Hotel business not treated as an industrial company, so the lower tax rate and reference request failed.

A hotel-running company was held not to qualify as an "industrial company" under section 2(7)(c) of the Finance Act, 1979, so it was not entitled to the lower rate of tax. The High Court treated the issue as already settled by an earlier Division Bench ruling, which had been followed by another High Court decision, and no contrary authority was shown. On that basis, the court held that the proposed question of law was covered by existing precedent and declined to direct a reference under section 256(2) of the Income-tax Act, 1961.

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Issues: Whether a hotel-running company was an "industrial company" within the meaning of section 2(7)(c) of the Finance Act, 1979, so as to be entitled to the lower rate of tax, and whether a reference on that question of law should be directed under section 256(2) of the Income-tax Act, 1961.

Analysis: The issue was treated as concluded by the earlier Division Bench decision holding that a hotel is not an industrial company for the purpose of the Finance Act, 1979. That view had also been followed by another High Court decision, and no contrary authority was shown. On that basis, the Court found that the question raised was already covered and did not warrant a fresh reference.

Conclusion: The assessee-company was not entitled to be treated as an industrial company, and the request for a reference was declined.

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