COMMISSIONER OF INCOME TAX Vs. MACMILLAN INDIA LIMITED

JUDGEMENT

(1.) THE assessee is a company. While completing the assessment for the year under consideration, the AO allowed a deduction of Rs. 3, 25, 140as against Rs. 8, 55, 037 claimed by the assessee as deduction at 20per cent on its profits from publishing under s. 80QQ of the Act. THE AO held that according to the allocation of income between the three activities carried on by the assessee, the result from trading in books was a loss of Rs. 39, 85, 365 and that deduction was admissible only on the net business income and not on the net income of publishing activity only as claimed by the assessee. On appeal, the CIT(A), following the decision of the Tribunal in assessee's own case for asst. yrs. 1981:82 and 1982:83 directed the relief under s. 80:QQshould be granted without deducting the loss in the trading in books. On further appeal by the Revenue, Tribunal dismissed the same. Under the circumstances the question referred to us is.

(2.) WITH respect to the same assessee similar issue had been decided by this Court in the case in CIT vs. Macmllan Co. of India Ltd. wherein this Court held that while the assessee had made a profit in the business of printing and publishing, it had suffered a loss in its business of trading. The loss incurred in the latter business was required to beset off against the profit earned in the business of printing and publishing before arriving at the gross total income of the assessee under, the head "Business". Therefore, the deduction unders. 80QQ was required to be made with reference to the gross total income so calculated and not by excluding the loss suffered in the trading activity which admittedly was one of the business carried on by the assessee.