Meaning of industrial company under Explanation to section2(7)(d) - Income Tax - 103/1973

Circular No. 103 Dated 17/2/1973 FINANCE ACT, 1966 - SECTION 2(7)(d) - INDUSTRIAL COMPANY Meaning of industrial company under Explanation to section2(7)(d) 1. Under sub-section (7)(d) of section 2 of the Finance Act, 1966, an "industrial company" means a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining. According to the Explanation to clause (d) of sub-section (7) of section 2, a company shall be deemed to be mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining, if the income attributable to any of the aforesaid activities included in its total income for the previous year is not less than fifty-one per cent of such total income. 2. The question as to the exact meaning of the Explanation to sub-section (7)(d) of section 2, came up for the consideration and the Board are advised that an "industrial company" would mean- (a) a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining, even if its income from such activities is less than 51 per cent of its total income; and (b) a company which, even though not mainly so engaged, derives in any year 51 per cent or more of its total income from such activities. Circular : No. 103 [F. No. 166/1/73-IT(A-I)], dated 17-2-1973.