TMI Blog1994 (9) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case, the Tribunal was right in law in holding that the assessee-company was engaged in manufacturing and processing activities and, therefore, should be charged to tax at the rate of 55 per cent. ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in setting aside the order of the Commissioner of Income-tax passed under section 263 of the Act ?" It appears that the assessee claimed that it was a company engaged in manufacturing and that it should be charged to income-tax at the rate of 55 per cent. The Income-tax Officer allowed the claim of the assessee to be taxed at the rate of 55 per cent. under section 104(4) of the Income tax Act, 1961 (hereinafter referred to as "t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so referred to the decisions in the cases of : CWT v. Mubarakali Khan [1980] 123 ITR 101 (All) CIT v. Hindusthan Metal Refining Works (P.) Ltd. [1981] 128 ITR 472 (Cal) ; CIT v. Lakhtar Cotton Press Co. (Pvt.) Ltd. [1983] 142 ITR 503 (Guj) ; CIT v. Buhari Sons Pvt. Ltd. [1983] 144 ITR 12 (Mad) ; CIT v. R. Narayanaswami Naicker and Sons [1984] 149 ITR 283 (Mad) ;.Ujagar Prints v. Union of India [1989] 179 ITR 317 (SC) ; CIT v. Technico Enterprise Pvt. Ltd. [1994] 206 ITR 36 (Cal). Mr. Shelat has taken much pains to take this court through all the aforesaid decisions for a proper appreciation of the facts of the present case and to answer the questions referred to this court. Mr. J. P. Shah, learned counsel for the assessee, has also re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted supari and gutka had to be taxed at the rate of ten per cent. under the residuary entry. This case was cited and relied upon by Mr. Shelat in support of his contention. In the aforesaid case, it was observed that in order to decide the question, it is necessary to ascertain the meaning of the word "processed". A reference was made to the decision of the Supreme Court in the case of Chowgule and Co. Pvt. Ltd. v. Union of India [1981] 47 STC 124, wherein the Supreme Court, while interpreting the word "processing" which was not defined, adopted its plain natural meaning as given in Webster's Dictionary, which gives the following meaning of the word "process" : " to subject to some special process or treatment, to subject (especially raw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of some result but it is not one of the requisites that the activity should involve some operation on some material in order to its conversion into some other stuff. Therefore, what is necessary in order to characterise an operation as processing is that the commodity must, as a result of the operation, experience some change. In the aforesaid decision, the assessee-company received cotton in bulk having lighter density which was sprinkled with water and through a mechanical device pressed into small units of convenient sizes and then packed into bales, because cotton packed in bales was commercially acceptable as merchants found it convenient to store cotton in that form because unpressed cotton would require considerable storing space ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference was also made to the judgment of the Kerala High Court in CIT v. Casino (Pvt.) Ltd. [1973] 91 ITR 289, wherein the Division Bench, while dealing with the word "processing" appearing in section 2(6)(d) of the Finance Act, 1968, observed that it was evident from the context in which that word was used that it was complementary to the term "manufacture" and, therefore, would not cover manufacture also. In other words, activities of a nature in regard to goods which may not amount to manufacture but which would result in the doing of something to the goods to change or alter their form may be taken in by the term "processing". Processing, in that context, would, therefore, mean something less than complete loss of identity of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les, fruits and several other articles which require preservation by refrigeration are stored. While, as a result of long storage, scientific examination might indicate loss of moisture content, that is not sufficient for holding that the stored articles have undergone a "process" within the meaning of section 2(7)(c) of the Finance Act, 1973. With great anxiety we have gone through the facts of the said case and the principle of law as discussed therein. We, however, do not appreciate that the preservation of fruits in a cold storage has got any relevance to the problem as raised in the present case or helps in answering the questions referred to above. We have, in the absence of any statutory definition of "process", adopted the plain d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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