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TMI Blog2004 (10) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... e and not on the income from printing and publishing of magazines as considered by the Assessing Officer, that is to allow 80-I deduction of Rs. 10,30,418 instead of Rs. 5,10,651 allowed by the Assessing Officer." 3. The facts are that the assessee company is engaged in the business of publishing and the main object of the company is as under: "To carry on the business of printers and publishers of any newspapers, journals, magazines and other literary works, undertakings and publications including printing of reports, accounts statements and stationery calendars, pictures and other works of art." During the course of the aforesaid business activity, the assessee is publishing weekly/fortnightly magazines called 'Capital Growth', 'New ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,803 Special and others Rs. 43,005 --------------- Rs. 1,30,80,659 Less: Subscription refund Rs. 10,41,681 --------------- Rs. 1,20,38,978 --------------- On the above basis, the Assessing Officer disallowed deduction under section 80-I with regard to the following income: Sales of Capital Growth Rs. 8,47,209 Sales of Share Price Data Rs. 1,63,350 Sales of Capital Online Rs. 19,31,960 Advertisements Rs. 1,19,42,552 Closing Stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Electricity Board for the supply of electricity for running the industrial undertaking could not be said to flow directly from the industrial undertaking itself and was not profits or gains derived by the undertaking for the purpose of the special deduction under section 80HH." The ld. DR has also invited our attention to the ITAT 'F' Bench, Mumbai Order dated 24-2-2004 in the case of M/s. Orient Press Ltd. in ITA No. 5915/Mum./96, to which one of us (Accountant Member) was a party. The ld. DR submitted that in the above case, the Supreme Court decisions in the case of Pandian Chemicals Ltd. as also in the case of Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (SC) have been considered and analysed. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earlier decision of the Apex Court in the case of Cambay Electric Supply Industrial Co. Ltd., it was observed that the expression 'derived from' had a narrower connotation than the expression 'attributable to'. The Supreme Court, further observes that the words 'derived from' must be understood as something which has a direct or immediate nexus with the appellant's industrial undertaking. The Hon'ble Supreme Court observed that the electricity may be required for the purposes of industrial undertaking, but the deposit required for this purpose is a step removed from the business of the industrial undertaking and therefore interest on such deposit cannot be said to be flowing directly from the industrial undertaking. Therefore, before a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amount of Rs. 2 only. The main receipts would be from publishing of advertisements. In our view, the income from publishing of advertisements is an integral part of the publishing business and therefore, such income is eligible for deduction under section 80-I. Similarly, we hold that income from publishing/sale of magazines like 'Capital Growth', 'Share Price Data' and 'Capital Online' is also eligible for deduction under section 80-I. 8. The miscellaneous income of Rs. 1,08,940 comprises of the following: Subscription Centre Rs. 40,000 Raddi sale Rs. 67,317 Miscellaneous Rs. 1,045 The details are placed at page 42 of the Paper Book. In our view, the raddi sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in entirety. The principles which have to be considered and applied have already been laid down by us while deciding the Departmental appeal for the assessment year 1992-93. The disputed items are accordingly dealt with as under. 11. Deduction would be allowable on income of Rs. 31,02,490 from sale and subscription of the magazine 'Capital Growth'. Similarly, deduction would be available on income of Rs. 22,27,121 and Rs. 25,97,572 on sale of magazines 'Share Price Data' and 'Capital Online', respectively. The receipt of Rs. 8,885 from Railways for loss of magazines in transit would also be eligible for deduction. The nature of Rs. 100 from 'Demo Diskette' could not be explained by the ld. counsel and therefore deduction will not be a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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