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TMI Blog1990 (8) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. The assessee moved an application dt.22nd Feb., 1985under s. 154 wherein it was, inter alia, contended that the assessee was an industrial company and its income was less than Rs. 2 lakhs. As such, tax has to be calculated at 55 per cent as against @ 65 per cent applied in its case. This application was disposed of by the ITO vide his order dt.12th Sept., 1985passed under s. 154. The ITO held that the assessee's main source of income was from non-manufacturing and that the Board's instructions on the point were not applicable in this case. The application made by the assessee under s. 154 accordingly was rejected. 3. The assessee appealed to the CIT(A) before whom it was submitted that the assessee was mainly engaged in manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee's application under s. 154. On the basis of its finding that the assessee was an industrial company mainly engaged in the manufacture of PVC shoes, chappals, etc., the CIT(A) held that the ITO was not justified in rejecting the assessee's application under s. 154. The ITO was accordingly directed to calculate and charge tax at 55 per cent. Aggrieved, the Revenue has come up in appeal before the Tribunal. 5. The learned Departmental Representative submitted before us that details of sales, gross profit, interest and rent received by the assessee in various years including the assessment year under consideration clearly show that in the preceding three assessment years income of the assessee from manufacturing activity was mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny 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 building, manufacture or processing of goods or in mining, if the income attributable to any one or more of the aforesaid activities included in its total income of the previous year (as computed before making any deduction under Chapter VI-A of the IT Act) is not less than 51 per cent of such total income." 8. According to the Board's Circular No. 103, dt.17th Feb., 1973an 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 manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities, derives in any year 51 per cent or more of its total income from such activities, would be an industrial company. It is, therefore, not correct to say that it is only when income derived by a company from one or more activities enumerated in cl. (c) of s. 2(7) of the Finance Act, 1982, is not less than 51 per cent of its total income that it can be treated as an industrial company for the purpose of applying the concessional rate of tax at 55 per cent. Explanation to cl. (c) applies only to cases where a company, in fact, is not mainly engaged in one of the activities enumerated in cl. (c) but by legal fiction it is deemed to be mainly engaged in one or more such activities provided its income from such activities is not less than 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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