This is departmental appeal. only point to be decided is extent of cost of production of feature film under r. 9A(1). assessee, individual, and during accounting year completed n d released feature film by name "Veeru Ustad". books of account showed total cost of be Rs. 20,05,424. During accounting year concerned, assessee had sold distribution rights in respect of all territories excepting territories of Bombay, A. P. and Mysore. According to provisions of r. 9A, cost attributable to these territories would be Rs. 5,69,850. In books of account, however, assessee had valued balance of undistributed areas at Rs. 3,58,425. return filed by assessee was based on above figures. ITO, however, was of opinion that value as per r. 9A in respect of these territories must be included in assessment. Thus, addition of Rs. 3,33,321 was made. On appeal, CIT (A) found that assessee was unable to realise cost i n respect of areas as he had anticipated. As matter of fact, he could realise only much less value fixed in books of account in respect of these areas. In view of these facts, he was of opinion that provisions of r. 9A(9) would be applicable and under those circumstances there was no case for making addition. CIT (A) had also considered alternative ground. In alternative ground, he found that total cost of production was not Rs. 20,05,424 but Rs. 14,51,930. On that basis also, there could be no addition. department, has now come on appeal. Initially, Shri Ruhela, ld Departmental Representative, submitted that CIT (A) had admitted additional evidence e while considering alternative plea and since ITO was not given opportunity to meet point, CIT (A)'s order should be set aside. In respect of main point, i.e., whether r. 9A(9) would be applicable, he was of opinion that rule was not intended to cover cases like this and that rule had no application. Shri Harish, ld. counsel for assessee, on other hand, submitted that before close of accounting year, assessee had realised that picture was flop. it is evidenced by fact that although there were agreements of distributors in respect of these territories for taking over prints, they did not come forward at all although six months had elapsed after certificate by Censors. Ultimately, Bombay area was sold only for Rs. 40,000. Thus, assessee had incurred loss in this deal. He submitted that provisions of r.9A(9) would cover such cases and, therefore, claim was properly allowed by CIT (A). In respect of alternative submission, he pointed out that all facts were before ITO and no new evidence was led. We have considered facts of case. There is no dispute that provisions of s. 9A are applicable. In fact, both assessee and department proceeded only on that basis. Therefore, only point we have to see is whether under provisions assessee can get cost of production allowed as deduction even in respect of areas where distribution ship has not been sold. Shri Ruhela submitted that under r. 9A there is not concept of valuation of closing stock. assessee's claim that they can value closing stock at figure less than cost has added dimension to question which is really not provided in r. 9A. While we agree with Shri Ruhela that r. 9A does not specifically refer to valuation in respect of territories not yet sold, rule does not envisage certain value being carried forward to subsequent year. Sub-r. (6) provided that balance of cost of production should be carried forward to next year and allowed as deduction in that year. department has also understood that there was case for valuation of such unsold distribution areas. It will, therefore, not open for us, at least in this case, to hold that such valuation is not possible. Once we come to finding that such valuation is possible, next issue is whether value placed by assessee would be correct figure. As pointed out by Shri Harish, although film was passed by Censors as early as October 1977, till end of March 1978, distributors in respect of Bombay and Andhra Pradesh and Mysore had not come forward to take delivery of prints. result of first there months after release of film (the film was released on 6th Jan., 1978) was also available by end of accounting year. It is, therefore, possible for assessee to evaluate whether picture will year. It is, therefore, possible for assessee to evaluate whether picture will pay itself or not. It was quite clear that picture was not profitable. Therefore, loss had already been incurred by assessee during accounting year concerned. All these facts had been taken into account by assessee when he had valued undistributed areas at Rs. 2,41,000 instead of Rs. 5,74,221. We will, therefore, uphold order of CIT (A) on this point. It is true in alternative submission CIT (A) had looked into certain details which were not before ITO. Therefore, we will not place our finding on basis of statements given in alternative submission. departmental appeal stands dismissed. *** EIGHTH INCOME TAX OFFICER v. RAMDAYAL