2009 (8) TMI 8 - HC - Income Tax

Charge of tax at low rate applicable to industrial company - assessee claimed itself to be an industrial company for claiming lesser rate of tax. The Assessing Officer rejected the said claim. The CIT(A) upheld the plea of the assessee - the assessee must itself be engaged in manufacturing activity of the nature specified in the definition and mere holding of shares of an industrial company, was not enough to declare an investment company to be an industrial company . Disposed off in favor of revenue.

Summary

The High Court of Punjab and Haryana, in the 2009 case of 2009 (8) TMI 8, addressed a question referred by the Income Tax Appellate Tribunal, Chandigarh regarding the tax rate applicable to an assessee claiming to be an industrial company for the assessment year 1985-86. The Tribunal upheld the assessee's claim based on the percentage of income from various sources, considering the investment in a manufacturing process. However, the Court, in reference to a previous case involving M/s Bhagyoday Investment (P) Limited, held that to be classified as an industrial company, the assessee must be directly involved in manufacturing activities specified in the definition, not just holding shares of an industrial company. The Court ruled in favor of the revenue, as the issue had already been addressed in the aforementioned case, thereby denying the assessee's claim to be treated as an industrial company for tax purposes.