Per A. Kalyanasundharam, A.M. - The assessee. a limited company, has filed this appeal aggrieved by the order of CIT (Appeals) and has raised as many as nine grounds of appeal, before us. This appeal has two distinct parts, issues raised as grounds 1&2 are related to the computation of the book profit under section 115J of the Act and issues raised as grounds 3 to 9 relate to the computation of the profit and gains from business or profession within the meaning of sections 28 to 43A of the Act. The counsel addressed us Initially with reference to grounds numbering 3 to 9, followed by the grounds numbering 1 & 2 and we are dealing with the issues as raised, as argued before us, in that order.

2. The assessee, has raised a very strange claim as its grounds of appeal No. 3, and had contended that, the statutory deduction under section 37(2A) of the Act. of Rs. 5,000 is to be allowed from the profit of each of the business units, treating them to be separate undertakings. The contention was that, the authorities below, were in error in allowing one consolidated statutory deduction of Rs. 5,000 on the entertainment allowance, while Rs. 5,000 should have been allowed as a deduction from the profits of each of the business units. The plea was that, this claim has the recognition in Garden Silk Wvg. Factory v. CIT [1991] 189 ITR 512 (SC), Dr. BA. Rajakrishnan v. ITO [1986] 15 ITD 33 (Coch.), First ITO v. Yash Raj Chopra [1984] 10 ITD 709 (Bom.) and by the Special Bench in Ranbir Raj Kapoor v. ITO [1988] 25 ITD 56 (Bom.)(SB). The departmental representative placed reliance on the orders.

3. The rival submissions in this regard have been given our very careful consideration. Section 37(2A) of the Act prescribes amount of allowance from the expenditure in the nature of entertainment incurred by an assessee, while computing the income from profits and gains from business or profession, of that assessee. It states that, the maximum allowance is limited to ½ or Rs. 5,000, whichever is higher on the first Rs. 10 lakhs of the profit and gains from business or profession, on the next Rs. 40 lakhs of the profits or gains from business or profession ¼% shall be allowable and on the balance of the profits and gains from business or profession 1/40/6 shall be allowed. The assessee, may be having several business units, but, since, the emphasis of allowance is on the assessee, it clearly is suggestive of the consolidated amount expended on entertainment expenditure by an assessee. Therefore, the statutory deduction of Rs. 5,000 is allowable to the assessee, only once and not severally as pleaded by the assessee, unless each of the business units themselves are separate assessees. The plea of the assessee of treatment of each of the business unit separately, has been raised with reference to the various decisions cited by it, in which cases, the issue revolved around deductibility of expenditure in the nature of advertisement. publicity or sales promotion under section 37(3A) of the Act. In all those decisions, the issue was with reference to sub-section (3D) of section 37. which stated that, the provisions contained in sub-section (3A), would not apply to an assessee who has set up an industrial unit in the previous year to manufacture or produce any article or thing, in the year in which the production commences and to the following two previous years. There being no such similar reference in sub-section (3D) to section 37. to the sub-section (2A) of section 37. the decisions are not applicable to the present issue before us. The ratio in Garden Silk Weaving Factory is only suggestive of the normal manner of computation of income from business, i.e., it only suggests that. the income from business of each of the business unit is to be computed and then to be aggregated, for determination of the income from business of the assessee. It does not lay down the proposition that is desired by the assessee, because, in the computation of the allow