TMI Blog1937 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... (XI of 1922) and consequently allowable as a deduction in computing the profits or gains of the business for the assessment year 1936-37. The facts of the case were these: The assessee is the Limited Company known as the Amrita Bazar Patrika Ltd., and its business is that of editing, publishing and selling a paper called 'The Amrita Bazar Patrika'. On the 23rd March 1935, it published in its daily edition in Calcutta a leader with the caption Calcutta High Court and in that leader certain observations were made which reflected upon the independence of judiciary. On the 29th March 1935 a Rule was issued by the Court calling upon the Editor and the Printer and Publisher of the Patrika to show cause before the Court on the 5t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee under the head Business in respect of the profits or gains of any business carried on by him . Sub-sec. (2) says that such profits or gains shall be computed after making certain allowances. Then follow a catalogue of allowances, No. (ix) of which is described thus:- any expenditure (not being in the nature of capital expenditure) incurred solely for the purpose of earning such profits or gains. The assessee urged before the Commissioner of Income Tax that a newspaper has two functions-one, the conveying of news, and the other, that of serving as a guide and adviser seeking to form opinion and to influence the action of the public. As regards the second aspect, it is suggested that some privilege is extended to the publicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question which we have to answer is simply this: Can it be said that the expenditure which the limited company chose to incur was an expenditure incurred solely for the purpose of earning profits or gains? In our opinion, the question almost answers itself. It is difficult, indeed, to see by what process of reasoning it could really be argued that this particular expenditure was incurred for the purpose of earning profits or gains. It is to be remembered that the proceedings in contempt were against the Editor and the Printer. The expenditure primarily was incurred by them. As far as we know, there was no sort of obligation on the Limited Company to reimburse either the Editor or the Printer for the expenses they had incurred. In any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is made out of the profits of the trade. It must be made for the purpose of earning the profits. In short I agree with the judgment of the Master of the Rolls . The learned Commissioner has referred to the case of Commissioners of Inland Revenue v. Alexander Von Glehn Co. Ltd., (12 Tax Cas. 232). In that case the Respondent company had carried on business as general produce merchants and exported goods to Russia and Scandinavia. It was sued for penalties under the Customs Act, 1915, in respect of alleged infringements of that Act in the course of its trade. The actions were settled by consent on the company agreeing to pay a compromise penalty of 3,000 without costs upon terms that the record was withdrawn. The company incurred leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion whether the expenditure was one properly incurred for the purpose of earning profits or gains. We are clearly and definitely of opinion that it was not. The question propounded for our consideration must, therefore, be answered in the negative. The assessees will pay the costs of this reference, on the usual scale, including the fees of two Advocates appearing on behalf of the Commissioner of Income Tax. PANCKRIDGE, J.:-- I only desire to add a few words to the judgment which has just been delivered. I agree that, in the circumstance, the question propounded by the Commissioner is a question of fact, and we are not entitled to go behind his finding. Moreover, in my judgment, there were no materials before the Commissioner upon wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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