Book publishing--Whether industrial companies - Income Tax - 347/1982

Book publishing--Whether industrial companies Circular No. 347 Dated 7/7/1982 To All Commissioners of Income-tax. Sir, Subject : Book publishing--Whether industrial companies. The Board has received representations that companies engaged in publishing of books should be treated as industrial companies for the purpose of section 104 of the Income-tax Act, 1961. Reference has been made in this connection to the decisions of the Madras and Calcutta High Courts in the cases of CIT, Madras v. Commercial Laws of India Pvt. Ltd. [1977] 107 ITR 822, and Addl. CIT, West Bengal--II v. A. Mukherjee Co. (P.) Ltd. [1978] 113 ITR 718, respectively. In the Madras decision it has been held that folding and stitching the printed sheets and converting them into parts or books, as the case may be, constituted processing of goods. In the Calcutta decision it was held that it is wholly unnecessary for a publisher of books to be an owner of a printing press or to be himself a book binder to be a manufacturer of books. A publisher may get the books printed from any printer, but the printer is a mere contractor and the publisher carries on the business of manufacturing and processing of goods. 2. The Board has been advised to accept these decisions. In view thereof, book publishing companies even though they may themselves not be engaged in the printing or binding of books qualify to be treated as industrial companies for the purpose of section 104 as well as for the concessional tax treatment given to industrial companies. 3. The contents of the circular may kindly be brought to the notice of all officers working under your charge. Yours faithfully, (Sd.) V.B. Srinivasan, Secretary, Central Board of Direct Taxes.