9911796707
TMI Blog1978 (3) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... d was, therefore, not entitled to the concessional rates of tax under the respective Finance Acts ? " The assessee is a private limited company and is engaged in pharmaceutical business. The assessment years are 1965-66 and 1966-67 and the relevant accounting years are calendar years 1964 and 1965, respectively. In the assessment proceedings, the assessee was treated as a manufacturing concern and was taxed at concessional rates under the Finance Acts of 1965 and 1966, respectively. Thereafter, the Comptroller and Auditor-General of India raised certain objections in the audit report regarding the assessments. The ITO, after applying his mind to the said audit report, reasonably believed that the income had escaped assessments in both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he accounting year 1964. It was submitted on its behalf that by reading the aforesaid manufacturing agreement as a whole, it was clear that the overall control and management of the products manufactured by the said company was in the hands of the assessee and, accordingly, it, should be held that the assessee was a manufacturer of those goods in the accounting year 1964. Reliance was also placed on its behalf on certain licences and certificates issued by the Government departments to show that the assessee was the manufacturer of those goods. The Tribunal, however, held that the assessee was not a manufacturer of those goods as it did not own or possess any plant or machinery and caused those goods to be manufactured by the said company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attributable to any of the aforesaid activities included in its total income for the previous year is not less than fifty one per cent. of such total income ;... " The Supreme Court has held in Commr. of ST v. Dr. Sukh Deo [1969] 23 STC 385 (SC), that a manufacturer is a person by whom or under whose direction or control the goods are manufactured. In Addl. CIT v. A. Mukherjee & Co. (P.) Ltd. [1978] 113 ITR 718 (Cal), this court has held that a manufacturer need not possess any manufacturing plant or machinery. A manufacturer may hire a plant or machinery and employ hired labour and manufacture the goods. But to earn the benefit of the concessional rate of tax a company must mainly engage itself in the manufacture or processing of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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