TMI Blog1983 (4) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... en allowed to be corrected). The assessee-company is engaged in the running of a hotel known as Pritam. The assessee claimed the benefit of the lower rate of tax applicable to an 'industrial company' under the relevant Finance Acts. It is common case that so far as it is relevant for the present purpose, to be treated as an 'industrial company', the company should be engaged 'in the manufacture or processing of goods'. The order of the ITO did not contain a specific reference to the claim of the assessee but the benefit of lower rate of tax was not allowed to the assessee. The Commissioner (Appeals) observed that it is not clear whether the assessee made a specific claim before the ITO that it is a trading company. However, he considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rage. It was held by the Calcutta High Court that the activity of manufacture of goods is different from the activity of processing goods and that the act of cold storage was an act whereby foods or products stored in the cold storage were prevented from natural decay and that this would amount to processing the goods. It is clear that these rulings will be of no help in deciding the present controversy. Similar is the position with regard to the ruling of the Delhi High Court in the case of Addl. CIT vs. Kalsi Tyre Pvt. Ltd. (1981) 131 ITR 636 (Del) wherein it was held that the activity of retreading tyres will amount to processing of goods. The ld. representative for the assessee also referred to a ruling of the Bombay 'E' Bench of the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inition of the term 'industrial company' in the Finance Act are manufacturing concerns as distinct from trading concerns and that a hotel is mainly a trading concern. It was observed that the activity carried on in preparing articles of food from raw materials in a hotel would not constitute manufacturing or processing of goods and that a company which carries on such activity will not fall within the definition of an 'industrial company'. The ld. representative for the assessee did not seriously dispute that this ruling is prima facie against the claim of the assessee. But it was contended by the ld. representative that it has been held by the Calcutta High Court in the case of G.A. Randerian Ltd. vs. CIT (1983) 32 CTR (Cal) 318, that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal, in the case before the Calcutta High Court, had rested its decision, namely, that the Kerala High Court had held that what was done manually and without application of mechanical forces could not be considered to come within the expression 'processing'. It was held by the Calcutta High Court that this argument accepted by the Kerala High Court has been expressly negatived by the Supreme Court in the case of Chowgule Co. Ltd. It is clear from what is stated above that there is no merit in the contention that the entire ruling in the case of Casino Pvt. Ltd. has ceased to be good law. What can be claimed at the most is that it is no more good law for the proposition that there can be no 'processing' if the operation is done manuall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the car consequent on the decision covered by the grounds referred to in the preceding paragraph. As the disallowance of expenditure is being deleted, the disallowance of depreciation has also to be deleted. The ground is decided in favour of the assessee. Ground No. 4 for asst. yr. 1977-78 and ground No. 5 for asst. yr. 1978-79 5. This relates to the disallowance of 20% of the expenditure on telephone No. 445834. The disallowance is on account of personal use. The disallowance was based on the practice followed in the earlier assessment years. No new materials have been placed before us so as to justify our interference with the order of the Commissioner (Appeals). This ground is decided against the assessee. Ground No. 2 f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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