Cit Vs. Mac Millan India Ltd.

Cit vs Mac Millan India Ltd.

Type Court Judgment Court Chennai Decided Dec 10, 2001

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Citation: sooperkanoon.com/829201
Court: Chennai High Court
Decided On: Dec 10, 2001
Case Number: Tax Case No. 284 of 2000 10 December 2001
Subject: Direct Taxation

Case Summary

AI-generated summary - not the official court judgment text.

Counsels: Mrs. Chitravenkatraman, for the Revenue P.P.S. Janardhanaraja, for the Assessee In the Madras High Court R. Jayasimha Babu & A.K. Rajan, JJ. - CONSTITUTION OF INDIA Article 141; [A.P. Shah, C.J., F.M. Ibrahim Kaliffulla &V. Ramasubramanian, JJ] Reference to Larger Bench - Precedent - Full Bench decisi...

Key legal issue: Direct Taxation

Parties & Advocates

Appellant / Petitioner

Cit

Advocate Mrs. Chitravenkatraman, <i>for the Revenue </i>P.P.S. Janardhanaraja, <i>for the Assessee</i>

Respondent

Mac Millan India Ltd.

Legal References

Reported In: [2003]130TAXMAN498(Mad)

Excerpt

counsels: mrs. chitravenkatraman, for the revenue p.p.s. janardhanaraja, for the assessee in the madras high court r. jayasimha babu & a.k. rajan, jj. - constitution of india article 141; [a.p. shah, c.j., f.m. ibrahim kaliffulla &v. ramasubramanian, jj] reference to larger bench - precedent - full bench decision held, it is binding on the division bench. only if the full bench comes to conclusion that earlier full bench decision is incorrect, there is scope for making reference to larger bench. division bench doubting correctness of full bench decision cannot direct registry for placing papers before chief justice to make reference to larger bench. .....only on the net business income and not on the net income of publishing activity only as claimed by the assessee. on appeal, the commissioner (appeals), following the decision of the tribunal in assessee's own case for assessment years 1981-82 and 1982-83 directed the relief under section 80-oo should be granted without deduction 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,'whether, on the facts and in the circumstances of the case, the appellate tribunal was right in holding that the assessee is entitled to deduction under section 80-oo at the rate of 20 per cent on the total profits derived from the business carried on in india and not on the net income after setting off the loss of the non-manufacturing division?'2. with respect to the same assessee similar issue had been decided by this court in the case reported in cit v. macmillan co. of india ltd. : [2000]243itr403(mad) 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 be set 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 under section 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.3. in the circumstances, the question referred is answered in favour of the revenue and against the assessee.

Full Judgment

ORDER

A.K. Rajan, J.

The assessee is a company. While completing the assessment for the year under consideration, the assessing officer allowed a deduction of Rs. 3,25,140 as against Rs. 8,55,037 claimed by the assessee as deduction at 20 per cent on its profits from publishing under section 80QQ of the Act. The assessing officer 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 Commissioner (Appeals), following the decision of the Tribunal in assessee's own case for assessment years 1981-82 and 1982-83 directed the relief under section 80-OO should be granted without deduction 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,

'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee is entitled to deduction under section 80-OO at the rate of 20 per cent on the total profits derived from the business carried on in India and not on the net income after setting off the loss of the non-manufacturing division?'

2. With respect to the same assessee similar issue had been decided by this court in the case reported in CIT v. Macmillan Co. of India Ltd. : [2000]243ITR403(Mad) 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 be set 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 under section 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.

3. In the circumstances, the question referred is answered in favour of the revenue and against the assessee.

Same Court & Year Chennai · 2001 Same Parties Cit vs Mac Millan India Ltd. Same Subject Direct Taxation

Direct Taxation