Income Tax Appellate Tribunal - Mumbai
Tata Infomedia Limited (Formerly, Tata ... vs Asst. Commissioner Of Income-Tax, ... on 3 January, 2008
ORDER
K.C. Singhal, Judicial Member
1. All these appeals have been heard together and are being disposed of by the common order for the sake of convenience.
2. The only issue arising in the appeals of the assessee relates to the eligibility of deduction Under Section 80Q of the I.T. Act, 1961 (the Act). Briefly stated the facts are that the assessee was engaged in the business of printing and publication of yellow pages directory. It claimed deduction Under Section 80Q in respect of profits derived from such business. The claim of the assessee was denied by the AO on various grounds. Firstly, it was held by him that Tata Yellow pages directory cannot be said to be book for the reasons given in para 2.2 of his order which is extracted below:
2.2 The assessee's contention have been carefully considered. No doubt, the definition of 'book' is very wide but the 'Yellow pages' will within the definition of 'other Publication' of a similar nature by whatever name called as provided in Section 80-Q on which deduction is not available. The Yellow pages basically consist of classified advertisements giving nature of product, address and telephone number of the advertiser. The matter to be printed in the Yellow page is at the discretion of the advertiser, that is, whether it is to be printed in box or in large print or it has to be highlighted or it has to be printed with illustrations. In other words, the advertisements given in the Yellow pages are not materially different from newspapers classified advertisements. The only difference is that Yellow pages is in a bound form and is indexed whereas a newspaper is not indexed. In fact, it is seen from the publication itself that Yellow pages is registered with the Registrar of New Papers in India. Moreover, it is distributed free. Therefore, one of the essential characteristics of a book, that is, its cost, is missing in this case.
Secondly, he was of the view that Tata Yellow pages published by the assessee does not fall within the intended objectives underlying the provisions of Section 80-Q. For this purpose, he referred to the speech of Finance Minister as well as Explanatory Memorandum issued by the board. The relevant portion of the order in this regard is reproduced below:
It is relevant to take into account the Speech of the Finance Minister that was made while introducing the Finance Bill 1991, an extract from which bearing on the subject, deserves verbatim reproduction:
As a token of my commitment to education and research and in recognition of the significant role they have to play in our development process, I propose to extent certain tax concessions that will help in funding of social science research and provide some incentive to authors and publishers.
Similarly, it is also noteworthy to take into account the Explanatory Memorandum, a contained in para 14 thereof, which is reproduced below:
Under the provisions of Section 80-QQ of the Income-tax Act prior to its omission by the Direct Tax Laws (Amendment) Act, 1987, any person carrying on a business in India, of printing and publications of books or only of publication of books without the activity of printing, was entitled to a deduction in the computation of his taxable income of an amount equal to 20 percent of the profits from such business.
It has been observed that the publishing industry has stagnated over the last few years and this is a cause for serious concern. Keeping in view the vital role of publishing industry in the development of human resources, it is proposed to insert a new Section 80-Q in the Income-tax Act to revive the aforesaid tax concession for five years commencing with the assessment year 1992-93.
It will be appreciated that at least in the light of the Speech of the Finance Minister and Explanatory Memorandum, the legislative intent has been transparently brought out indicating the underlying objective of the benefit conferred under Section 80-Q. The emphasis is on education and research as a part of the development process and inducement to authors and publishers. What is kept in mind is also the development of human resources, which is the end result of the process of education and research. Applying the aforesaid tests, it clearly appears that the 'book' published by the assessee does not fall within the intended objectives underlying the provisions of Section 80-Q. Thirdly, he was of the view that Tata Yellow pages falls within the extracted categories of books specified in Section 80-Q(3) by observing as under:
After careful consideration of all the aspects involved, I am of the view that excluded category of books in Section 80-Q(3) is characterised by one common attribute which is that this category enumerates such publications which are not 'authored' as such. The category so excluded indicates the imparting of information either through collection and dissemination of news and events of through advertisements. The sources of such publication are of diverse nature with conspicuous absentee, namely, an author or authors.
Lastly, it was observed as under:
It will also be relevant to take into account the manifest legislative intent as exhibited in the Speech of Finance Minister and Explanatory Memorandum, the simultaneous revival of Section 80-Q on the one hand and Section 80-QQA on the other, the common characteristics running through all the species of the excluded category of 'books' leads me to the conclusion that the 'book' that is published by the assessee is not envisaged to be of such nature which entitles conferment of Section 80-Q. The 'book' published by the assessee is only of informative nature, subserving the purpose of advertisers of the wares and services of the subscribers to the book and, therefore, even qualitatively the contents of the book are similar to the contents of the excluded categories of books provided under Section 80-Q(3).
In view of the above observations, it was concluded by him that the case of assessee did not fall within the scope of Section 80-Q of the Act. Consequently, the deduction under the aforesaid Section was denied by the AO.
3. The matter was carried in appeal before the learned CIT(A) who approved the reasonings given by the Assessing Officer. He also strengthened the view of Assessing Officer by observing as under:
a. that Tata Yellow pages printed by the assessee fell within the excluded items under Sub-section (3) of Section 80-Q on the ground that the same fell within the expression "Other publications of the similar nature by whatever name called" used by the legislature after the words newspapers, journals, magazines diaries, brochers, tracts, pamphlets in Sub-section (3) of Section 80-Q. According to him, there is common thread running through the various items mentioned above i.e. such publications do not have a author. Since there is no author, in Tata Yellow pages, the same could not be described as a book.
b. the litigation arose between Mahanagar Telephone Nigam Ltd. (MTNL) and the assessee according to which, MTNL wanted to prevent the assessee from printed the Yellow pages. The contention of the assessee before the Supreme Court was that Yellow pages was a compilation of advertisements given by the businessmen, traders and professionals which amounted to commercial speech and consequently the assessee could not be prevented from publishing such book namely 'Tata Yellow Pages'. The court upheld the contention of the assessee by observing that Yellow pages is a buyer's guide comprising of advertisements given by traders, businessmen and professionals. Thus, the compilation of such commercial speech could not be equated as a book.
c. The order of the Custom Excise and Gold Control Appellate Tribunal in the assessee's case shows that Yellow pages is nothing other than collection of paid advertisements.
d. that activity of the assessee is that of promoting the products of its clients who had paid to the assessee on account of advertisements and therefore, the profit derived by the assessee was not on account of publication of book but it related directly to the advertisements given by their clients in Yellow pages.
e. Yellow pages is not freely available for sale or distribution at any book shop or book stall and therefore neither it can be described as book nor it can be said that the assessee has published a book.
In support of his observations, the learned CIT(A) relied on the following decisions:
1. New India fisheries Ltd. 82 ITD 765 (Bom)
2. Prom Magnet Pvt. Ltd. 219 ITR 138 (AP)
3. Cholaram 217 ITR 609 (Mad)
4. Laxmi foods & Exports Ltd. 62 ITD 31 (Mum)
5. Ramnatha Puran District co-op. printing works Ltd. 42 ITD 415 (Mad) In view of the above, the learned CIT(A) upheld the orders of the Assessing Officer for both the years. Aggrieved by the same, the assessee is in appeal before the Tribunal.
4. The learned Counsel for the assessee, Mr. Sonde, has vehemently assailed the orders of learned CIT(A) as well as Assessing Officer by making various submissions namely- (i) that word 'book' has not been defined in the Act and therefore, its meaning has to be considered in the common parlance. The dictionary meaning given in the concise Oxford Dictionary, shows that the word 'book' is of widest amplitude since it includes even the bound set of blank sheets for writing or keeping record. Accordingly, the word 'book' would include the Yellow pages printed and published by the assessee; (ii) that the book would not cease to be a book either on the ground that no price is charged by the assessee or on the ground that such book contains advertisements which is the source of profit. An illustration was given that in the case of newspapers, the price charged is negligible one and is hardly sufficient to meet the cost of printing. It is the income from advertisements in the newspapers that assessee earns income, but on that account it cannot be said that assessee is not publishing newspapers which is included in the definition of 'book'; (iii) that Yellow pages could not be excluded under Sub-section (3) on the ground that such book is not authored by any person. The learned CIT(A) was wrong in observing that there is a common thread in various words mentioned in Sub-section (3) in the sense that there is no author in respect of excluded items. It has been pointed out by him that in all the newspapers, the news are authored by their correspondents and even their names are given. Since, the Yellow pages is not similar to any of the items mentioned in the exclusionary provisions under Sub-section (3), the deduction under Section 80-Q cannot be denied; (iv) that the book published by the assessee contains information i.e. list of various persons carrying on various commercial activities along with their address and telephone Nos. This information is made available to the public by distributing it to various Sections of the public, though free of cost, and this amounts to publication of book; (v) that the observations of the lower authorities that Yellow pages is merely compilation of advertisements is factually incorrect since most of the entries in the directory are free listing and only few of them are paid entries by way of advertisements; (vi) that the expression 'social, science, research' used in the circular relied on by the learned D.R. related to research Under Section 35 and therefore was not relevant in interpreting the scope of Section 80-Q; (vii) that any word used in the Statute would include singular as well as plural and therefore, the claim of the assessee cannot be rejected merely on the ground that only one book is published by the assessee. It is irrelevant whether one book is published or more than one book is published. What is to be seen is the business of publication. If the assessee is engaged continuously throughout the year and year after year in the business of publication of book then the claim of the assessee cannot be disallowed; (viii) that all the decisions referred to by the learned CIT(A) are distinguishable on facts. On the other hand, the learned D.R. has strongly supported the orders of the Assessing Officer and learned CIT(A). Since, we have already narrated the reasonings given, by the Assessing Officer and the learned CIT(A) in detail, the same need not be repeated here.
5. Rival submissions of the parties have been considered carefully. The question for our consideration is whether assessee can be said to be engaged in the business of printing and publication of books or publication of books so as to claim deduction Under Section 80-Q of the Act. In order to appreciate the contentions of the representative parties, it would be appropriate to refer to the provisions of Section 80-Q which are reproduced as under:
Deduction in respect of profits and gains from the business of publication of books.
80Q. (1) Where in the case of an assessee the gross total income of the previous year relevant to the assessment year commencing on the 1st day of April, 1992, or to any one of the four assessment years next following that assessment year, includes any profits and gains derived from a business carried on in India of printing and publication of books or publication of books, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent thereof.
(2) In a case where the assessee is entitled also to the deduction under Section 80HH or Section 80HHA or Section 80HHC or Section 80-1 or Section 80-IA or Section 80J or Section 80P, in relation to any part of the profits and gains referred to in Sub-section (1), the deduction under Sub-section (1) shall be allowed with reference to such profits and gains included in the gross total income as reduced by the deductions under Section 80HH, Section 80HHA, Section 80HHC, Section 80-1, Section 80-1 A. Section 80J and Section 80P.
(3) For the purposes of this section, "books" shall not include newspapers, journals, magazines, diaries, brochures, tracts, pamphlets and other publications of a similar nature by whatever name called. (Underlined by us).
6. A bare reading of the above provisions would reveal that deduction Under Section 80-Q is available in respect of profits derived from the business of either printing and publishing of books or business of publications of books. The word 'books' for the purpose of Sub-section (3) would, however, not include newspapers, journals, magazines, diaries, brochers, tracts, pamphlets and other publications of similar nature. It is the activity of publication which is condition precedent for claiming deduction. With this background, let us examine the issues arising in these appeals. The following aspects of the issue are involved for our consideration:
a) whether "Yellow pages" printed by the assessee can be said to be 'book'
b) whether distribution of Yellow pages to various Sections of public(free of cost) amounts to publication;
c) whether 'Yellow pages' can be classified under the excluded category mentioned in Sub-section (3) of Section 80-Q; and
d) whether profit earned by assessee can be said to be derived from the publication of books.
7. At the outset, it may be mentioned that if the language of the Statue is clear and unambiguous, then its natural meaning should be applied and the courts are not required to ascertain the intention of the legislature in such cases. Reliance can be placed on the following observations of the Hon'ble Supreme Court in the case of Keshavji Ravji and Co. v. C.I.T. 183 ITR 1:
As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the Legislature cannot then be appealed to to whittle down the statutory language which is other-wise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the Legislature.
8. The dispute before us relates to the meaning of the words 'books' and 'publication'. In our view there is no ambiguity about these words & therefore its plain and natural meaning of these words has to be seen. First we take up the meaning of the word 'books'. According to the concise oxford dictionary, it means-
1.a.) a written or printed work consisting of pages glued or swen together along one side and bound in covers, b) a literary composition intended for publication (is working on her book). 2.) a bound set of blank sheets for writing or keeping records in. 3.) a set of tickets, stamps, matches, cheques, samples of cloth, etc,, bound up together. 4.) (in Pl.) a set of records or accounts, 5.) a main division of a literary work, or of the Bible (the Book of Deuteronomy). 6.) (in full book of words) a libretto, script of a plat, etc. 7.) colloq. a magazine. 8.) a telephone directory (his number's in the book). 9.) a record of bets made and money paid out at a race meeting by a bookmaker. 10.) a set of six tricks collected together in a card game. 11.) an imaginary record or list (the book of life).
As per Webster's New World Dictionary, it means-
It cannot be disputed that these documents regarded collectively will have to be treated as a 'book', for, the dictionary meaning of that word is nothing but a a number of sheets of paper, parchment, etc., with writing or printing on them, fastened together along one edge, usually between protective covers; literary or scientific work, anthology, etc., distinguished by length and form from a magazine, tract, etc. The perusal of the above dictionary meaning shows that the word 'book' is a word of widest amplitude and would include even a collection of sheets. The Hon'ble Gujarat High Court in the case of C.I.T. v. Elecon Engineering Co. Ltd. 96 ITD 672, after considering the dictionary meaning, observed at page 681 as under:
In this rather wide sense not only a literary or scientific book, book of art, law book, religious book, text book, dictionary and so on but also an account book, minute book, cheque book, pocket diary, note-book and a hundred other varieties of objects satisfying the above description would be books.
In view of the above definition, it was held that drawings and patterns acquired by the assessee amounted to book. This view has been affirmed by the Hon'ble Supreme Court C.I.T. v. Elecon Engineering Co. Ltd. 166 ITR 66 [SC], Similar issue arose in the case of Scientific Engg. Home (P). Ltd. v. C.I.T. 157 ITR 86 SC. In that case, the assessee acquired documentation service comprised of drawings, designs, plans, processing data etc. and claimed depreciation thereon. The question before the Apex court was whether such documentation amounted to 'books'. Their Lordships referred to the dictionary meaning given in Webster's New World Dictionary (already quoted above) and came to the conclusion that the same amounted to 'books' and consequently, the assessee was entitled to depreciation.
9. The above discussion clearly shows that the word 'book' is a word of widest amplitude and as per its natural meaning, would include not only literary or scientific book, book of art, law or religion etc., but also include mere collection of sheets. Thus, it would include even the exercise books used by the students for writing, books of accounts like cash book, ledger, registers etc. used by the businessmen for writing their accounts of business. Therefore, it would be wrong to contend that 'book" would include only literary work or other work authored by some one. The decision of the Tribunal in the case of Ramanatha Puram District Co-op. Printing Works Ltd. (supra) rejecting the dictionary meaning is in conflict with the judgment of the Apex Court mentioned in the preceding para. Hence, the said decision cannot be applied in ascertaining the meaning of the word 'book'
10. We are concerned with Yellow pages which is in the form of a directory listing various persons under various classifications such as Lawyers, doctors, Jewellers, timber merchants & various categories of different traders and professionals. Their addresses and telephone numbers have been provided. If the natural meaning of the word 'book', as discussed above, is applied then, in our humble opinion, the 'Yellow pages' must be held as 'book'.
11. The next aspect of the issue relates to the meaning of the word 'publication'. As per Black's Law dictionary, it means - i. Generally, the act of declaring or announcing to the public ii. The offering or distribution of copies of a work to the public. The verb 'Publish' has been defined as - To distribute copies of work to the public. Similarly, the concise Oxford English Dictionary defines publication as - the action or process of publishing something. The word 'publish' has been defined as under:
1. prepare and issue (a book, journal, or piece of music) for public sale., print in a book or journal so as to make generally known. 2. formally announce or redd (and edict or marriage banns). 3. Law communicate (a libel) to a third party.
The perusal of the above meanings shows that a book can be said to be published when it is offered to public. Such offer may be made either by selling or distributing to the public.
12. Therefore, the expression, "publication of books" used by the legislature in Section 80-Q would refer to only those books which are offered to public in the sense that it enables the public to read or know the contents of the book. Thus, the books which don't contain the reading material would be outside the ambit of the provisions of Section 80-Q. Thus, the books like exercise books, cash book, ledger, registers etc. which otherwise falls within the scope of the word 'book' would not be considered for the purpose of Section 80-Q. This restricted meaning is given considering the context in which the language is used. But there is nothing in its natural meaning that book must be one which is authored by somebody. For example, a publishing house may print a book as a guide for tourists. This may consist of various information collected by it which may be useful for the tourists. It may be without any author but that does not mean that the publishing house has not published it. A Telephone directory issued by Mahanagar Telephone Nigam Ltd. (MTNL) to their subscribers would be considered as a book published by MTNL. Merely because it is distributed free, it does not mean that it is not a case of publication of book. Such book is also not available at book stalls but on that account, it would be wrong to say that such book was not published. Charging of price, in our opinion, is not the condition precedent for bringing the book within the scope of the word 'Publication'. All the factors taken into consideration by the lower authorities in denying the claim of the assessee, in our opinion, are irrelevant. The purpose of publication is to make the contents of the book known to the public either by way of sale or distribution of the same to the public. 'Yellow pages' are printed in lakhs and the same are distributed free to the general public i.e. Corporate houses, Government offices, Businessmen and Professionals as well as to residents of thousands of housing societies in Mumbai. This fact is not in dispute before us. Therefore, such distribution amounts to 'publication' as per its natural meaning. Accordingly, we are of the view that 'Yellow pages' not only were printed but also published by the assessee.
13. The next aspect of the issue is whether the 'Yellow pages' can be said to fall within the excluded category provided in Sub-section (3) of Section 80-Q i.e. newspapers, journals, magazines, diaries, brochers, tracts, pamphlets and other publications of similar nature. The stand of the Assessing Officer is that it is the collection of advertisements which are not materially different form the advertisements given in the newspapers. Hence, it should be treated as similar publication as that of newspaper and therefore should be taken outside the scope of Ssection 80-Q. It is also pointed out that assessee is registered with the registrar of Newspapers which also shows that 'Yellow pages' should be treated like newspaper.
14. We are unable to accept such stand of the Assessing Officer. Every printer of a book and a newspaper is governed by the provisions of 'The Press and Registration of Books Act, 1867'. This Act defines 'book' and 'newspaper' separately. Newspaper is defined to mean any printed periodical work containing public news or comments on public news. As per Section 3, every printer of book or newspaper is required to print legible on it, the name of the printer and the place of printing and if the books or paper is published, the name of the publisher and place of publication. As per Section 9 of the Act, the printed copy of the book is to be delivered to the notified officer. The Registrar of newspapers is required to regulate the working of newspaper only and not the printing and publication of books. There is nothing in the Act that printer or publisher of a book is required to get registered with Registrar of newspapers. Merely because the assessee got itself registered with Registrar of newspapers, no adverse inference can be drawn against the assessee. Even otherwise, the assessee cannot be said to be the publisher of newspaper as per the definition of newspaper given in this Act in as much as no news is published in it. Merely because it contains certain advertisements, it cannot be said to be newspaper or similar to newspaper.
The learned CIT(A) has observed that there is a common thread amongst the excluded items i.e. there is no author in respect of excluded items. We are unable to accept this reasoning also. In all the newspapers, all the news are authored by their correspondents. In all the magazines and journals, the articles published are written by authors. Therefore, it is difficult to hold that there is no author in the excluded items. Accordingly, the learned CIT(A) was not justified in holding that 'Yellow pages' fell within the expression 'other publication of similar nature' used in excluded category in Sub-section (3) of Section 80-Q. It is also not the stand of either Assessing Officer or learned CIT(A) that case of assessee falls under any other excluded items. No other reasoning has been given either by Assessing Officer or by the learned CIT(A) to hold that the expression "other publication of similar nature" would include the 'Yellow pages' published by the assessee. Consequently, the 'Yellow pages' cannot be included in the excluded category specified in Sub-section (3) of Section 80-Q of the Act.
15. The last aspect of the issue is whether it can be said the profit earned by the assessee was from the business of publication of books. The stand of the Assessing Officer is that entire income is generated from the advertisements given in the Yellow pages and there is no income from the sale of Yellow pages as the same is distributed free of cost. Therefore, according to the Assessing Officer, the income cannot be said to be derived from publication of books. On the other hand, the contention of the assessee is that the basic object of the assessee is to carry on the business of publication of books. The manner in which the business is to be carried on has to be left to the discretion of the businessmen. He gave the example of publishing newspapers where the newspapers are sold for insignificant price which is hardly enough to meet even fraction of expenses. In those cases also, the income is generated only through advertisements. Reference was made to the decision of the Tribunal in the case of M/s. Bennett, Coleman & Co. Ltd. wherein similar issue arose and the Tribunal was pleased to hold that the income from advertisements could not be excluded for the purpose of claiming deduction Under Section 80-I.
16. Considering the rival submissions of the parties, we find force in the submission of the learned Counsel for the assessee. As already held, the assessee is in the business of publication of books. It is for the assessee to find out the ways as to how the profits can be earned from such publication. The assessee chose to earn its income through advertisements in the book published by it and such revenue cannot be separated from the activity of the publication. It is because of this publication that assessee was able to earn revenue from the advertisements. No businessmen would give advertisements unless a book of public importance is published. This very issue arose before the Tribunal in the case of Bennett, Coleman & Co. Ltd.. In that case, the assessee claimed deduction Under Section 80-1 which was allowed by the Assessing Officer in respect of the profits earned by the two units of the assessee at Kandivali and Sahibabad. Subsequently, the assessment record was examined by the Commissioner. It was found that the sale price of the newspapers printed by the assessee at the above two units was far less then the cost of printing the newspaper and accordingly he was of the opinion that no profit had been earned by these two units. Revisionary proceedings Under Section 263 of the Act were initiated. In response to the same, it was submitted on behalf of the assessee that the sale of newspapers and income from advertisements in the newspapers were inseparable and both of them had to be considered for working of the profits from these two units. This submission was rejected by the learned CIT. Aggrieved by the same, the appeal was filed before the Tribunal. One of the grounds raised before the Tribunal was as under:
iii) Without prejudice to the ground (2), the Commissioner erred in failing to consider the argument of the Appellant that the revenue of the said printing presses could not be computed merely on the basis of the revenue on sale of the newspapers, but the revenue received on accouni of sale of space for advertisements carried in the said newspapers and the revenue derived on sale of waste newspapers had also to be taken into account.
After considering the submissions from both the sides, the Tribunal vide order dated 30th November, 2004 (ITA No. 3215/M/01), allowed the claim of the assessee by observing as under:
We have considered the rival submissions and perused the materials on record and have gone through the various judgments cited before us by both the parties. We find that the dispute in respect of Kandivali and Sahibabad units is regarding the basis of computing profit for these two units. As per the assessment order, the profit of these two units is calculated by adopting the revenue income on the basis of total pages printed multiplied by market rate of printing of one page and then after including cost of paper and deducting the sale proceeds of waste papers but learned CIT has directed the assessing officer to re-compute the profits by adopting the sale price of news papers without including the proceeds on account of advertisement. We find force in the arguments of learned Counsel of the assessee that if the sale proceeds is adopted for this purpose, then advertisement proceeds should also be considered because both receipts are inseparable since advertisement income is also for publishing of advertisements in the newspapers. We find no fault in the basis adopted by the assessing officer i.e., by calculating the income of these two printing units on the basis of total pages printed multiplied by market rate of printing per page. We also find that the assessing officer has applied his mind by adopting lesser cost of for black and white pages as compared to colour pages. The assessing officer has also considered the audit objection and has deducted the proceeds of waste paper. The basis adopted by the assessing officer is also as per the provisions of Section 80-IA(7) i.e., to treat the eligible unit as the only source of income of the assessee and 80-IA(9) which prescribes that for transfer of goods from the eligible unit to other unit of the assessee company, market rate shall be adopted. From the above, it is clear that the view taken by the assessing officer is at least a possible view and is not a view, which is sustainable in law and hence we are of the considered opinion that as per the judgment of the Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd. (supra), the assessment order with regard to Kandivali and Sahibabad units cannot be treated as an erroneous order prejudicial to the interest of the revenue and hence the order of learned CIT with regard to these two units is not sustainable.
(underlined by us) The above decision was followed by the Tribunal while disposing the appeals of the above company in respect of Assessment Year's 1993-94 and 1995-96. The latter decision is dated 4th June, 2007. It is clear from the above decision that revenue from advertisements cannot be ignored while computing the profits derived from the industrial undertaking. For the similar reasons, we are of the view that income generated from advertisements cannot be ignored and will have to be taken into consideration while computing the income derived from the business of publication of books.
17. In view of the above discussion, it is held that assessee was engaged in the business of publication of books in terms of the provisions of Section 80-Q of the Act and consequently, the assessee was entitled to deduction under the aforesaid section. The orders of the learned CIT(A) are therefore set aside and consequently, the Assessing Officer is directed to allow the deduction Under Section 80-Q of the Act.
18. Now we take up Departmental appeal. First issue relates to the disallowance Under Section 43B in respect of contribution to Provident Fund and Family Pension Fund. The Assessing Officer disallowed the claim of the assessee on the ground that payments were made beyond the due ate specified in the respective enactments .However, the learned CIT(A) found that payments were made by the assessee within the grace period and subsequently it was held that no disallowance can be made. Aggrieved by the same, the Revenue is in appeal before the Tribunal. Both the parties have agreed that this issue is covered against the Revenue by the decision of the Tribunal in assessee's own case for the Assessment Year 1993-94. Accordingly, we do not find any infirmity in the order of learned CIT(A).
19. The next issue is whether the interest received by the assessee from its clients should be assessed as 'Business Income' or 'Income from Other Sources'. The Assessing Officer assessed the same under the head 'Income from Other Sources' while the learned CIT(A) has directed the Assessing Officer to assess the same as 'Business Income'. After hearing both the parties, we find that this issue is also covered against the Revenue by the order of ITAT in assessee's own case for the Assessment Year 1993-94. Accordingly, we do not find any infirmity in the order of learned CIT(A).
20. The next issue relates to charging of interest Under Section 220(2) of the Act. There is no discussion in the assessment order on this aspect of the issue. However, it has been observed by the learned CIT(A) that no demand as per notice Under Section 156 for the year under consideration was pending beyond 30 days. In view of the same, the interest levied by the Assessing Officer must be deleted. Aggrieved by the same, the Revenue is in appeal before the Tribunal. After hearing both the parties, we do not find any merit in the appeal of the Revenue on this issue. The perusal of Section 220(2) clearly shows that interest can be levied only where the amount specified in notice of demand Under Section 156 is not paid within the period specified under Sub-section (1). There is a specific finding by the learned CIT(A) that no demand was pending beyond the period specified. Accordingly, we do not find any infirmity in the order of learned CIT(A).
In the result, the appeal of the Revenue is dismissed while the appeals of the assessee are allowed.
Order pronounced on 3rd January, 2008.