Law:

Section:

Section 2(6)(d) of the Finance Act, 1968 - Industrial company - Assessee company was publisher of fortnightly journal - Actual printing was done by different concern and assessee was engaged in folding and stitching of printing sheets so as to be used as parts of journal which were later on dispatched to subscribers - Whether assessee was engaged in processing of goods and, therefore, was liable to pay income-tax as an industrial company on its total income at rate of 55 per cent - Held, yes FACTS The assessee was the printer and publisher of a fortnightly journal. The printing of the journal was done in the press till it was sold to a proprietary concern and thereafter, the assessee got the printing work done from the said proprietary concern. The printing charges were paid by the assessee. After printing, the printed sheets were handed over to the assessee. Folding and stitching of those printed sheets were done by the assessee by employing some labour contractors. Thereafter, they were packed and dispatched by the assessee to the various subscribers. The ITO held that the assessee was not an industrial company and, therefore, levied income-tax at the rate of 65 per cent which was applicable to non-industrial companies. The AAC confirmed the order of the ITO. On further appeal, the Tribunal held that the assessee was entitled to the benefit of the rate of tax at 55 per cent, under Paragraph F of the First Schedule to the Finance Act, 1968. On reference : HELD The printing having been done by a different concern, the question as to whether the assessee had been carrying on the business of manufacture would not arise on the facts of the instant case. However, the expression used in section 2(6)(d) is "manufacture or processing of goods". Therefore, it is enough if the assessee, in order to get the benefit of this provision, is engaged in the "processing" of goods. The goods in the instant case would be the parts or volumes of the journal. The "processing" engaged in by the assessee was to fold and stitch the printed sheets and convert them into parts or books, as the case might be, which were later on dispatched to the subscribers. This would constitute…

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