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Issues involved: Determination of whether the assessee-company is carrying on the business of manufacturing or processing goods and liable to pay income tax as an industrial undertaking at a specific rate.
Summary: The High Court of Madras addressed a case where the Income-tax Appellate Tribunal had to decide if an assessee-company, engaged in printing a journal, qualified as an industrial company for income tax purposes. The Tribunal had to ascertain if the company's activities constituted manufacturing or processing of goods, which would impact the applicable tax rate. The Tribunal initially framed a question regarding the company's status as an industrial company, but it was later revised to include both manufacturing and processing activities. The Tribunal's findings revealed that while the company outsourced printing, it undertook folding and stitching of printed sheets to create the final product for distribution to subscribers. The Court determined that these activities fell within the scope of "processing of goods" as defined in the Finance Act, 1968. As a result, the Court ruled in favor of the assessee, allowing them to benefit from the lower tax rate applicable to industrial companies.
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