effective ground in this departmental appeal relating to assessee's assessment for assessment year 1980-81 is against deletion of disallowance of Rs. 2,21,839 made out of advertisement expenses by ITO under section 37(3A) of Income-tax Act, 1961 ('the Act'). assessee, individual, is film producer. During year under appeal, he has released two pictures styled 'Kalapathar' and 'Noori'. Finding that assessee had incurred expenditure of Rs. 14,78,920 on advertisement on above two pictures, ITO has, by applying provisions of section 37(3A), disallowed sum of Rs. 2,21,839 out of it being 15 per cent of total expenditure. assessee's contention that his case was covered by provisions of section 37(3D) and that, therefore, disallowance was not justified has been rejected by ITO who has also rejected assessee's alternative claim that in case disallowance is at all justified, it would have to be restricted to Rs. 1,59,640 as amount to be processed for disallowance under section 37(3A) was Rs. 10,64,261 and not Rs. 14,78,920. 2. It was submitted before Commissioner (Appeals) that assessee had set up 'industrial undertaking' for purpose of producing films and that each movie amounted to fresh undertaking so much so that provisions of section 37(3D) were applicable in this case. This submission has been rejected by Commissioner (Appeals) who has held that assessee is established film producer and it cannot be accepted that he has to set up fresh industrial undertaking at time of starting of new picture. However, Commissioner (Appeals) accepted assessee's alternative contention, namely, that assessee having started production of these two films in year 1978, provisions of sub-section (3A) which were introduced in Act with effect from 1-4-1979 were not applicable in this case. 3. Aggrieved by order of Commissioner (Appeals), department has come up in appeal. It is submitted that provisions of section 37(3A) have been inserted by Finance Act, 1978, with effect from 1-4-1979 which means for assessment year 1979-80 onwards. According to departmental representative, fact that assessee started production of his pictures in 1978 was not of any consequence. law in this regard is stated to be well settled. Having himself held that provisions of section 37(3D) were not applicable in this case, departmental representative argued that Commissioner (Appeals) was not justified in deleting disallowance of Rs. 2,21,839. 4. On other hand, Shri V.H. Patil, learned counsel for assessee, submitted that there is dichotomy between assessee and industrial undertaking set up by him. While assessee has, no doubt, set up his business as film producer, for each movie he takes up, he has to set up separate industrial undertaking in sense he has to select story, give name to picture, get same registered, appoint director, choose hero and heroine, music director and so on and so forth. All these persons may or may not be common to all his films. Assuming that some of them are common, agreement with each such person is entered specifically for particular movie. In other words, submission is that in case of film producer each movie requires separate industrial set up and movie is, of course, separate product. Alternatively, Shri Patil submitted that use of expression 'such articles' in sub-section (3D) of section 37 makes it clear that emphasis is on articles produced and not on industrial undertaking. In this context, he invited our attention to fact that unlike section 80J of Act, industrial undertaking need not be new. Reliance for this purpose is placed on decision of Bombay High Court in case of CIT v. Tata Locomotive & Engg, Co. Ltd. [1968] 68 ITR 325 where it was held that assessee was not new industrial undertaking even though assessee had started manufacturing same articles which it was assembling earlier because word 'such' was not used before word 'articles' in that section. It is urged that above decision indirectly lays down that where word 'such' is used before word 'articles', articles assume importance. 5. In reply, departmental representative invited our attention to expression 'where assessee sets up industrial undertaking for purpose . . . producing articles . . .' used in section 37(3D). It is stated that assessee may have started new films but industrial undertaking had been set up long back and since relief envisaged in sub-section (3D) is available to assessee for three years only, sub-section has no application in case assessee for three years only, sub-section has no application in case of assessee. There is also no scope for holding that each film constitutes separate industrial undertaking, though it may constitute separate production. 6. Having heard parties and after going through material on record, we find that assessee is well established producer. He does not own studio. As producer, his business is to produce movies/pictures. Whenever, he decides to take up movie for production, he selects story, gives name or title to it, gets name registered, appoints director, chooses hero and heroine, other actors and actresses, music director, play-back singers, so on and so forth. He also decides about studio where shootings will be done as also laboratory where film will be developed and edited. We are given to understand that separate accounts are maintained for each movie/picture so produced. Though sometimes some of personel, studio or laboratory are common to more than one movie produced by him, it is not necessary that it has to be so. In any event, agreements are specific for each movie/picture. These are facts common to almost all producers and, therefore, there cannot, possibly, be any dispute about them. 7. Section 37(3A) admittedly, came to be inserted in Act by Finance Act, 1978, with effect from 1-4-1979. Therefore, in view of settled legal position, namely, Act as it stands amended on first day of April in financial year must apply to assessment for that year, we have no difficulty in holding that Commissioner (Appeals) was not justified in his conclusion that provisions of section 37(3A) are not applicable in this case on ground that production of two pictures had started in year 1978. To our mind, what is pertinent for deciding applicability of provision is not previous year but assessment year. Accordingly, we accept departmental representative's submission that provisions of section 37(3A) are applicable in this case. However, other question, namely, whether provisions of section 37(3D) similarly inserted are also applicable in this case so as to take case o u t of purview of section 37(3A), in our opinion, requires careful consideration. For this purpose, it is desirable to refer to provisions of section 37 which read as under: " (1) Any expenditure not being expenditure of nature described in sections 30 to 36 and section 80VV and not being in nature of capital expenditure or personal expenses of assessee, laid out or expended wholly and exclusively for purposes of business or profession shall be allowed in computing income chargeable under head 'Profits and gains of business or profession'. (3D) In case where assessee has set up industrial undertaking for manufacture or production of any articles, nothing in sub-section (3A) shall apply in respect of any expenditure on advertisement, publicity or sales promotion incurred by assessee, for purposes of business of such undertaking, in previous year in which such undertaking begins to manufacture or produce such articles and each of two previous years immediately succeeding that previous year. " There is evidently dichotomy between assessee and industrial undertaking to be set up by assessee. term 'industrial undertaking' has been used in this section as well as in several other sections of Act but there is no definition except one for purpose of section 33B of Act. law is fairly settled in this regard. In absence of statutory definition, Courts have to adopt meaning of expression as understood in common parlance. In common parlance, industrial undertaking would mean new set up, paraphernalia or organization for particular purpose. We have already indicated how many things producer requires for taking up venture, like producing movie. It is not requirement of section 37(3D) that such industrial undertaking should be new. requirement is that it should be industrial undertaking set up for manufacturing or producing any articles. Having regard to this aspect, we are inclined to hold that each movie in case of producer is separate and independent industrial undertaking and, therefore, provisions of section 37(3D) are applicable and not those of section 37(3A). 8. It may not be out of place to mention that our above interpretation is also justified on equitable grounds. reason behind provisions of section 37(3D) appears to be that advertisement expenditure on new product including movie/picture in initial stages should be allowed in full as that is bare necessity for carrying on of business while after few years necessity may or may not be so much. In case of film producer, movie/picture is new product which requires separate establishment and new advertising machinery. No doubt, banner under which it is produced has also some advertising value but main thing is picture or cast and not banner. 9. In result, departmental appeal is dismissed though for different reasons. *** FIRST INCOME TAX OFFICER v. YASH RAJ CHOPRA