Industrial company status requires direct manufacturing activity; mere shareholding in a manufacturing concern does not qualify for concessional tax.

An assessee qualifies as an industrial company only if it is itself engaged in the manufacturing activity required by the statutory definition; mere investment in, or holding of shares in, a manufacturing concern is insufficient. On that test, an assessee that did not carry on the specified manufacturing activity was not entitled to the concessional tax rate available to industrial companies, and the reference was answered against the assessee and in favour of the Revenue.

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Issues: Whether the assessee could be treated as an industrial company and charged to tax at the concessional rate applicable to such a company.

Analysis: The question turned on the statutory definition of an industrial company. The decisive requirement was that the assessee itself must be engaged in manufacturing activity of the nature specified in the definition. Mere investment in, or holding of shares in, a manufacturing concern did not satisfy that requirement. As the assessee was not itself carrying on the specified manufacturing activity, its claim to the concessional rate could not be accepted.

Conclusion: The assessee was not entitled to be treated as an industrial company for the purpose of claiming the lower rate of tax. The answer to the reference was against the assessee and in favour of the Revenue.

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