KOSHYS PRIVATE LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a referred under s. 256(1) of the I.T. Act, 1961. The question referred by the Income-tax Appellate Tribunal, Bangalore Bench, for the opinion of this court, is as follows :

(2.) THE assessee is a private limited company. For the assessment year 1975-76, it had income from departmental stores, bakery, restaurant and bar. Its total income for the year was Rs. 3,88,333 out of which a sum of Rs. 1,69,428 was attributable to the bakery and an income of Rs. 72,807 was attributable to the restaurant. If the latter two sums are taken together, it would exceed more than 51 per cent. of the total income of the company. THE assessee made that claim so as to be considered as an industrial company for the purpose of getting the benefit of concessional rate of tax.

(3.) THERE is no dispute that the bakery is a manufacturing unit of the assessee. The assessee wants the restaurant section also to be treated as a manufacturing or processing unit. If this claim is allowed, then the assessee would be entitled to the benefit of s. 2(8)(c). The ITO, however, did not accept that claim. He held that the restaurant has not been licensed as a factory and the income therefrom cannot be taken for the purpose of considering the assessee as an "industrial company".