exhibits the film on a commercial basis or sells the rights of exhibition of the film in respect of some of the areas or he himself exhibits the film in certain areas and sells the rights in the rest and the film is released for exhibition at least 90 days before the end of such previous year, the cost of production of the feature film will be allowed as a deduction in computing the profits and gains of such previous year. As per sub-rule (3) of Rule 9A, if the feature film is not released for exhibition on commercial basis at least 90 days before the end of previous year, a different formula for allowing the cost of production would apply. These provisions thus make special scheme for deduction for cost of production in relation to the business of production of feature films. One thing to be noted is that no part of the cost of production as defined in clause (ii) of explanation to sub-rule (1) is to be denied to the assessee permanently. It is only to be deferred to the next assessment year under certain circumstances. 9. All these provisions would necessarily be applied in relation to the cost of production of a feature film. In other words, if a certain expenditure is claimed by the assessee by way of business expenditure, which does not form part of cost of production of a feature film, Rule 9A would have no applicability. In such a situation, the assessee's claim of expenditure would be governed by the provisions of the Act. If the assessee satisfies the requirements of Section 37 of the Act, there is no reason why such expenditure should not be allowed as business expenditure. To put it differently, the expenditure that would be governed by Rule 9A of the Rules, would only be which is in respect of the production of the feature film. 10. In the present case, the cost of print and the cost of publicity and advertisement (which was incurred after the production and certification of the film by the Censor Board) are under consideration. These costs, we fail to see how can satisfy the description "expenditure in respect of cost of production of feature film". 10. In the present case, the cost of print and the cost of publicity and advertisement (which was incurred after the production and certification of the film by the Censor Board) are under consideration. These costs, we fail to see how can satisfy the description "expenditure in respect of cost of production of feature film". We may recall term "cost or production" defined for the purpose of this rule specifically excludes the expenditure for positive print and cost of advertisement incurred after certification by the Board of Film Censors. What would therefore, be governed by the formula provided under Rule 9A is the cost of production minus these costs. The legislature never intended that those costs which are in the nature of business expenditure but are not governed by Rule 9A due to the definition of cost of production are not to be granted as business expenditure. In other words, if the cost is cost of production of the feature film, it would be governed by Rule 9A. If it is not it would be governed by the provisions of the Act. The Commissioner was, therefore, wholly wrong in holding that the expenditures in question were covered under Rule 9A of the Rules and therefore, not allowable. The Tribunal was correct in coming to the conclusion that such expenditure did not fall within the purview of Rule 9A and therefore, the assessee's claim of deduction was governed by Section 37 of the Act. 11. The Madras High Court in case of CIT Vs. Prasad Productions P Ltd, (1989) 179 ITR 147 (Madras) had occasion to consider somewhat similar issue. It was a case in which the assessee was carrying on the business of production and exhibition of feature films. The assessee had claimed a cost towards preparing positive prints in respect of feature film. The question before the High Court was whether such cost was allowable deduction. The Court held that in view of explanation (ii)(a) to Rule 9A(1) of the Rules, the expenditure incurred for the preparation of the positive prints of the film could not be included within the expression "cost of production". The production and exhibition of film constitutes two different and separate stages. The Court held that in view of explanation (ii)(a) to Rule 9A(1) of the Rules, the expenditure incurred for the preparation of the positive prints of the film could not be included within the expression "cost of production". The production and exhibition of film constitutes two different and separate stages. Therefore, any expenditure in connection with the preparation of the positive prints for the purpose of exhibition would really be a post production expenditure and item of expenditure in relation to the business of production and exhibition of films and therefore, would qualify for deduction as expenditure laid out wholly and exclusively for the purpose of business. 12. Under these circumstances, we do not find any error in the view of the Tribunal. Even if the Commissioner's contention that the expenditure would fall within Rule 9A of the Rules has to be accepted, we wonder whether there would be any implication of the assessee's tax liability, since in the present case, the feature film was exhibited long before the completion of 90 days period before the end of financial year. Even as per Rule 9A, such expenditure was otherwise allowable. Be that as it may, on interpretation of the relevant statutory provisions, we find that the Tribunal is absolutely correct. 13. Learned counsel Mr. Chhotaray, however, raised a contention that the assessee's claim of expenditure under Section 37(1) of the Act had to be established. The same had to be examined by the Revenue Authorities before the same could have been granted. This contention is not sustainable at the hands of the Revenue in the present appeal. The Commissioner, while enhancing the assessment and disallowing the claim of expenditure of the assessee, had merely referred to and relied upon Rule 9A of the Rules. He never stated in his order that even if the assessee is right in claiming the expenditure under Section 37(1) of the Act, the same is not allowable for whatever reason. In the present appeals, such question would be wholly impermissible. 14. Under these circumstances, questions framed in the respective appeals are answered against the Revenue and in favour of the assessee. Both the appeals are dismissed.