Industrial company status affirmed where contract work involved manufacture, processing and commissioning, not mere trading operations.

The Delhi HC considered whether the assessee qualified as an industrial company under clause 8(c) of Chapter 2 of the Finance Act, 1977. On the facts, the assessee's contracts involved supervision and commissioning of heaters, erection of gas generation plants and furnaces, manufacture of equipment for those purposes, and supply of technical know-how. The appellate authorities found that these activities substantially involved manufacture and/or processing of goods, producing commercially different articles, and were not mere trading operations. The assessee was therefore held to be an industrial company, and the issue was answered in its favour and against the Revenue.

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Issues: Whether the assessee was an industrial company within the meaning of clause 8(c) of Chapter 2 of the Finance Act, 1977.

Analysis: The assessee's activities consisted of supervision and commissioning of heaters, erection of gas generation plants and furnaces, manufacture of equipment for those purposes, and provision of technical know-how. The appellate authorities found, on the facts, that the contracts undertaken by the assessee substantially involved manufacture and/or processing of goods and resulted in commercially different articles, and that the activities could not be treated as mere trading operations.

Conclusion: The assessee was held to be an industrial company, and the question was answered in favour of the assessee and against the Revenue.

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