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TMI Blog1980 (3) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... s publishing an English magazine, " Thought ". The assessee approached an organisation known as " Worldwide Partnership " (for solidarity with Africa, Asia and Latin America) with its headquarters at Bonn for some financial assistance. In a letter dated October 1, 1962, addressed to the above organisation the assessee explained that the little magazine run by it suffered from indifferent quality primarily because it was unable to pay adequately to the writers. It was pointed out that the assessee was keen to give a brighter look to the magazine by way of improving its format and layout and also help the contributors if it could have some help in the matter. The organisation replied by a letter dated October 17, 1962, from which it appears t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purposes of its business and with the object of improving the get-up and the layout of the magazine and to put it on a more stable economical footing. The amount of Rs. 28,342, though solitary in character, had been given to the assessee as a result of the business activity of the assessee-company and could not be said to be a donation without any consideration. The Tribunal, therefore, held that the donation was a business receipt liable to income-tax under the Act. Aggrieved by the above decision of the Tribunal the assessee moved the Tribunal to make a reference to this court. The question which has been referred to us for our decision is : " Whether, on the facts and in the circumstances of the case, the sum of Rs. 28,342 receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion is whether it could be said to arise from the business of the assessee. The Tribunal has held that since the assessee is conducting a newspaper and the payment was asked for and given as result of the business activity of the assessee-company, it should be treated as a receipt arising from business. We are unable to agree with this conclusion. Though it is mentioned that the foreign organisation had been formed for the promotion of literary and educational facilities and though the assessee also requested this organisation for financial assistance by taking a large number of subscriptions or giving a subsidy, this request was not acceded to by the organisation. The letter from the organisation dated October 17, 1962, makes it clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces rendered to the Government and, therefore, the facts negatived their being a subsidy. On the other hand, in the present case, no service were rendered by the assessee to the foreign organisation nor was there any mutual or commercial arrangement between the donor and the assessee as to the terms for the provision of financial assistance to the assessee. The payment was purely by way of a donation or a gift. The facts and decision in Seaham Harbour Dock Co. v. Crook [1931] 16 TC 333 (HL), referred to by the Supreme Court in the above case, are of interest. In that case, a dock company, contemplating an extension of its dock, applied for financial assistance to the unemployment grants committee. The committee sanctioned grants from time ..... X X X X Extracts X X X X X X X X Extracts X X X X
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