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Issues involved: Interpretation of whether the assessee is an industrial company u/s 2(6)(c) of the Finance Act, 1970 for claiming concessional rate of assessment.
Judgment Summary: The High Court of Delhi, in a reference u/s 256(1) of the I.T. Act, 1961, considered the case of a public limited company engaged in the publication, purchase, and sale of books for the assessment year 1970-71. The assessee claimed to be an industrial company under s. 2(6)(c) of the Finance Act, 1970, for concessional assessment. The Income Tax Officer (ITO) rejected the claim, but the Appellate Authority accepted it. However, the Tribunal, on further appeal by the revenue, ruled against the assessee, stating it was not an industrial company as per the Finance Act, 1970. The question referred to the court was whether the Tribunal was justified in this decision. The court referred to a similar case decided by the Calcutta High Court, where it was held that owning a printing press or being a book-binder was not necessary for a publisher engaged in the business of book publication. In the present case, although the assessee owned a printing press, the quantum of printing done was less than 51% of the business. The court agreed that the assessee, as a publisher, was involved in preparing manuscripts for printing and book binding, which constituted manufacturing or processing of goods. The definition of an "industrial company" u/s 2(6)(c) of the Finance Act, 1970, includes companies engaged in the manufacture or processing of goods. Books, as goods, undergo manufacturing or processing from manuscript to finished product. The court concluded that the assessee, by engaging in the business of manufacturing or processing books, qualified as an industrial company. The question was answered in favor of the assessee, citing precedent and departmental acceptance in similar cases, with each party bearing their own costs.
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