Regarding industrial company is entitled to a concessional rate of tax 'Industrial company' - Income Tax - 639/CBDT

INSTRUCTION NO. 639/CBDT Dated : December 28, 1973 Section(s) Referred: 2(6)(d) Statute: Income - Tax Act, 1961 Attention is invited to para F of the 1st Schedule to the Finance Act, 1968 under which an industrial company is entitled to a concessional rate of tax 'Industrial company' has been defined in section 2(6)(d) of Chapter II of the Finance Act, 1968 to mean a company which is mainly engaged in the business of generation of electricity or any other form of power or in the construction of ships or in the manufacture of process of goods or in mining. The words mainly engaged in the business of generation of ships or in the manufacture or goods or in mining has been defined in the Explanation to this Section to mean that the income attributable to any one or more of the specified activities included in the total income of the company before making any deduction under Chapter VIA of the I.T.Act should not be less than 51% of the total income. Revenue Audit has pointed out an instance where a company has the income from manufacturing activities was determined having regard to its total income computed after making the deductions under Chapter VIA. The Board have accepted the Revenue Audit Objection. The Board desire that the correct position as given above should be brought to the notice of all the assessing officers working in each charge for information and guidance.