T. N. C. RANGARAJAN, J.M.: This appeal by Revenue is directed against order of AAC holding that curbs on advertisement expenditure laid down by sub-s. (3A) are not to be applied in case of assessee because of exception under sub-s. (3D) of s. 37. assessee is individual. During previous year ended 31st March, 1979 relevant to asst. yr. 1979-80 assessee produced film called "Malargalil Ithanai Nirengalal". In computing total income which returned as loss of Rs. 7,984, assessee had taken into account total publicity express at Rs. 55,039. ITO applied ceiling prescribed under s. 37(3A) and disallowed sum of Rs. 8,255. On appeal, AAC was of opinion that assessee had set up industrial undertaking fore manufacture of films and hence exempt from ceiling. He relied on Circular of CBDT No. 24 [F. No. 6/22/68-IT(A-I)] dt. 23rd July, 1969 as well as order of CIT(A) in case of M/s Dhakshyani Combines in ITA No. 38/80-81 dt. 30th Sept., 1981. Revenue is in appeal to contend that Circular of CBDT was issued under s. 104 of IT Act and was not relevant to issue in question and that assessee had no particular factory which could be identified as industrial undertaking. On other hand, assessee has filed certification from Chartered Accountants to effect that assessee commenced business only in financial year 1978-79 and that activity itself should be considered to be of industrial undertaking. It has been held by Madras High Court in case of CWT vs. P. T. N. Shenbagamoorthy & Anr. (1983) 35 CTR (Mad) 144, that undertaking normally is understood as business work or project which one engages or deals as enterprise. It was observed that it refers to activity such as trade or business or to actual activity of manufacture and it does not refer to any asset as such. Sub-s. (3D) of s. 37 states that in case where assessee has set up industrial undertaking for manufacture or production of any article nothing contained in sub-s. (3A) shall apply in year in which undertaking begins to manufacture or produced such article and each of two previous year. In view of decision of Madras High Court and in view of admitted position that assessee had commenced manufacture of films in this previous year, it appears to us that provisions of sub-s. (3D) are directly attracted to facts of case. We, therefore, agree with finding of AAC that advertisement expenditure of assessee cannot be restricted by provision of sub-s. (3A) of s. 37. We, therefore, confirm his order. appeal is dismissed. *** THIRD INCOME TAX OFFICER v. V. D. S. SUNDARAM