Law:

Section:

Section 2(6)(d) of the Finance Act, 1968 – Industrial-company – Assessee-company was publisher of books – It was to get manuscript for publication, hit upon suitable formula for book, get it printed as per its requirements under its supervision, get book bound after suitable changes and then put out publication for sale – Printing and bindings of books were done from outside as assessee did not have its own printing press – Whether in order that a publisher of books should be manufacturer of books it is wholly unnecessary for him either to be owner of printing press or to be book-binder himself – Held, yes – Whether, therefore, it could be held that assessee was engaged in manufacturing or processing activity and, as such, was entitled to be taxed at concessional rate – Held, yes FACTS The assessee was a publisher of books. The assessee's job was to get the manuscript for publication, hit upon a suitable format for the book, get it printed as per its requirements under its supervision, get the book bound after suitable changes and then put out the publication for sale. In all these activities, the assessee had to play an active role by co-ordinating its activities in a business like manner. The assessee claimed that it was a manufacturer or a processor of goods. The ITO did not deal with the assessee's claim. The assessee asked the ITO to rectify its order under section 154 and to consider whether the assessee as manufacturer or processor of goods was entitled to be taxed at a concessional rate. The ITO rejected the application. However, allowed the assessee's claim and directed the ITO to grant relief under section 154. The appeal filed by the revenue was dismissed by the Tribunal. On reference : HELD In order that a publisher of books should be a manufacturer of books it is wholly unnecessary for him either to be an owner of a printing press or to be a book-binder himself. A paper is not a book, though it is printed on papers. A publisher may get the books printed from any printer but the printer is not the manufacturer but a mere contractor. The findings of the Tribunal conclusively showed that the assessee was carrying on the activity of manufacturing and…

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