Industrial company status requires main engagement in specified activities; construction of factory buildings was insufficient for concessional tax.

A company qualifies as an industrial company only if it is mainly engaged in a statutorily specified industrial activity, and the explanation applies only where income from such activity is at least 51% of total income. The assessee's work consisted of constructing factory buildings, which did not amount to generation or distribution of electricity, ship construction, manufacture or processing of goods, or mining. The burden to prove industrial company status lay on the assessee, and no material was produced to displace the findings of the lower authorities and the Tribunal. The assessee was therefore not entitled to the concessional tax rate under the Finance Act, 1978.

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Issues: Whether the assessee was an industrial company for the purpose of the concessional rate of tax under the Finance Act, 1978.

Analysis: The assessee's work consisted of construction of factory buildings and not of generation or distribution of electricity, construction of ships, manufacture or processing of goods, or mining. The definition of industrial company requires that the company be mainly engaged in one of the specified activities, and the explanation deems such engagement only where the income from those activities is at least 51 per cent of total income. The burden to establish that status lay on the assessee, and no material was shown to displace the factual findings of the lower authorities and the Tribunal.

Conclusion: The assessee was not an industrial company and was not entitled to the lower rate of tax.

Final Conclusion: The reference was answered against the assessee on the sole substantive issue, and the Tribunal's order was confirmed.

Ratio Decidendi: A company is an industrial company only if it is mainly engaged in one of the statutorily specified industrial activities, and the assessee bears the burden of proving that it satisfies the statutory test.

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