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TMI Blog2017 (2) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... s reply and contended that it was eligible for claiming deduction under section 80IC of the Act. The learned Commissioner of Income Tax, however, was of the view that the assessee was engaged only in printing and which cannot be called as manufacturing process. The learned Commissioner of Income Tax, accordingly held the order of the Assessing Officer as erroneous in so far as it was prejudicial to the interest of the Revenue. The assessment order passed by the Assessing Officer was cancelled, and accordingly he was directed to frame a fresh. 2.1 Aggrieved by the order of the learned Commissioner of Income Tax, the assessee is in appeal before the Tribunal raising following grounds: i. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (CIT) under Section 263 of the Act is bad, both in the eye of law and on facts. ii. On the facts and circumstances of the case, the order passed by the learned CIT cancelling the assessment order passed by the A.O. is untenable in the absence of order of the A.O. being erroneous as well as prejudicial to the interest of the Revenue. iii. On the facts and circumstances of the case, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arried out by the assessee has been accepted as manufacturing. He further submitted that the Central Board of Direct Taxes (CBDT), vide its circular No. 15/2016 dated 19/05/2016 has notified the process of printing and publishing amounts to manufacture or production of article or things relying on the judgment of the Hon'ble Delhi High Court in the case of Delhi Press Patra Prakashan Ltd. (2013) 355 ITR 14 (Del). Accordingly, he prayed that in view of the decision of the Tribunal in assessee's own case as well as the circular issued by the CBDT in this regard, the order passed by the learned Commissioner of Income Tax under section 263 might be held invalid. 4. The Ld. CIT(DR) ,on the other hand, supported the order passed by the learned CIT and submitted that in view of detailed discussion in the impugned order as the process carried out by the assessee was not amounted to Manufacturing, the order of the Ld. CIT might be upheld. 5. We have heard the rival submissions and perused the relevant material on record. The learned Commissioner of Income Tax has held the order erroneous by observing that the process of printing was not in the category of Manufacturing as required under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the assessee is carrying on can be called within the meaning of manufacture of an article or thing. 16. This issue has come up before the Hon'ble jurisdictional Delhi High Court in the case of CIT vs. Delhi Press PatraPrakashan Ltd. (Supra). In this case an issue has arisen whether the assessee is eligible to claim exemption under section 80-1 of the Income Tax Act. The assessee's two units were engaged in printing. The raw materials used were paper, ink and other consumables. 17. The Hon'ble jurisdictional High Court rejected the contention of the Revenue and held as under:- "52. In the present case, Unit Nos. 2 & 3 are engaged in printing. The raw materials used are paper, ink and other consumables which are completely distinct from the printed paper that results from the activity on in Unit Nos. 2 &3. We are unable to accept the contention that the printing does not alter the character of the paper used and there is no distinction between the raw paper and the resultant product. The purpose and usage of a blank paper is completely different from the use and purpose of a printed magazine or periodical. Once the blank paper undergoes a process of printing, the character ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for sale of any article; being premises in which, or within the close or curtilage or precincts of which, the work is earned on by way of trade or for purposes of gain and to or over which the employer of the persons employed therein has the right of access or control". 55. The Shorter Oxford English Dictionary defines 'article' to mean "A particular material thing (of a specified class); a commodity; a piece of goods or property". The meaning of the word "thing" is wider and the meanings ascribed to the word "thing" by the shorter Oxford English Dictionary includes "an inanimate material object", "a material substance", 'That which one possesses: property, wealth". 56. It is apparent that the expression "article or thing" is extremely wide. The question thus arises is whether the printed paper which is produced in Unit Nos. 2 & 3 falls within the sweep of the expression 'article' or 'thing'. We are unable to think of any reason to exclude the printed paper produced by the assessee in Unit Nos.2 & 3 from the ambit of the expression 'article' or 'thing'. The language of Section 80-1 (2)(iii) of the Act, thus clearly, indicates that Unit Nos.2 & 3 do "manufacture or produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle or thing" and whether the same is marketable as new product is not relevant. The Supreme Court has also held in the case of N. C. Budharaja & Co. (supra) that by products, intermediate products and residual products that emerge in the case of manufacture are also to be included in the word 'production' or 'produce'. Thus, even if the printed material as produced by Unit Nos. 2 & 3 is taken as an intermediate product which requires to be further bound for making it marketable, the word produce occurring in Section 80- l(2)(iii) of the Act would include it within its ambit. 58. The decision of the Supreme Court in the case of N. C. Budharaja& Co. (supra) and Sesa Goa Limited (supra) have been followed by the Supreme Court in the later decision of India Cine Agencies v. Commissioner of Income Tax: (2009) 308 ITR 98. In this case the Supreme Court accepted that the meaning of the word "production" or "produce" was wide enough to include conversion of jumbo rolls of photographic films into small flats and rolls in the desired sizes and held that the benefits of section 80-1 of the Act would be available in respect of an industrial undertaking engaged in such activity. 59. We, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the result, assessment order dated 30.12.2010 passed by the AO is restored and grounds of the appeal of the assessee are allowed." 8. Since the process carried out by the assessee of slitting the Rolls and printing thereon has been held by the Tribunal to be a manufacturing process in the case of assessee itself, therefore, the assessee is eligible for the deduction under section 80IC of the Act and in such circumstances allowing deduction by the Assessing Officer cannot be said as erroneous. Since the facts and circumstances of the case in the year under consideration are identical to the facts in assessment year 2008-09, respectfully following the above decision of the Tribunal, we are of the opinion that that the assessment order passed by the Assessing Officer under section 143(3) of the Act cannot be said to be erroneous so as to be prejudicial to the interest of the Revenue. We accordingly hold the order passed by the learned Commissioner of Income Tax as an invalid order and the same is quashed. Accordingly, the assessment order dated 25/08/2011 passed by the Assessing Officer is restored and the grounds of appeal of the assessee are allowed. 9. In the result, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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