Construction activity is not manufacture or production for industrial-company status under the Income-tax Act.

Construction of buildings does not amount to manufacture or production of an article or thing for industrial-company status under the Income-tax Act. Applying the Supreme Court's ruling in N.C. Budhiraja & Co., the Delhi High Court noted that a construction company does not become an industrial company merely because it carries on building activity. The earlier view in Minocha Bros. was also noted as having been affirmed on a different ground. The assessee was therefore not entitled to concessional taxation as an industrial company.

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Issues: Whether a company engaged in construction of buildings could be treated as an industrial company for the purpose of concessional taxation.

Analysis: The question was governed by the principle that construction of buildings does not amount to manufacture or production of an article or thing within the meaning of the relevant taxing provision. The decision of the Supreme Court in N.C. Budhiraja & Co. controlled the issue and made it clear that a construction company does not fall within the ambit of an industrial company merely because it carries on building activity. The earlier view in Minocha Bros. was also noted as having been affirmed on a different ground.

Conclusion: The assessee was not entitled to the status of an industrial company. The question was answered in favour of the Revenue and against the assessee.

Ratio Decidendi: Construction of buildings is not manufacture or production for the purpose of claiming industrial-company status under the Income-tax Act.

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