2006 (2) TMI 143

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....aged in the business of developing photographs snapped in film rolls and printing them. The Assessing Officer rejected the assessee's claim for deduction under section 80-I of the Act. However, on appeal, the Commissioner of Income-tax (Appeals) set aside the order of the Assessing Officer, which, on appeal before the Income-tax Appellate Tribunal at the instance of the Revenue, was confirmed. Aggrieved by the said order, the Revenue has preferred the above appeal, raising the following substantial question of law: "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that processing of the film and printing photographs from the negatives amounts to a manufacturing activity and is an industrial undert....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Andhra Pradesh High Court in CIT v. Prasad Film Laboratories P. Ltd. [1997] 225 ITR 348 has held as follows: "that by the process carried out by the assessee, the raw film without images and sound were converted into films with images and sounds, which was a new and distinct commodity well known in the trade as, positive prints quite different from raw film. Therefore, the process of obtaining positive prints would be manufacture." "That the production of a negative by exposing the raw film and recording the pictures and sound track thereon would amount to production of a cinematograph film. That process should also include developing the exposed film to have the negative or the master film. But when positive prints are made from the....