JUDGMENT
1. At the instance of the Revenue, the Income-tax Appellate Tribunal referred the following question relating to the assessment year 1976-77 for the opinion of this court :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was an industrial company engaged in the manufacture and processing of brassware articles and was entitled to the benefits claimed by it in the matter of taxation ?"
2. The question for consideration before the Appellate Tribunal was whether the assessee, a private limited company, is an "industrial company" as defined by Section 8, Clause (c), of the Finance Act, 1975.
3. The facts, as found by the Appellate Tribunal, are that the assessee-company got manufactured various articles of brassware from artisans under its supervision and control. The assessee gave the pattern and design of the articles to be manufactured by the artisans and advanced money to them for purchasing the raw material, for example, brass, to manufacture those articles. The artisans made articles in different models. The articles in raw form are examined by the assessee and then directions are given to the artisans to modify and polish the same. The Assessing Officer rejected the claim of the assessee-company on the ground that it was not engaged in the manufacture of brass articles itself and an element of manufacture and processing of goods was absent in the case of the assessee.
4. On appeal, the Commissioner of Income-tax (Appeals) affirmed the order of the Assessing Officer.
5. On further appeal, the Appellate Tribunal found as follows :
". . . In our opinion, on the facts of this case, the assessee is entitled to be treated as an industrial company engaged in the manufacturing and processing of brassware articles. As already stated, on facts, there is no dispute that the idea and design of the article to be manufactured was supplied by the assessee-company itself. The artisans purchased the required metal and produced a rough piece in a mould prepared according to the design supplied by the assessee. The rough pieces were considered by the assessee-company's supervisory staff and necessary directions given to bring the article into the required shape before it was exported to foreign countries. The element of close supervisory control and direction is not disputed by the Department in this case. On these facts we are of the opinion that the assessee is entitled to be classified as an industrial company engaged in the manufacturing and processing of brassware articles."
6. Before us also, learned standing counsel reiterated that the assessee who claimed itself as an industrial company should do the manufacturing itself. There is a catena of decisions to the effect that a processor of goods need not himself carry out all the processes resulting in the end-product : he may get some of them done by a third party. A publisher may get books printed and bound through contractors. Similarly, a manufacturer need not himself own the manufacturing plant : he may take it on hire or may get the goods manufactured under his supervision, direction and control by an outsider. (See CIT v. Oricon P. Ltd. [1985] 151 ITR 296 (Bom) ; CIT (Addl) v. A. Mukherjee and Co. (P.) Ltd. [1978] 113 ITR 718 (Cal) and Griffon Laboratories (P.) Ltd. v. CIT [1979] 119 ITR 145 (Cal)). These authorities with which we agree, give a fair guideline that if articles are got manufactured from the artisans but under the close supervision and control of the assessee, then the assessee can be classified as an industrial company. The Tribunal clearly recorded a finding of fact that the element of close supervisory control and direction over the artisans is not disputed by the Department in this case. It, therefore, follows that the assessee gets the different brassware articles manufactured from the artisans, but under its own close supervision and control. The design, shape and pattern are suggested by the assessee and conforming to them the articles are manufactured by the artisans. The artisans are not free to manufacture any item of their own in any shape or pattern they like, but they are guided by the assessee itself as to of which pattern and design they are required to manufacture the brass-ware articles. Applying the test of close supervision and control, we are of the view that the Appellate Tribunal was right in holding that the assessee can be classified as an industrial company.
7. We, therefore, answer the aforementioned question in the affirmative, that is, against the Revenue and in favour of the assessee.