Meaning of “Books”

Case Name : CIT vs. Elecon engg. Co. Ltd. 

Citation : [1974] 96 ITR 672 (guj.)

Court : Gujarat high court

Section : 43(3)

Meaning : The word ‘book’ has not been defined in the act and it is not a term of art. It is an ordinary english word of every day use and it must, therefore, be assigned its natural meaning as understood in common parlance subject, of course, to the context in which it is used here. In popular sense, book means a collection of a number of leaves of sheets of paper or of other substance, blank, written or printed, of any size, shape and value, held together along one of the edges so as to form a material whole and protected on the front and back with a cover of more or less durable material. That this is how the word ‘book’ is understood in ordinary usage is evident from the third meaning of the word given in the shorter oxford english dictionary, third edition, page 202 :

“gen. A collection of sheets of paper or other substances, blank, written or printed, fastened together so as to form a material whole; esp. Such a collection fastened together at the back, and protected by covers; also, a literary composition long enough to make one volume, as dist. From a tract pamphlet, essay, etc.”

In this rather wide sense not only a literary or scientific book, book of art, law book, religious book, text book, dictionary and so on but also an account book, minute book, cheque book, pocket diary, note-book and a hundred other varieties of subjects satisfying the above description would be books. For the purpose of ascertaining the true meaning of the word ‘books’ in section 43(3) in which it occurs in conjunction with the expression ‘used for the purposes of the business or profession’, however, one must have regard not only to the physical but also to the functional characteristics of a ‘book’. A book within the meaning of section 43(3) must in addition to conforming to its physical form denoted by the above definition, be functionally useful for the purposes of the assessee’s business or profession. It must be a tool of his trade—an article which is a part of the apparatus with which his business or profession is carried on. It must have the utility value enabling its owner to pursue his business or profession with greater advantage. In the ultimate analysis, therefore, it would appear that a book within the meaning of section 43(3) must be an object or article which must satisfy a dual test : it must bear both physical and functional characteristics of a book. It must be a collection of number of sheets of paper or of other substance, having suitable size, shape and value, bound, together at one edge so as to form a material whole and protected on the front and back with covers of some kind and functionally useful to the assessee for carrying on his business or profession.

Case Name : Catalysts & chemicals india (west asia) ltd. Vs. CIT

Citation : [1982] 137 ITR 110 (ker.)

Court : Kerala high court

Section : 43(3)

Meaning : Books would fall within the definition of ‘plant’, provided they satisfy the qualification that they are ‘tools’ of the business or profession. The chambers twentieth century dictionary defines ‘books’ as a collection of sheets of paper, etc., Bound together or made into a roll either printed, written on or blank. So in the larger sense, sheets of paper written or unwritten brought together in a form would be a book, but in the definition of ‘plant’ books are referred to in a more restricted sense, restricted by an indication of the functional use of the books. Therefore, it is not every book such as a diary or a cheque book that would satisfy the definition of book. In the larger sense, those could be said to be books but in the sense in which the term is used in the income-tax act it must be one ‘used for the purposes of the business or profession’. In the case of lawyer, books relating to law and allied subjects would fall within the definition. In the case of a medical practitioner, books relating to medicines and allied subjects would similarly fall within the definition of ‘books’. Thus, the definition must satisfy a dual test, that it should be a book in form as well functionally.

Case Name : Smt. Shanta devi Vs. CIT

Citation : [1988] 37 taxman 104/171 ITR 532 (punj. & Har.)

Court : Punjab & hariyana high court

Section :68 & 69a

Meaning : A perusal of section 68 would show that in relation to the expression ‘books’, the emphasis is on the word ‘assessee’. In other words, such books have to be the books of the assessee himself and not of any other assessee.