ORIENT LONGMAN LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under S. 256(1) of the INCOME TAX ACT, 1961. The assessee in this case is a public limited company and carries on business in the publications, purchase and sale of books. In the asst. yr. 1970 -71, for which the accounting period was from 1st May, 1968, to 30th Sept., 1969, the assessee claimed that it was an industrial company within the meaning of S. 2(6)(c) of the Finance Act, 1970, and was, therefore, entitled to be assessed at a concessional rate in accordance with the said Act. The ITO rejected this claim but on appeal the AAC accepted the contention. The Tribunal on further appeal by the Revenue rejected the assessee's claim and held that it was not an industrial company within the meaning of the Finance Act, 1970. As a result of this decision the assessee sought a reference and the question of law now referred to us is as follows:

(2.) IT was submitted before us that the question referred to us is covered by the decision of the Calcutta High Court reported as Addl. CIT vs. Mukherjee & Co. (P) Ltd. (1978) 113 ITR 718 (Cal) : TC24R.218. That was also a case of a publisher who was getting manuscripts for publication prepared by getting them printed and bound and sold in book form. No printing press was owned by the assessee but the printing and binding was done under the supervision of the assessee. It was held that the business of manufacture of books did not necessarily mean that the assessee had to own a printing press or to be a book -binder himself. It was sufficient if a publisher got a book printed and bound from a printer and book -binder and, in such a case, the particular printer would only be acting as a contractor and not as a manufacturer.

(3.) IT appears that the conclusion of the Calcutta High Court would apply to the present case. Although the assessee in this case, as a publisher, would not be doing more than getting the manuscript and preparing the same for printing and book binding, the fact that printing and book binding is done by someone else does not imply that someone else is the manufacturer. In fact, it is the business of the assessee to get the books manufactured by getting the manuscript, designing the nature of the book, finishing the anticipated product and then actually selling the product after getting it made. The definition of the words "industrial company" given in S. 2(6)(c) of the Finance Act, 1970, is as follows :