ORDER
R.M. Mehta, Accountant Member
1. These appeals pertain to the same assessee and are directed against the separate orders of the CIT (Appeals) but on an identical issue.
2. The assessment” years involved are 1979-80 to 1982-83 and the respondent is a company in which the public are not substantially interested. The ground which is common to all the years is as under:
The learned CIT(A) has erred in law and on facts in holding that the assessee is an Industrial Company entitled for concessional rate of tax.
3. The assessee-company in. the course of the proceedings for assessment year 1979-80 put in a claim before the ITO for being treated as an ‘Industrial company’. For this purpose it furnished a note to the ITO which detailed its activities as under :
(a) Production of design and art works ;
(b) Preparation of print material like calendars, posters, leaflets, booklets etc.;
(c) Production of Audio Visuals advertising films etc. for publicity through cinema ;
(d) Commercial production including publicity through radio and TV ; and
(e) Erection of hoardings for domestic work.
The assessee also furnished a copy of its Memorandum of Association which listed the main objects of the company. It also drew the ITO’s attention to the definition of an ‘Industrial company’ in Section 2(7)(c) of the Finance Act, 1979. The ITO’s attention was also invited to the decision of the Hon’ble Delhi High Court in the case of Orient Longman Ltd. v. CIT [1981] 130 ITR 477 in support of the company’s case to be treated as an ‘Industrial company’.
4. The ITO, however, rejected the claim of the assessee and in doing so referred to the meaning of the words ‘manufacturing’ and ‘processing’ vis-a-vis the activities of the assessee-company. The relevant observations of the ITO in this connection are as under :
In this behalf we have to examine the meaning of the word manufacturing and processing to arrive at the correct status of the assessee. ‘Manufacturing’ has been defined in the Permanent edition of ‘Words and Phrases’ Vol. 26 as follows :
Manufacture implies a change but every change is not a manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation ; a new and different article must emerge having a distinctive name, character or use.
This definition brings out the substance of this word as understood in industrial or commercial parlance. These elements are :
(a) involves change in the raw materials worked upon,
(b) the result of treatment and manipulation,
(c) but negatives that any change would be automatically to manufacturing and therefore,
(d) emphasis the creation of, or transformation into, a new article with a definite–
(i) name
(ii) character, and (in) usage.
By the test of this definition, if we apply the same upon in (a), (b), (c) and (d) above it becomes clear that it is primarily a service oriented company involving at times a niggardly element of transformation of raw material. It only creates the basic design in art form or print form and the same is supplied to clients, e.g., calendars, posters, booklets are all got printed from outsiders. This is also true of Radio/T.V. Films. These are got made in the studios taken on hire. The films, therefore, belong to the clients. So it would be seen that what was rendered was that expert services were provided to the clients relating to Art or Cinematic Art to satisfy the marketing needs of the Corporate and other sectors in particular. After preparation of the designs, it acts as the advertising agent of its numerous clients in a big way getting them published in the various media, particularly, newspapers, e.g. for Decon Marketing and other companies of the Sarabhai Group. It may involve preparation in the studios and it may result in the preparation of some art work but by no stretch of imagination, it can be brought into the purview of ‘manufacture’ leading to development of a new product with a distinct name, character and usage put together. It is therefore held that the assessee is purely a service company and cannot be regarded as an Industrial company. It may be added that the judgment quoted by the assessee’s aforementioned, is not applicable to the facts of this case wherein the assessee was a publisher of books.
Following his decision for asst. year 1979-80 the ITO rejected the assessee’s claim for the other three years as well.
5. Before the CIT (Appeals) detailed arguments were advanced on behalf of the assessee-company and these were followed up with a written note which has been reproduced by the CIT (Appeals) in his appellate order for asst. year 1979-80. This note in fact not only gives a detailed description of the activities of the company but also refers to the case law and the relevant Circulars of the Board on the point under consideration. According to the assessee it was engaged in various types of activities connected with the field of ‘advertisement’. It was also submitted that the ‘basic material’ as well as the ‘end product’ were manufactured or produced by the assessee from different types of raw materials such as papers, hard board, card board, straw board, printing ink, raw films and other basic materials. According to the assessee these basic materials were processed and the end product such as the final art work to be exhibited, printed or published through different media emerged. It was also submitted before the CIT(A) that some of these activities were being carried on by the assessee itself whereas the others were got done from outside parties. The sum total of all these activities according to the assessee constituted the manufacturing activities of the assessee.
6. The assessee in the course of the first appellate proceedings also furnished to the OIT(A) a copy of its Memorandum of Association which detailed the objects of the company. It also submitted the dictionary meaning of the words ‘manufacture’ and ‘processing’ as also a note regarding its system of billing. It also produced for the perusal of the CIT(A) various advertisement materials such as posters, folders, booklets and pamphlets prepared on behalf of the various clients. Reliance was also placed on the following authorities in the course of the hearing of the appeal before the GIT (Appeals) :
(1) CIT v. Ajay Printery (P.) Ltd. [1965] 58 ITR 811 (Guj.).
(2) CIT v. Commercial Laws of India (P.) Ltd. [1977] 107 ITR 822 (Mad.).
(3) Addl. CIT v. A. Mukherjes & Co. (P.) Ltd. [1978] 113 ITR 718 (Cal.).
(4) Orient Longman Ltd.’s case (supra).
(5) Addl. CIT v. Kalsi Tyre (P.) Ltd. [1981] 131 ITR 636 (Delhi).
The attention of the CIT(A) was also invited to various circulars of the Board in support of the assessee’s case.
7. The CIT(A) after considering the arguments advanced on behalf of the assessee, the nature of the activities carried on by the assessee-company, the Circulars of the Board, the dictionary meaning of the words ‘manufacture’ and ‘processing’ as also the authorities cited, disposed of the matter on the following lines :
As against the above submissions I find that the ITO has, in rejecting the claim of the assessee, has based his findings mainly on the interpretation of the term ‘manufacture’ as given in commentary in the book ‘Words and Phrases’ Vol. 26. He has also held that in view of the distinct name, character and usage in this regard the assessee-company does not satisfy the conditions for making the claim as an industrial company.
The above two views have been considered. I find that the factors, that are germane to the issue in question, are :
(i) nature of the business carried on by the assessee-company ;
(ii) the use of the term ‘industrial company’ for the purposes of the Income-tax Act.
As regards the first factor I find that the assessee-company does carry on an activity in the line of its business which gives out a prominent end product. In the line of the business of advertisement, which is highly competitive and paying, the advertiser has to come up with innovative ideas, catchy phrases, distinct designs and appealing audio-visual suggestions. Therefore, it cannot be held that the assessee-company carries on a business which does not result in an end product.
For the second factor the point to be examined is whether the end product comes within the meaning of the term ‘manufacture’ for the purposes of the application of Income-tax Act. I find that the words ‘industrial company’ have not been defined in Section 2 or specifically referred in the definition of the term ‘company’ given in Section 2(17). It is only in the Finance Act, wherein the rates of taxation are prescribed from year to year, that the definition of ‘Industrial company’ is given. This definition, especially that given in Section 7(c) of the Finance Act, 1979 (which is relevant to the case of the appellant), is analogous to the wordings used in Section 104(4). The Explanation given in both these provisions is also analogous to the Explanation given in Section 2(18)(b) of the IT Act. If for the purposes of application of Section 104 a clarification is issued by the authorised interpreting authority namely the OBDT, it would not be unwarranted to use the same for the purposes of appreciating the real import of the word ‘manufacture’ for utilising it for the application of other sections of the Act. I find that in Circular No. 347 dt. 7-7-1982 (as reproduced in 137 ITR 14 St) the CBDT has clarified that the book publishing companies even though themselves not be engaged in printing or binding of books qualified to be treated as industrial companies. Here in the case of the assessee material point is whether the business of publishing of books or printing of the same is less onerous than the creation of the end product in the modern day business of advertisement. The answer to this shall be in the affirmative. The provisions of Finance Act, 1979, in prescribing a lesser rate of tax, have been enacted to give due weight to any or specified types of business activities that may get concessional treatment. In the case of the assessee-company it would not fair to deny the benefit of this concession. I, therefore, allow this ground of appeal.
8. The learned DR in the course of his arguments strongly supported the orders of the ITO. According to him the assessee-company up to asst. year 1978-79 had been treated only as a “Service Company” and not as an “Industrial Company”. According to him even for A.Y. 1979-80 which was the first year involved in the present set of appeals, the assessee had not made any claim to be treated as an “Industrial Company” in the original return of income but had done so only in the revised return. It was further stated that the auditors of the company themselves had referred to the assessee as a “Service Company” in the audited accounts. According to the DR the CIT(A) had not appreciated fully the case made out by the ITO and had also relied on case law which was not strictly applicable to the facts of the case. He accordingly made an impassioned plea for the confirmation of the ITO’s action in preference to the decision taken by the CIT(A) on the issue under consideration.
9. The learned Counsel for the assessee, on the other hand, strongly supported the orders of the CIT(A). His arguments proceeded on lines identical to those as before the CIT(A). He, however, laid stress on some of the following points as well since these had been specifically raised by the DR. It was submitted that the failure to claim the correct status in the earlier years would not debar the assessee from doing so in the years under consideration. The note of the auditors according to the learned Counsel, would not once again prevent the assessee from making the correct claim in accordance with the provisions of law. He also invited our attention to the assessment orders in the company’s case for A.Ys. 1983-84 and 1984-85 to submit that since the claim on account of “Investment Allowance” had been allowed it would automatically follow that the assessee was an “Industrial Company”. For this proposition he relied on the decision of the ITAT in the case of A. Construction Co. (P.) Ltd. v. ITO [IT Appeal No. 1767 (Ahd.) of 1985, dated 7-8-1986]. The learned Counsel for the assessee also referred extensively to the paper book furnished by him and which included copies of the various documents furnished to the CIT(A) and which had been referred to by him in detail in his appellate order. It was finally submitted that the order of the CIT(A) be confirmed.
10. We have considered the rival submissions and have also perused the orders of the lower authorities. We have also examined the relevant portions of the paper book furnished by the assessee’s counsel and to which our attention was drawn during the course of the hearing. The case law cited at the Bar has also been duly considered by us.
11. At the outset we may mention that there is no bar to making a claim in a particular assessment year although no such claim has been made in the earlier years. The principles of res judicata would not apply. Although the assessee had been treated as a “Service Company” up to asst. year 1978-79 it claimed the status of an “Industrial Company” in asst. year 1979-80 when advised to do so. The maxim of “better late than never” would take care of the present situation. The submissions of the DR on this score are accordingly rejected.
12. In order to appreciate the controversy we would at the outset detail the nature of the activities carried on by the assessee-com- pany. According to the statement of facts furnished by the assessee before the CIT(A) as also the arguments advanced before us these are as under :
(i) Production of design and art works which serve as the basic material for publication of advertisements in Newspapers, periodicals, technical journals, souvenirs etc.
(ii) Preparation of print material link calendars, posters, leaflets booklets etc. including the clocks thereof.
(iii) Production of software for Audio Visuals, Advertising Films etc., for publicity through cinema theatres and other shows.
(iv) Commercial production of spots, jingles for publicity through radio and similar spots and advertising films for telecast on TV.
(v) Preparation of designs for fabrication and erection of hoardings for outdoor publicity.
(vi) Production of publicity texts including for the press, direct mail product literature etc.
13. According to the assessee the basic materials produced in respect of the aforesaid activities are ultimately utilised for the purposes of advertising through various media for the clients of the company since the main business of the company is in the field of “advertisement”. It is the assessee’s case that some part of the process/manufacture is undertaken by it whereas certain other processes are got done from outside parties. The sum total of these activities according to the assessee constitutes “manufacturing/processing”. The nature of the company’s business as detailed has not been challenged by the DR. The IAC in 144B proceedings although rejecting the assessee’s claim has observed as follows :
It only creates the basic design in Art form or print form and the same is supplied to clients, e.g. calendars, posters, booklets are all got printed from outsiders. This is also true of Radio/TV films. These are got made in the studios taken on hire. The films, thereafter, belong to the clients. So it would be seen that what was rendered was that expert services were provided to the clients relating to Art or Cinematic Art to satisfy the marketing needs of the Corporate and other sectors in particular. After preparation of the designs, it acts as the advertising agent of its numerous clients in a big way getting them published in the various media, particularly, newspapers, e.g. for Decon Marketing and other companies of the Sarabhai Graup. It may involve preparation in the stodios and it may result in the preparation of some art work.
14. We would at this stage advert to the Dictionary meaning of the words “manufacture” and “process”. This would be as under : —
“”
Dictionary Meaning
(i) Murrays New English To work up (material) into
Dictionary forms suitable for use.
(ii) Annandale's Concise English The operation of reducing raw
Dictionary materials into a form
suitable for use by more or less
complicated process.
(iii) Chamber's Twentieth To make from raw materials
Century Dictionary by any means into a form suit-
able for use.
(iv) Permanent edition of Words Manufacture implies a change
and Phrases Vol. 26 but every change is not a manu-
facture and yet every change of an
article is the result of treatment,
labour and manipulation. But
something more is necessary
and that must be transformation ;
a new and different article must
emerge having a distinctive name,
character or use.
"PROCESS"
(i) Webster's Third New To subject to a particular
International method, system or technique or
Dictionary preparation handling or other
treatment designed to effect a
particular result put through a
special process.
(ii) Oxford Dictionary A continuous and regular action
or succession of actions taking
place or carried on in a definite
manner and leading to the
accomplishment of some result.
15. The assessee in the course of the first appellate proceedings also furnished a detailed note to the CIT(A) relating to its system of Billing. This note is as under :
Jobs for making blocks for press advertising, printing work etc. are entrusted to suppliers, who carry out the jobs as per the designs created by the Company and specifications and under instructions and supervision of the Company. Proofs are approved by us before jobs are finally carried out by the said outside fabricator. They do not charge for materials and services separately. They are giving bills for gross charge and then they allow 15 per cent commission to the Company. (A specimen copy of bill received from Adorn Printers and Publishers is enclosed).
The Company is charging to its clients for gross cost and other charges as billed by the suppliers. In the case of jobs like Design and Art work done by the Company itself also it does not charge separately for cost of material and services.
Specimens of bills issued by the Company to its clients are enclosed.
Total of billing to clients during the year is Rs. 2,02,79,203. Statement of clientwise billing is enclosed.
16. During the course of the hearing the learned Counsel for the assessee placed on his paper book specimen copies of various bills at pages 27 to 39. A perusal of the same shows that whatever is stated in the note reproduced earlier appears to be correct. It lends credence to the assessee’s argument that a part of the work is got done from outsiders and these outsiders have no relationship with the company’s clients but are directly involved with the company itself. A perusal of the bills further shows that the parties from whom the company gets a part of the work done, raise a bill on the company but deducting their commission (the assessee’s) and charging sales tax. The company in turn issues the bill for the gross amount to the client. It also charges sales tax from the customer. We would only refer to two bills pertaining to M/s. Adoni Printers & Publishers appended at pages 27 and 28 of the paper book. M/s. Adoni Printers & Publishers have raised a bill dated 30th September, 1978 on the assessee-company for a sum of Rs. 6150.60 as under:
"For the Printing and Supply of: Rs.
3000 Folders of size app. 14" x 13" open, printed
infour colours from blocks duly folded, and
fitted with packet of size approx. 6" x7" on
Indian Art Card, as per your order 6,700.00
6,700.00
Less : 15% Agency Commission 1,005.00
5,695700
ST @ 5 P per Re. 284.75
GT @ 3% 3 P per Re. 170.85
6,150.60
The assessee has in turn raised a bill on its client M/s. Decom Marketing Ltd., Bombay on 2-11-1978 as follows :
To cost of printing and supplying 3,000 Rs.
copies of above folrfers "for you, printed in
four colours, duly folded and fixed with
packet of size approx. 6" X 7" on Indian
Art Card; per lot 6,700.00
ST & CST Charges by the printer 455.60
7,155.60
17. The other bills placed on the paper bill are also on identical lines and pertain to other activities of the company in the field of advertisement such as newspaper insertions which includes block making, as also the work pertaining to TV Advertisement such as preparation of Audio Tracks, as well as panel display and outside hoardings. There is also a statement at pages 40 and 41 of the paper book which gives the particulars of billing client wise in respect of asst. year 1979-80. The amount in question runs to a figure of Rs. 2,02,79,203 and includes not only big industrial groups but also Govt. undertakings. The entire material referred to by us in the immediately preceding paras was placed not only before the CIT (Appeals) but also before us in the form of a paper book. The learned DR has also not challenged any of the aforesaid facts pertaining to the activities of the company and the system of billing.
18. We also find on a perusal of the company’s balance sheet pertaining to A.Y. 1979-80 that it has its own assets such as Printing Machinery and Studio’s assets. These are reflected at a figure of Rs. 8,56,336. This would apparently mean that it is not a case where none of the activities were carried on by the assessee and everything was got done from outside. The existence of assets of this magnitude would mean that the most important aspect of the work i.e. “the making of the foundation” is being done by the assessee whereas the other subsidiary portions are being got done from outside. We do not find anything strange in this system of working since this would be a normal feature in the case of any industry where there has not only to be a division of labour but also a system of specialization, where particular jobs are done by a particular set of people. Even in the assessee’s case if it has to meet an order for making calendars then it has to prepare the basic designs, get it approved from the client, place orders for its printing with outside parties who are known to it and thereafter deliver the calendars to the clients. The outside party in turn may get the small items pertaining to the calendars prepared from somebody else. As far as the client is concerned calendars have been ordered from the assessee and these have been supplied by the assessee. The client is not aware of the persons who undertake various allied activities resulting in the making of a calendar. The same would be the system in respect of making Audio Visuals and Advertisement films for publicity through the Cinema Theatres etc. This would also be so for erection of hoardings for outside publicity. It is also the asses-see’s case that although a part of the work is got done from outside the same is subjected to strict control and supervision on the part of the assessee from time to time.
19. We are also of the view that the case law referred to by the learned Counsel during the course of the hearing supports the assessee’s case. The authorities cited before us were also relied upon in the course of the first appellate proceedings and have been duly considered by the CIT(A). For purposes of disposing of the present appeals we need refer to only two of these authorities since these have subsequently been accepted by the Board as well as suitable instructions issued to the assessing officers to follow them. The first decision would be that of the Hon’ble Gujarat High Court in the case of Ajay Printery (P.) Ltd. (supra). The issue before the Hon’ble High Court was whether the printing of balance sheets and dividend warrants amounted to “manufacture of goods”. The High Court was of the view that the end-product, namely, the balance sheet or the share certificate was an article quite different from the raw materials such as paper and ink from which it was made. It was held that the aforesaid activity amounted to “manufacture of goods”. The CBDT vide Circular P. No. 91/60/66-ITJ, dated 9-5-1967 issued the following instructions :
552. Lower rate for tax applicable to printing presses and newspapers as a result of the Gujarat High Court’s judgment – Clarification regarding.
The Gujarat High Court’s judgment in the case of CIT v. Ajay Printery (P.) Ltd. [1966] 58 ITR 811, which was pronounced in the context of Clause (ii) of Explanation 2 to Section 23A of the 1922 Act [section 109(iii) of the 1961 Act], applies equally in the matter of charging tax at a lower rate which is applicable in the case of companies having business in the ‘manufacturing or processing of goods’. In view of this decision, printing presses are entitled to the aforesaid lower rate of tax and the benefit will be available from the asst. year 1964-65 onwards. The assessments already completed may, accordingly, be rectified under Section 154 apply the lower rate of tax and refunds, if due, may be granted. The Board are also of the view that the ratio of the Gujarat High Court’s judgment in the case of Ajay Printery (P.) Ltd. (supra) is also applicable to the cases of newspapers, publishing concerns which print the newspapers in their own presses and that such assessees will also be eligible to be taxed at the lower rate applicable to industrial companies.
[Emphasis supplied by us]
20. The second decision is that of the Hon’ble Calcutta High Court in the case of A. Mukherjee & Co. (P.) Ltd. (supra). The assessee in that case was engaged in the publication of books. The manuscript for publication was obtained and got printed and found from outside. The assessee thereafter engaged itself in the business of selling. The assessee did not own any printing press but the printing and binding was got done from outside and was under its direct supervision. The High Court on the basis of the aforesaid facts held that the assessee was carrying1 on “manufacturing/processing” activity. It was further held that it was not necessary to be the owner of a printing press or to be a book binder in order to be classified as a manufacturer of books. The CBDT issued Circular No. 347 dt. 7th July, 1982 on the following lines :
The Board has received representation that companies engaged in publishing of books should be treated as industrial companies for the purpose of Section 104 of the IT Act, 1961. Reference has been made in this connection to the decisions of the Madras and Calcutta High Courts in the cases of CIT v. Commercial Laws of India (P.) Ltd. [1977] 107 ITR, 822 and Addl. CIT v. A. Mukherjee & Co: (P.) Ltd. [1978] 113ITR 718, respectively. In the Madras decision it has been held that folding and stitching the printed sheets and converting them into parts or books, as the case may be, constitute processing of goods. In the Calcutta decision it was held that it is wholly unnecessary for a publisher of books to be an owner of a printing press or to be himself a book binder to be a manufacturer of books. A publisher may get the books printed from any printer, but the printer is a mere contractor and the publisher carries on the business of manufacturing and processing of goods.
2. The Board has been advised to accept these decisions. In view thereof, book publishing companies even though they may themselves not be engaged in the printing or binding of books quality to he treated as industrial companies for the purpose of Section 104 as well as for the concessional tax treatment given to industrial companies.
[Emphasis supplied by us]
3. The contents of the circular may kindly be brought to the notice of all officers working under your charge.
In respect of its activities pertaining to preparation of advertisement shots the assessee has relied on the following circular issued by the CBDT :
Circular No. 24 P. No. 6/22/88-II (A-I) dt. 23-7-1969.
346. Production of films – Whether an activity in the nature of manufacture or processing of goods within the meaning of Section 104(4)(a).
7. The question whether production of cinematographic films, i.e., motion pictures would amount to “manufacture or processing of goods” within the meaning of Section 104(4)(a) has been considered by the Board. The Board are advised that a cinema film suitable for exhibition is entirely different from the raw unexposed film which is loaded into the camera in a studio.
2. It has, therefore, been decided by the Board that the production of cinematographic films would amount to the manufacture or processing of goods within the meaning of Section 104(4)(a).
21. According to us the aforesaid decisions as also the Circulars reproduced by us strongly support the assessee’s case for being treated as an “Industrial Company” for purposes of being subjected to tax at a concessional rate.
22. During the course of the hearing we also had an opportunity to examine the advertisement materials prepared by the assessee as was the position before the CIT(A). The samples produced for our perusal were also directed to be shown to the D.R. and this was done. He had no submissions to make after examining the samples, We have in fact made these samples as a part of our record.
23. The learned Counsel for the assessee in the course of the hearing invited our attention to the assessment orders for A.Ys. 1983-84 and 1984-85 for the submission that the assessee would automatically be treated as an “Industrial Company” since the claim for Investment Allowance had been accepted by the ITO for both the years. In support is the Tribunal’s decision already referred to by us earlier. We are however of the view that this aspect of the matter need not be dealt with by us in view of the fact that the assessee’s claim stands accepted on other grounds. Even otherwise we do not know whether the facts for A.Ys. 1983-84 and 1984-85 are identical to the facts for the years with which we are presently concerned.
24. In the final analysis, we uphold the orders of the CIT (Appeals) in respect of the common ground for all the years under consideration.
25. The only other remaining ground to be dealt with pertains to A.Y. 1981-82 and is as under :
The learned CIT(A) has erred in law and on facts in allowing the service charges of Rs. 12,886 in full though the same are covered by the provisions of Section 80VV.
26. The ITO in the course of the assessment proceedings disallowed a sum of Rs. 12,886 being the payment made to M/s. Business Executives Organisation Pvt. Ltd. According to the ITO since the payment had been made for obtaining services in connection with the legal, financial and income-tax matters, the same fell within the purview of Section 80VV of the Act.
27. The CIT(A), however, allowed the claim on the following lines :
The next ground of appeal is against the disallowance of service charges paid to Business Executive Organization Private Limited for Rs. 12,886. It is pointed out that similar payment made to B.E.O. in 1979-80 and in 1980-81 had been allowed by the ITO. Moreover, even for subsequent years i.e. 1982-83, the service charges have been fully allowed. For the present asst. year, I do not find any new ground or reasoning given by the ITO to make this disallowance. On the contrary, the ITO appears to have treated this payment for calculating disallowance under Section 80VV. The assessee has duly explained that these service charges are not paid for representations before the Income-tax Authorities, but have been incurred for the services rendered by the B.E.O. in the field of secretarial taxation, accounting and banking matters. In view of these facts, the entire payment to B.E.O. for Rs. 12,886 should be allowed.
28. At the outset the learned Counsel for the assessee invited our attention to the fact that no such disallowance had been effected in the earlier as also the subsequent years. According to him the ITO himself had allowed a payment of Rs. 34,662, Rs. 16,454, Rs. 19,072 and Rs. 13,590 in A.Ys. 1980-81, 1982-83, 1983-34 and 1984-85 respectively. It was submitted that the facts for all these years were identical to those as existing in A.Y. 1981-82 and there was no good ground for making any disallowance. The D.R., on the other hand, supported the action of the ITO in making the impugned disallowance.
29. We have examined the rival submissions and are of the view that no disallowance is called for in the absence of any distinguishing features in A.Y. 1981-82 vis-a-vis the other asst. years mentioned earlier in which the ITO himself allowed the claim. As rightly mentioned by the CIT(A) the payment to Business Executive Organisation is primarily for obtaining secretarial assistance in taxation, accounting and banking matters and not for representation before the Income-tax Authorities. According to us the payment in question would not be hit by Section 80VV. We accordingly confirm the order of the CIT(A) in allowing the claim.
30. In the result the appeals are dismissed.