Circular No. 24

728. Whether production of motion pictures amounts to manufacture or processing of goods within the meaning of section 101(4)(a)

What this is

Circular No. 24 was issued by the Central Board of Direct Taxes on 23 July 1969. Its subject is 728. Whether production of motion pictures amounts to manufacture or processing of goods within the meaning of section 101(4)(a).

What it does

Holds that making films is manufacturing. On the question whether the production of cinematograph films, that is motion pictures, is 'manufacture or processing of goods' for section 104(4)(a), the Board accepts the advice that a cinema film fit for exhibition is an entirely different thing from the raw unexposed film loaded into the camera in the studio, and decides that film production does amount to the manufacture or processing of goods within that provision.

Why it was issued

The question had been put to the Board and it took advice on whether the transformation of raw film into an exhibitable picture is manufacture or processing.

Who it reaches

Film producing companies
Assessing Officers applying the additional tax provisions on undistributed profits to such companies
Companies whose status turns on being engaged in manufacture or processing of goods

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.101	s.183
s.104	no counterpart recorded

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

728. Whether production of motion pictures amounts to manufacture or processing of goods within the meaning of section 101(4)(a)
1. 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 cinematograph films would amount to the manufacture or processing of goods within the meaning of section 104(4)(a ).
Circular: No. 24 [F. No. 6/22/68-IT(A-I)], dated 23-7-1969.

What to watch

The reasoning is the difference between the raw unexposed film and the finished exhibitable film; that is what carries the conclusion, and it does not by itself extend to every activity in the trade.
The clarification is given for the provision cited in the body of the circular; the heading in the text before you cites a different section number from the body, so check the provision you are applying.
The circular decides the character of the activity and nothing about the quantum of any relief.

Where you meet it

In an old assessment of a film producing company where its status as a company engaged in manufacture or processing of goods is in issue.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 54/2026 [F. No. 370142/15/2026-TPL] / G.S.R. 240(E) — Ministry of Finance 31 March 2026
Notification No. 49/2016 [F. No. 370142/10/2016-TPL] / SO 2179()E — [To BE Published in the Gazette of INDIA, Extraordinary, Part II, section 3, Sub-section (ii)] 22 June 2016
Press Release, dated 28-6-2012 — Draft guidelines regarding implementation of General Anti Avoidance Rules (GAAR) in terms of section 101 of the Income T 28 June 2012
Notification No. 166 — A notification under section 97 of the Income-tax Act, 1961 22 June 2005
Circular No. 347 — 727. Book publishing company - Whether qualifies to be treated as company engaged in manufacture or processing of goods 7 July 1982
Notification No. 3210 — An exemption granted under section 104 of the Income-tax Act, 1961 8 August 1969

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A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.