1982 (9) TMI 38

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....was an industrial company in which the public are not substantially interested and it was liable to be taxed at fifty-five per cent. instead of sixty-five per cent. The AAC granted certain reliefs to the assessee in the appeals preferred by it. The ITO, while revising his assessment orders pursuant to the order of the AAC, calculated tax at the rate of 55 per cent. Subsequently, he issued a show-cause notice under s. 154 for rectification of the mistake on the ground that the tax should have been charged at sixty-five per cent. The ITO on March 3, 1970, passed two separate orders-one on the application of the assessee under s. 154 and the other on the notice issued by him under the same provision he rejected the application of the ass....

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....on of this court : " Whether, on the facts and circumstances of the case, the assessments were liable to be rectified under section 154 of the Act. If the answer to the above question is in the affirmative, whether, on the facts and in the circumstances of the case, the assessee was an industrial Company entitled to be assessed to tax @ 55% instead of 65% assessed by the Income-tax Officer ?" There is no dispute that the assessee-company derives its income from the manufacture and processing of carpets. In its application under s. 154 the assessee claimed to be an industrial company with an income below rupees ten lakhs and prayed for rectification of the assessment order by taxing the income at the rate of 55% instead of 65%. In resp....

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....ess than fifty-one per cent. of its total income. There is no dispute that if the income relating to the sale of import licence is included and is taken into consideration, it exceeds 51% of the total income. The question is whether the income derived from the sale of import licences is attributable to the activity of manufacturing of carpets. In Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84, the Supreme Court had occasion to consider the expression occurring in s. 80E (as it stood prior to its amendment by the Finance (No. 2) Act, 1967). It was held that the Legislature had deliberately used the expression " attributable to ", having a wider import than the expression " derived from ", thereby intending to cover recei....