Industrial company status under tax law denied for ordinary construction activity under the governing statutory definition.

For purposes of section 2(7)(d) of the Finance Act, 1966, ordinary construction activity does not fall within the definition of an "industrial company" unless the statutory conditions are otherwise met. The Tribunal applied the governing Bombay High Court interpretation, which distinguished construction from manufacture or processing and treated construction, other than ship construction, as outside the definition. Authorities cited on different statutory wording were not treated as controlling. The assessee, a construction contractor, therefore did not qualify for the lower rate reserved for an industrial company, and the assessments were sustained on that basis.

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Issues: Whether the assessee, a construction contractor, was an "industrial company" within the meaning of section 2(7)(d) of the Finance Act, 1966.

Analysis: The definition of "industrial company" under section 2(7)(d) was applied to the assessee's construction business. The Tribunal noted that the Bombay High Court, in the decision directly governing that definition, had held that the statutory language distinguished construction from manufacture or processing, and that construction activity other than ship construction was not brought within the definition. The contrary authorities relied upon by the assessee were treated as arising in different statutory contexts and not overriding the direct ruling on the relevant provision.

Conclusion: The assessee was not an industrial company under section 2(7)(d) of the Finance Act, 1966.

Final Conclusion: The tax treatment claimed by the assessee failed, and the assessments were sustained on the footing that the assessee did not qualify for the lower rate applicable to an industrial company.

Ratio Decidendi: For the purposes of section 2(7)(d) of the Finance Act, 1966, ordinary construction activity does not amount to an industrial company unless the statutory definition is otherwise satisfied by the nature of the activity carried on.

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