1. This is a reference under s. 256(1) of the I. T. Act, 1961. The assessed in this case is a public limited company and carries on business in the publication, purchase and sale of books. In the assessment year 1970-71, for which the accounting period was from May 1, 1968, to September 30, 1969, the assessed claimed that it was an industrial company within the meaning of s. 2 (6) (c) of the Finance Act, 1970, and was, thereforee, 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 assessed'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 assessed sought a reference and the question of law now referred to us is as follows :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessed is not an industrial company within the meaning of section 2(6) (c) of the Finance Act, 1970 ?'
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 v. A. Mukherjee and Co. (P.) Ltd. : 113ITR718(Cal) . 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 assessed but the printing and binding was done under the supervision of the assessed. It was held that the business of manufacture of books did not necessarily mean that the assessed had to own a printing press or 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. In the present case, the assessed does own a printing press but the quantum of printing in that press has been found to be less than 51% of the business. This has led the Tribunal to come to the conclusion that merely because the manuscript is received from the author and touched up here and there and then handed over to the printer, it would not mean that the assessed had converted the manuscript into something else.
4. It appears that the conclusion of the Calcutta High Court would apply to the present case. Although the assessed 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 assessed 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 :
''Industrial company' means a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining...'
5. The only words which apply to the present case are the 'manufacture or processing of goods'. Books in the manufactured state which are sold to customers are goods, and their manufacture or processing is, as in the case of other goods, the conversion of paper and the manuscript written by an author into a book. This certainly involves either manufacture or processing, and there is no doubt that the assessed was engaged in the business of manufacturing or processing books. thereforee, the assessed is an industrial company. We would, thereforee, answer the question as framed in the negative and in favor of the assessed and against the department. As the matter is covered by authority and has also been accepted by the department in other cases, we leave the parties to bear their own costs.