TMI Blog1982 (4) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... tate " in Bombay. On or about 29th May, 1943, the State of Bombay granted lease in respect of an open plot of land, on which Khetan Estate stands now, in favour of Kanji Property Ltd. for the construction of a building. Kanji Property Ltd. assigned this lease in favour of one Khetan on 6th November, 1950. Khetan in turn formed a company called " Khetan Estate Ltd. " The said company completed construction of the building on the said plot of land by 19th September, 1952. The assessee-company is one of the shareholders of Khetan Estate Ltd., and a flat in the said building has been allotted to the assessee as such shareholder. The shareholders are required to pay a monthly rent to the company for the flat allotted to them. They also pay munic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee " (3) Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that the assessee was not wholly or mainly engaged in the manufacture or processing of goods ? " Mr. Joshi, learned counsel for the Commissioner, has very fairly stated that questions Nos. 1 and 2, which have been raised at the instance of the Commissioner, are covered by a decision of this court in the case of CIT v. Mahendra J. Shah [1979] 118 ITR 902. In view of this decision, both these questions will have to be decided in favour of the assessee and against the Commissioner. In view of this submission of Mr. Joshi, we need not examine questions Nos. 1 and 2 any further. The third question that requires consideration is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of CIT v. Pressure Piling Co. (India) P. Ltd. [1980] 126 ITR 333. In that case the court was required to consider whether piles which were manufactured by the assessee-company by special process and which were used in the foundation work of buildings could be considered as articles manufactured by the assessee-company. The court held that it was not necessary that articles which were manufactured should necessarily have the quality or the possibility of being sold and purchased across the counter nor was it necessary that they should be transportable to another site. A manufacturer specialising in the production of a particular product may produce and supply the article at the Site itself. It held that the piles which were manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity other than construction of ships could not be said to be a company engaged in the manufacture or processing of goods. This decision also turns upon the language of the definition of an industrial company. This language is different from the language used in cl. (iii)(A) of Para. D of Pi. II of the First Schedule to the Finance Act, 1964, where there is no reference to construction of ships or any other construction activity. Mr. Joshi strongly relied upon this decision and submitted that the construction activity was held as not an activity of manufacture or processing of goods. Since, however, the finding to this effect given in the decision turns upon the special language of the definition of an industrial company, it is not pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision in this case also turns upon the language of the definition of " industrial undertaking " under s. 45(d) of the W.T. Act, 1957, and the facts as found by the Tribunal there, In the present case, in order that the company may qualify for rebate, it is necessary that the company should be wholly or mainly engaged in the manufacture or processing of goods. In this connection, in the present case, the finding given by the AAC is to the effect that the appellant-company's main business is to construct dams, bridges, buildings and other constructions. It is an engineering company and the work is being done with the extensive aid of machinery. The Tribunal has also held that the assessee is engaged in the work of constructing buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity is a very complex activity involving application of technical know-how, material and skill of trained personnel for the purpose of construction of dams, bridges and so on. The company which engages in such engineering activity cannot be said to be a company which is either wholly or mainly engaged in the manufacture or processing of goods. Thus, there is no merit in Mr. Trivedi's contention that manufacture and processing of goods is the main activity of the assessee. There is no material to show the extent of the manufacturing or processing of goods which is required for such construction activity. Hence, Mr. Trivedi's contention that manufacture and processing of goods forms a substantial part of the assessee's activities is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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