1983 (12) TMI 87

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...., respectively. 3. to 8. (These paras are not reproduced here as they involve minor issues]. 9. In the next ground, the revenue objects to the order of the Commissioner (Appeals) directing the ITO to allow investment allowance by holding that the assessee is a manufacturing company. The ITO had negatived this claim for such investment allowance in both the years for the reason that the assessee-company was not engaged in the production of any article but that it only earned income by photocopying of documents, which could not be considered as a manufacturing activity. In this connection, the ITO relied on the auditor's report, wherein (in para 10) it was stated that the company was not a manufacturing company. 10. Before the Commis....

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....at the work done by the assessee was in the nature of Xerox printing and rotary copying and that the process involved in the photocopying of documents by the assessee required the following types of machinery and as well as the use of the following materials : Type of machinery used : (1) Rank Xerox : For taking out Masters for printing. (2) Transfer Printing : Masters are put to these machines Machines which take out copies from 1 to 5,000 or more. (3) Auto Copies Cannon : Which takes out copies 1 to 20 in few seconds. (4) I.B.M. Typewriter : For typing like printed letters and then copying. Materials used : (1) Toner, (2) Developer, (3) Masters, (4) Ratafix and Rotafound Solutions, (5) Ink, (6) Papers, (7) Folders,....

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....ion section of 'Industrial company' in the Finance Act, 1966, in section 2(7)(d). The definition requires a company to manufacture or process goods---an expression in substance the same as manufacture or production of article or thing in section 32A of the 1961 Act. So, whatever may be the nature of the article or thing, it must be meant for sale. It should be a mercantile commodity. It should be purchased and sold in the market. 15. Now, can we say that the Xerox copies made out by the assessee for the customer is a mercantile commodity in this sense ? No, definitely not. 16. The activity carried on by the assessee is that of rendering services to its clients in taking out the necessary copies required by them by employing the proces....