TMI Blog2004 (4) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... al company within the meaning of section 2(8)(c) – However, Tribunal was not justified in holding that the printing, publication and distribution of pharmaceutical concerns does amount to publicizing the products and promote the sales - Tribunal was not right in holding that the AO rightly considered the expenditure incurred on account of printing of literature and disallowed the same u/s 37(3A) - - - - - Dated:- 26-4-2004 - Judge(s) : M. H. S. ANSARI., SOUMITRA PAL. JUDGMENT M.H.S. Ansari J. - This is a reference under section 256(1) of the Income-tax Act, 1961, at the instance of the assessee. The following questions have been referred by the Income-tax Appellate Tribunal ("the ITAT") for adjudication by this court: "1. Whether, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax (Appeals), for deletion of Rs. 5,56,464 being the expenditure incurred for the purpose of printing and distributing pamphlets and literature relating to the different products in pharmaceutical lines as an essential element of its business of manufacture and distribution of pharmaceutical products? 6. Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that the Assessing Officer rightly considered the expenditure incurred on account of printing of literature and disallowed the same under section 37(3A) of the Income-tax Act, 1961? 7. Whether the findings and/or conclusions of the Tribunal to reverse the findings and conclusions of the Commissioner of Income-tax (Appeals) are supported by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se and, therefore, reversed the order of the Commissioner of Income-tax (Appeals) and restored that of the Assessing Officer. Mr. A.K. Roy Chowdhury assisted by Smt. Sutapa Roy Chowdhury, learned counsel for the appellants, contended that the conclusion arrived at by the Tribunal is erroneous. Reliance was placed upon the judgment of the Madhya Pradesh High Court in CWT v. Smt. Premlatabai [1982] 137 ITR 329 wherein the judgment of this court in A. Mukherjee's case [1978] 113 ITR 718 was relied upon. In the aforesaid judgment in A. Mukherjee's case [1978] 113 ITR 718 (Cal), the court held that in order that a publisher of books should be a manufacturer of books it is wholly unnecessary for him either to be an owner of a printing press ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer may hire a plant or machinery and employ hired labour and manufacture the goods including hiring of a contractor to manufacture the goods. A manufacturer need not possess any manufacturing plant or machinery. But to earn the benefit of the concessional rate of tax as an industrial company it must engage itself in the manufacture or processing of goods either personally or by someone under its supervisory control or direction. In the case on hand, as noticed supra, the Tribunal based on the evidence on record held that the assessee was not engaged in the manufacture of pharmaceutical products. No material was placed before the authorities to show that the manufacturer (M/s. M and H Ltd.) was a mere contractor. The only document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous medical professionals like doctors and wholesale pharmaceutical concerns and therefore the same would not be hit by the provisions of sub-section (3A) of section 37 and reliance for that purpose is placed upon the judgment of this High Court in Griffen Laboratories Ltd. v. CIT [2000] 244 ITR 68. In the aforesaid judgment the Division Bench in Griffen Laboratories' case [2000] 244 ITR 68 (Cal) noticed the judgment in CIT v. The Statesman Ltd. [1992] 198 ITR 582 (Cal) wherein the legislative history of sub-sections (3A) and (3B) of section 37 of the Act was considered as also the Central Board of Direct Taxes circular. The Division Bench in Griffen Laboratories' case [2000] 244 ITR 68 (Cal) thereupon held as follows: "In view of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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